Alignment of the ERP landscape brings an opportunity for the IT and tax departments to work together. This provides momentum for the tax department to optimize the company’s tax determination processes, while IT can accomplish standardization and eliminate numerous tax customizations across their ERP instances.
The challenge for the tax department is to convince the IT department that moving to a 3rd party tax engine instead of native ERP tax calculation is the best solution, both from a tax and an IT perspective. For IT, there is a desire for a smooth and risk-free process for ERP maintenance or upgrades. Adding a new 3rd party application may appear to add risk since the company has managed tax determination with native customizations for many years.
This is where the tax department needs to work with IT to create a joint business case for adding a tax engine. The tax team needs to showcase:
- The benefits of moving to a 3rd party application instead of native ERP tax calculation.
- How it can reduce some of the strain for both teams.
- How it positively impacts the wider business — most notably by reducing audit risk.
Timely communication between the teams is critical since adding a tax engine to an ERP implementation or upgrade project is much easier than adding such a solution outside those projects when budgets are already set in stone.
