6 strategic steps to increase technology agility in indirect tax

Indirect tax is one of the largest, least visible cash flows in a global enterprise. Cashflow often represents 10% or more of total revenue. For a $1 billion company, that’s roughly $100 million coursing through systems that must be right the first time, every time.

When those flows rely on manual workarounds or brittle integrations, the financial risk multiplies audits, penalties, rework, and avoidable leakage. In a world of real-time digital reporting and e-invoicing, technology agility isn’t a luxury; it’s a financial necessity.

Jump to ↓

The current state of tax technology suggests uneven progress

Follow the money: Who controls tech spend

Why investment foresight and ROI matter

The business case writes itself

Why agility matters now

Six strategic steps to increase technology agility

A hopeful path forward

The current state of tax technology suggests uneven progress

There’s good news according to the Thomson Reuters 2025 State of Corporate Tax Department report, 94% of corporate tax professionals feel hopeful or excited about the future of tax technology, and 74% expect their tech budgets to increase over the next three to five years.

Yet more than half still describe their department’s posture as chaotic or reactive, with only 6% saying it is optimized or predictive. Larger companies report more progress with as much as 46% calling their posture proactive. For smaller peer companies, a widening maturity gap appears prevalent, as only 22% report progress.

Follow the money: Who controls tech spend

The 2025 State of Corporate Tax Department report also states that; autonomy and budget ownership are decisive for speed. With 70% of tax departments saying they can make independent technology purchases, it is a strong signal that tax can and should lean on solutions that reduce risk and improve ROI.

Still, funding models vary: 46% report the tech budget is owned entirely by tax, 29% share with finance, and 13% share with IT. Regardless of model, momentum is building.

Why investment foresight and ROI matter

Cloud-based indirect tax platforms that integrate with ERP systems eliminate up to 95% of manual IDT processes, custom coding, and workarounds; freeing scarce IT capacity and reducing compliance friction.

The business case writes itself

As discovered in Forrester’s The Total Economic Impact of Thomas Reuters ONESOURCE Indirect Tax, organizations implementing ONESOURCE Indirect Tax achieved a 120% three-year ROI with a 15-month payback; reduced invoice error rates from 3% to below 1%; reallocated up to 50% of compliance team effort to higher value work; and lowered IT maintenance effort through automated content updates.

These aren’t theoretical projections. They’re measured outcomes from companies that chose to follow the money and invest in platforms purpose-built for indirect tax complexity.

Why agility matters now

Regulators are shifting toward always-on digital reporting, increasing scrutiny and accelerating change cycles that legacy and spreadsheet-heavy processes can’t match. Every month of delay extends audit exposure and constrains growth into new products or markets.

Notably, 74% of tax leaders say automating repeatable processes is a medium or high priority, and 88% believe AI will become central to workflows within five years. This signals that the function is ready to move from exploration to execution.

Six strategic steps to increase technology agility

Map the value at stake. Quantify indirect tax cash flows across entities and channels and tie automation to risk reduction and working capital benefits. Use TEI-style assumptions to frame ROI, payback, and error rate reduction.
Secure ownership and align funding. If your department can purchase independently (70% can), lead the business case. Where budgets are shared, formalize co-sponsorship with Finance/IT and articulate cross functional benefits (reduced IT maintenance, cleaner data, audit readiness).
Choose an end-to-end platform that scales. Favor cloud engines with automated content updates across jurisdictions and seamless ERP connectors to minimize custom code and downtime. Appoint a Taxologist and build skills. Blending tax, process, and technology expertise accelerates adoption and reduces dependence on ad hoc IT work. Provide ongoing training so teams translate technology into compliant, efficient workflows.
Normalize change with governance and metrics. Today, only about one quarter of departments track tech success metrics. You need to close that gap.
Establish ownership for tax tech strategy, define KPIs (invoice error rates, filing cycle times, IT maintenance hours saved), and review them quarterly with Finance and IT leadership.
Prioritize quick wins that fund the journey. Start with high volume, rule intense processes (e.g., determination, exemption management, filings) to capture early savings and reinvest. Many organizations realize sub-18-month payback when they target these areas first.

A hopeful path forward

Indirect tax will only grow more digital and more consequential to enterprise performance. The encouraging reality is that tax leaders already have the mandate, growing budgets, and proven ROI cases to act. By following the money, owning the business case, and scaling modern, cloud first platforms, indirect tax professionals can turn compliance into a strategic, tech agile capability that protects cash flow, accelerates growth, and uplifts the entire finance stack.

The path from reactive to proactive isn’t instantaneous, but it is achievable. And the financial case has never been stronger. Read Thomson Reuters 2025 State of Corporate Tax Department report for a comprehensive look at the data.