Tax functions are hardly the only part of organizations grappling with growing complexity. A similar dynamic holds across a range of corporate functions, including procurement. Dealing with tax requirements after the fact can result in procurement either underpaying or overpaying taxes to vendors while escalating the company’s audit risk. Procurement functions are increasingly adopting SAP Ariba to accelerate their payables processes and apply strong business validations to transactional elements such as vendor data, product description, and financial invoice details.
SAP Ariba is a powerful platform that connects millions of suppliers and customers across direct and indirect expense categories. It offers an end-to-end automated system, removing complexity and allowing buyers and suppliers to manage everything from contracts to payments, all in one place. The solution also performs the important procurement control tasks of validating transactions, such as ensuring the invoice matches the purchase order and the materials or services received.
Reduce Risk with Tax Validation Functionality
In-house tax professionals will be keen to ensure that this improved cost control is matched by a parallel investment in appropriate tax risk controls. Vertex tax solutions harness SAP Ariba’s detailed transactional information to validate vendor tax treatments. It is important that the vendor’s tax treatment is checked and understood when the invoice is recorded by the purchasing business. In an optimized tax procurement process, tax errors are captured by validation before the invoice is cleared for payment.
Integrating Vertex tax validation functionality with SAP Ariba enables the purchasing business to ensure vendors have accurately calculated tax and correctly recorded the tax treatment in their invoice transmission. Inconsistent or inaccurate vendor tax treatments are escalated for review, and validated tax calculations are approved for payment. In addition to providing a real-time validation of vendor tax treatments, integrating a tax determination solution with SAP Ariba unlocks other process enhancements, including the assurance that reverse charges and restricted deductibility requirements are identified and recorded in a compliant manner.
Partnering to Reduce Complexity
A Vertex partnership with SAP should come as welcome news to procurement and tax leaders as they work together to reduce complexity. Built on Vertex expertise and content for sales and use tax and VAT determination, our solutions support the requisition and invoice reconciliation phases of the tax life cycle. Using Vertex solutions and SAP Ariba together helps to reduce the cost and time involved in performing tax calculations while reducing risks of underpayment, overpayment, and audits.
Click here to learn more about the SAP Ariba integration with Vertex or visit us on the SAP App Center.