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Indirect Tax ERP automation with Workday, Vertex, and KPMG

Automated indirect tax determination and reporting from inside the ERP

For companies that sell products and services across a wide geographic range, indirect taxes are a nightmare to manage manually. The laws in thousands of state and local jurisdictions are constantly changing, and they include a wide array of complex exemptions that require documentation to take advantage of. And while enterprise resource planning (ERP) is a vital, powerful financial platform, its tax capabilities are limited. To calculate indirect tax accurately and rapidly, the enterprise needs an automated tax engine that stays up to date with changes to tax laws everywhere they do business.

Learn from Vertex, KPMG, and Workday why the enterprise needs an automated tax engine to calculate indirect tax accurately and rapidly, to automate and simplify tax processes for both sales and purchasing, and to remove friction from both the sales and purchasing processes.

Vertex is a pioneer in tax automation, connecting great people and partners to deliver trusted tax solutions for more than 40 years. KPMG is committed to quality and service excellence in all that they do, bringing the best solutions to clients. And, Workday is a finance, HR, and planning system that evolves as business evolves. Together, these leading organizations and their expert teams provide solutions to the tax and reporting challenges businesses are facing.

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Automate Indirect Tax Determination and Reporting

Support Business Growth | Webcast with KPMG, Vertex and Workday


Sarah: Hi, welcome to our webcasts. Automate Indirect Tax Determination and Reporting to Support Business Growth. Considerations for Integrating Tax Technology with Workday Financial Management. I'm Sarah Kirk, content strategist for CIO Marketing Services. Thank you so much to our audience for being here with us today. And thank you, of course, to our sponsor Vertex for making today's webcast possible. For companies that sell products and services across a wide geographic range, indirect taxes are a challenge to manage manually, while the constantly changing laws and thousands of state and local jurisdictions include complex exemptions that require documentation to take advantage of them. A small tax error when scaled across hundreds or even thousands of transactions can wind up being extremely costly. While ERP is a powerful financial platform, tax capabilities are limited. With us today are speakers from Vertex, KPMG, and Workday to discuss why the enterprise needs an automated tax engine to calculate indirect tax accurately and rapidly, and to automate and simplify tax processes for both sales and purchases, and to remove friction from both the sales and purchasing processes. Vertex is a pioneer in tax automation, connecting great people and partners to deliver trusted tax solutions for more than 40 years. KPMG is committed to quality and service excellence in all that they do, bringing the best solutions to clients. And, Workday is a finance, HR, and planning system that evolves as business evolves. Together, these leading organizations and their expert teams provide solutions to the tax and reporting challenges businesses are facing. Let's go ahead and meet our speakers. First, we have Jason Warren, partner, solution engineer with Vertex. Jason, welcome. Can you please tell the audience a bit about your work with Vertex?

Jason: Absolutely. Thank you, Sarah. Hi, my name is Jason Warren, and my focus is the integration between Vertex and Workday. As a solution engineer, it's my job to work with our partner, Workday, our customers, and even prospects in working to ultimately meet the needs and fill any sort of potential gaps from a technology perspective.

Sarah: Great. Thank you, Jason. Next, we have Joni Johnson-Powe, CPA and partner at KPMG. Welcome, Joni. Tell us a bit about your responsibilities with KPMG.

Joni: Oh, thank you. Yes, I'm… my name is Joni Johnson-Powe. I'm a partner here at KPMG. I've been practicing in the area of tax for 20 plus years. And my role here at KPMG is really to help our clients identify indirect tax solutions for their indirect tax compliance and reporting responsibilities, both globally and domestically. We really help our clients identify those solutions that are best fit for their business and enterprise operations.

Sarah: Great. Thank you, Joni. Finally with us today, we have Ted Chamberlin, principal of product strategy for Workday. Welcome, Ted. What does your role with Workday look like?

Ted: Thanks, Sarah. Great to be here. I work in the industry strategy section of Workday and my role is to take a look at the top nine or ten industries we support at Workday and help drive solutions that contextualize our products for these industries and taxes quickly becoming a real core element of our product strategy here at Workday.

Sarah: Fantastic. Thank you each for being here today. With that, I'm going to hand things over to you, Jason, to kick off our discussion.

Jason: Sounds great. Thank you, Sarah. We have quite the agenda today for everyone, and I just want to cover that briefly so that we can get into the heart of today's presentation. We have just a great breadth of expertize across our… our presenters today. Now we're going to dive in and really touch on some key points around the challenges that companies, the businesses across various industries face when it comes to accurately calculating and reporting of their taxes. And we are also going to spend some time and really dive in to give you a good sense for the key role that a strong ERP solution like Workday can play within your organization when it comes to analytics and decision-making. And then we'll touch on really just what are the key benefits when it comes to automating tax to help you to scale and grow your business so that you can better support your customers throughout their lifecycle from prospect on through to customer care. And then ultimately, how does that partnership with between Workday and Vertex and ultimately a strong partner like KPMG really provide strength in the decision-making for your day-to-day business operations. Tax and Reporting Challenges. Ultimately, when it comes down to selling to your customers, be it products and services, we see a number of different challenges unique to industries, but also consistent across many different industries. And, ultimately, it comes down to accurately identifying those products and services that are being sold from a statutory regulation requirement. These challenges ultimately lead to businesses having to address these… these sorts of things in a manual sort of way. And when this happens, ultimately, you're faced with trying to figure out how to scale those efforts and and minimize, reduce how do you eliminate those errors and potential negative consequences from all of those manual efforts? We found that in the second half of 2022 alone, there was just a breadth of changes that occurred across various states when it comes to tax laws, and this is across various products and services. In addition to changes to existing tax law, new statutes, new laws were created and ultimately just creating really blindspots for business owners and executives and people on the front lines that are doing invoicing for their customers. In total, there were over 600 changes in in 2021 as well. And you can see that this ultimately can be something for businesses of all sizes that can really ultimately snowball and become hard to execute upon.

Ted: Great, when we take a look at the role of ERP in tax planning and the precious resource platforms are and have been for a very long time the foundation of financial and operational systems for most enterprises but their tax capabilities are limited. And the danger or the concern really is organizations that depend on the limited, indirect tax capabilities within ERP platforms that can really introduce significant tax risks into their operations. So how do you mitigate that risk? Right. Taxes to be part of the discussion upfront. So the systems involved in making those calculations are configured as accurately as possible, and that will minimize the risk and ultimately extend the value of platforms like Workday or for enterprises. We do have some capabilities of ERP in the tax engine that really focuses on five core areas. One is the details of local tax jurisdictions sometimes also that can you know, that can extend out to state, local, international automated updates for changing tax rules and regulations. As Jason just showed you, that tax rules regulations are definitely a disruptive, moving target. Automation of complex indirect tax calculations on all products and services. That's a big one. Exemption management and automated creation of tax returns and remission of sales tax and use tax collected. Very core areas here. For most organizations, these tax engines are not sufficient. Joni will now talk about the benefits of automation in tax.

Joni: Thanks, Ted. So I want to talk about the benefits of tax automation. An automated enterprise-wide approach has the dual benefit of avoiding human error, which causes calculations and reporting to be accurate, while also enabling in organizations to keep up with tax law changes in more than the 15,000 jurisdictions that we have here in the United States alone, a good example of the benefits of automation are exemptions. It can be difficult to know which documents to collect, and some states have different types of documents for different exemptions in different industries. Exemption documents have a life span, so sometimes it can be a requirement to renew that that exemption certificate that's in place and have a plan around that type of renewal. If it's not automated, you have to be an expert in the documentation to to collect how to collect it and how to maintain it going forward.

With that, I'm going to pass it back to Jason. He's going to talk a little bit about Workday and Vertex.

Jason: Thank you, Joni. Workday and Vertex have a longstanding partnership. And with that, we both have very strong reputations. From a business platform perspective, Workday is a powerful application not only in its capabilities with HR but also financial management. The partnership between Vertex and Workday dates back to 2018 and ultimately the capabilities of Vertex really play nicely with the work that Workday solution, the capabilities, the powerful reporting and all that you get with the Workday solution are enhanced when you leverage the capabilities of Vertex and indirect tax. Vertex provides you the capability to automate both your sales and your supplier side invoicing from an indirect tax compliance perspective. With Vertex, you ultimately get greater detail on local tax jurisdictions, automated updates, exemption management capability, and automated creation of tax returns and remission of sales and use tax collected. These capabilities allow you ultimately to scale your business, support your customers better, and ultimately protect your bottom line. Workday and Vertex work together using connector capabilities in what is called the vertex integration or tax connects, and it integrates seamlessly into estimates, invoicing, and other financial events. And what I mean by that is that ultimately the way that you are running your business, supporting your customers, and handling the invoicing capabilities Vertex provides you the flexibility and really ultimately the capabilities that you will need within your business. And it's all done through a studio-based integration. So that is a high level overview of how Workday and Vertex work hand-in-hand. And with that, what I'd like to do is go ahead and turn it back over to Sarah.

Sarah: Thanks, Jason. We have a few questions for our speakers now at this point. So first, when is the right time to consider an upgrade to existing tax technology and why bring tax into digital transformation efforts? Joni, would you like to kick that one off?

Joni: Sure. Of course. You know, any time that a company is looking to modify their ERP system or going through any type of enhancement or upgrade to that ERP system is a is an ideal time to consider upgrading your tax technology. If at the time, you know, you're using native functionality within the ERP, it's always a perfect time for you to consider and make a business case to upgrade your tax technology capabilities. And it's really important that tax is brought into those efforts in the very beginning. It's a very costly endeavor to look at incorporating a tax solution after an upgrade or a new ERP installation has happened. So really giving tax the opportunity to be at the table at the very beginning, define those requirements in tax requirements of what tax needs to accurately calculate and report taxes. It's just a very important part of an overall digital transformation for a company.

Sarah: Thanks, Joni. Jason, what are some tips for a smooth transition to an automated tax solution?

Jason: I think I'm going to echo a little bit of what Joni said, but ultimately it's about bringing the right resources to the table within the organization, and that's going to include the person or the people responsible for the tax compliance. And ideally, for a smooth transition, you will you will incorporate ultimately kind of the current state of the business as far as where we’re selling today, who are we selling to? And, ultimately, what are those, you know, what are those future looking plans to three, five years down the road in growth for the business? And so ideally for a smooth transition, you will communicate these sorts of things directly to your technology partner. In this case Workday, along with your consulting partner, and it might be KPMG and ultimately bring end those third-party perspectives because that will set you up for a smooth transition and really ideally give you the best opportunity for success.

Sarah: Thanks, Jason. Those are great tips. I'd like to invite each speaker to tell us a little bit about why is automation becoming more important for business? Ted, you want to start this off?

Ted: Sure. Sure. Thank you very much. So the office of the CFO is going through so much incredible change in what we see in the ERP world. You know, big, you know, big rocks to move in big sort of areas to jump into things like possibly ERP are a real core concern and when a lot of enterprises are trying to find ways to develop frameworks for seamless integration layer on AI and ML and just really become, you know, low code and extensible organizations that is like Joni said and Jason said that is the best time to build automated tax into that framework because sort of, you know, latching it on or just nailing it up to a system that's gone through some really big automation transformations, rarely works out well.

Joni: And I would agree with that. I'd also say that companies have a lot of pressure to be more efficient as well as be able to scale. And so the automation of the tax function is really part of this overall digital transformation for companies to be able to be ready for the next level of doing business from a global perspective and with a diverse group of of not only customers, but vendors as well.

Jason: And I would just say that, you know, Ted and Joni have covered this topic so well, but to build on that, I would say from an automation perspective, why automate there are so many areas within the business, it's important to automate. We're focused here on indirect tax. Indirect tax is one of those areas where you feel like you have to if you're going to try to approach it from a manual perspective, it's one of these things where as soon as you feel like you've nailed it, it's like a moving target. It's it's constantly changing and evolving. And when you look at it kind of big picture, you know, there's realization that this is a pass through and this is efforts that are being done on behalf of the states ultimately. Right. And so if you can automate this process, if you can plug in and take advantage of automation capabilities, you ultimately scale your efforts and you reduce really one of the goals being reducing your over your overall overhead in managing this process.

Sarah: Great, very well said. Could you each share some examples of tax challenges organizations face based on their industries or whether they're B2B or B2C? Jason, you want to take this one?

Jason: Absolutely. When you're when you're a business that sells to consumer or business that sells directly to other businesses, there's always indirect tax challenges and exposure that needs to be considered. Throughout the years, I've had countless conversations with with both types of businesses. And it's so important whether you're B2B or B2C or maybe hybrid, that you consider the fact that ultimately there is going to be some level of responsibility and potential exposure. So, always remember that there's going to be efforts around either document collection to prove that your customers are, in fact, exempt from paying sales tax. And on the flip side of that, there's going to be this challenge of can I get the tax right when I'm selling directly to consumer and make sure that what I'm collecting is the right amount.

I'm not under collecting. I'm not over collecting. I'm not creating downstream burden on my staff.

Sarah: Thanks, Jason. Joni, what are your thoughts on this?

Joni: From my perspective, I see that there are some particular industries that can benefit significantly from automation because of the complexities. Those industries include biotech, anything around medical, your medical or healthcare industries. Because the uniqueness on how states may may tax or may not tax. Also, I would say manufacturers, because of exemptions that may vary by state to state. And so having the ability to automate, utilizing the combination of your your Workday in your tax engine like Vertex allows you to address these very complex rules that change on a fairly frequent basis and vary by jurisdiction by jurisdiction. Thanks, Joni. Ted, anything to add.

Ted: Sure Sarah, thanks. Probably the one most interesting area we come in at Workday, especially in the communications media tech area, is media companies, whether it's streaming content creation, film, gaming, broadcasters in the news streaming environment, digital use, digital service taxes in emerging markets. Emerging areas are becoming an absolute nightmare for a media customer. So having a partner like Vertex to help understand the legislation where it's going and making sure that you're abiding by the law is absolutely critical going forward.

Sarah: Great. Thanks, Ted, and thank you each so much for taking the time to address all of these questions and for your great presentations. This does conclude our webcast today. Tax determination and reporting to support business growth considerations for integrating tax technology with Workday Financial Management as businesses pursue strategic initiatives and support growth, they don't want tax calculation errors to slow things down. By leveraging Vertex for Workday, users can reduce manual processes, stabilize process efficiency, improve audit performance, and reduce risk. Thank you once again to our sponsor Vertex and to each of our speakers. Jason Warren, Partner, Solution Engineer with Vertex, Joni Johnson-Powe, CPA and Partner at KPMG and Ted Chamberlin, Principal of Product Strategy for Workday. And of course, thank you to our audience for tuning in.

I'd like to direct your attention to the resources section of your console where you can find additional materials from Vertex on this topic. For Vertex and CIO, I'm Sarah Kirk. Thank you for joining us.

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Automated indirect tax determination and reporting from inside the ERP

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