Tax teams sidelined in tech decisions, Vertex finds

Vertex has published research showing that tax teams are often excluded from technology decisions, even as e-invoicing and real-time compliance rules increase operational strain.

The survey of 1,050 senior IT, Finance and Tax leaders across the US, UK and Europe found that only 12% organisations have achieved full end-to-end tax technology integration. Tax teams are involved in tax technology decisions 37% of the time, compared with 52% for IT and 49% for Finance.

That gap matters as businesses increase spending on ER modernisation, automation, and artificial intelligence while regulators push companies towards faster, more continuous tax reporting. In the UK, mandatory e-invoicing is moving closer, adding pressure to ensure systems, data and internal controls work together.

The findings suggest that many organisations recognise the need for closer co-ordination between departments but have yet to put it into practice. While 94% of respondents expect stronger collaboration across IT, Tax and Finance, day-to-day operating models often remain fragmented.

Nearly a third of respondents linked poor collaboration to operational problems such as data issues, wasted investment and weak returns from tax technology projects. Across all markets surveyed, 29% cited fragmented systems as a core challenge, while 26% reported wasted spend or weak returns on investment from tax technology projects.

Confidence in the data was also limited. Only 37% of respondents reported high confidence in the quality of their master data, raising questions for businesses adopting AI tools in tax processes.

At the same time, 26% organisations said they are already using AI-assisted integration monitoring. The survey suggests some businesses are introducing these tools before putting governance structures in place, increasing the risk that poor data quality or unclear ownership will undermine the results.

UK findings

In the UK, 75% of businesses reported concerns about the effects of misalignment among IT, Tax, and Finance. The local findings showed that 26% had already seen wasted spend, while 29% identified fragmented systems as an operational issue.

Those figures reflect a broader shift in the role of tax within organisations. Rather than operating as a back-office reporting function, tax is becoming more embedded in transaction processing as governments adopt e-invoicing mandates and real-time reporting requirements.

That shift has implications for system design and ownership. If tax requirements are considered late in software or process decisions, businesses may face disruption after implementation, including blocked transactions or delays in recognising revenue.

Kevin Permenter, Research Director, Financial Applications and Agents at IDC, said the findings matched broader market trends. "These findings are consistent with what we are seeing across the market," he said. "Many organisations recognise the need for closer alignment between IT, Tax and Finance, but are still early in translating that into consistent operating models. As compliance requirements move closer to real time and organisations accelerate investment in automation and AI, gaps in governance, data quality and ownership are becoming more visible and more impactful on business outcomes."

Regional picture

The research pointed to regional differences, although concern levels were high across the sample. In the US, 77% organisations reported great concern, which respondents linked to rising transaction volumes, data complexity and the pace of digital transformation.

In the DACH region, the survey identified what Vertex described as the strongest structural challenge. It recorded a 35-point gap between IT and Tax involvement, with 38% of respondents citing wasted spend and the same proportion pointing to fragmented systems.

For software suppliers, advisory firms and corporate finance teams, the results add to evidence that tax technology projects are no longer narrow compliance exercises. They now sit closer to core finance systems, data governance and transaction flows, meaning missteps can affect costs, reporting timetables and customer activity.

Sal Visca, Chief Technology Officer at Vertex, said the effects were already visible in organisations where teams were not aligned early enough.

"When tax, IT, and finance teams aren't aligned from the start, businesses can end up with systems that look fine in concept but struggle in practice, leading to blocked transactions, delayed revenue, and higher risk," Visca said.

He said the regulatory trend was raising the stakes for companies making system changes. "As governments roll out e‐invoicing mandates and real‐time reporting rules, compliance is becoming a gatekeeper for transactions, not a box to tick after the fact," Visca said. "At the same time, organisations are accelerating ERP upgrades, automation, and AI to manage scale and complexity. If IT, Tax and Finance are not aligned on ownership and decision‐making, it will lead to magnified risk, allowing errors to move further and faster through the business."