Reasons to invest in automated IDT software
Corporate tax departments are increasingly recognizing the transformative effects of automated indirect tax (IDT) software on their operations. The adoption of such technology not only enhances invoice accuracy but also streamlines the tax department’s efficiency, ultimately bolstering the organization’s profitability.
The allure of automated IDT software lies in its capacity to save money by minimizing the risk of fines and penalties associated with non-compliance, reputational damage, and errors due to outdated tax rates and codes. This proactive approach to tax management safeguards organizations from unnecessary financial and reputational harm.
Beyond compliance, automated IDT software is a time-saver, freeing tax teams to engage in more strategic activities such as data analysis and contributing valuable business intelligence. It also ensures that reporting deadlines are consistently met without fail.
Competitiveness is further enhanced through smarter decision-making enabled by the software, which introduces workflow efficiencies and eases technology transitions during mergers and acquisitions. The strategic advantage gained through these efficiencies cannot be overstated.
How do you quantify the benefits of indirect tax technology?
Quantifying the benefits of indirect tax technology is crucial for decision-makers who need to understand the tangible returns on investment. Thomson Reuters commissioned Forrester Consulting to conduct an independent study on the financial impact of their ONESOURCE Indirect Tax solution. The study synthesized interviews with several multinational customers into a composite organization profile, which demonstrated a significant return on investment over three years.
Forrester data shows cost savings and ROI
1—Improved accuracy
Forrester’s research highlighted that tax automation through ONESOURCE Indirect Tax drastically reduces invoice error rates, translating into substantial savings over time. Continuous updates to tax rates ensure that accuracy is maintained without the need for manual intervention.
2—Improved efficiency
A centralized cloud-based solution streamlines tax management across departments, simplifying daily operations and reducing the time spent on compliance-related tasks. This efficiency allows teams to redirect their focus towards more value-adding activities.
3—Less maintenance and hassle
Automated updates to tax rates and codes relieve IT departments from the burden of manual updates, reducing the potential for human error and associated costs. The study estimated significant IT support cost savings for the composite organization.
In summary, the Forrester study painted a compelling picture of the cost savings and increased efficiency that an automated IDT solution like ONESOURCE Indirect Tax can provide, with a net present value of $2.1 million and an ROI of 120% over three years.
Additional business benefits from indirect tax software
Tax automation extends beyond quantifiable financial benefits. The reliability and accuracy of ONESOURCE Indirect Tax deliver intangible advantages such as reduced time-to-market for new products, improved system uptime, smoother M&A transitions, and peace of mind from accurate tax calculations.
To explore the full scope of benefits identified by Forrester Consulting’s research on ONESOURCE IDT’s tax automation platform, interested parties are encouraged to download the comprehensive study for a detailed analysis.
