Vertex Research Finds UKI e-Commerce Businesses are Falling Behind EU and US Counterparts in the Digital Transformation Race

Rhea-AI Summary

Vertex, Inc. (NASDAQ:VERX) released a research report highlighting that many UK and Ireland e-commerce businesses are lagging in optimizing their finance and VAT management processes, with 75% not nearing completion of their digital transformation. This delay poses significant barriers to growth and expansion into new markets. The study surveyed 730 financial decision-makers and found that nearly half of UKI respondents need to minimize VAT burdens on transactions. Furthermore, 44% are concerned about potential indirect tax increases from Covid-19, reflecting broader challenges in the evolving tax landscape.

Positive

• Research indicates a clear opportunity for growth as UKI businesses recognize the need to optimize VAT processes.
• Awareness of the need for transformation in indirect tax management can drive future investments in Vertex's solutions.

Negative

• 75% of UKI e-commerce businesses admit they are far from completing their finance optimization, signaling a market lag.
• Failure to transform indirect tax processes could deter expansion into new territories, impacting overall market growth.

Research shows that delays in optimising inefficient finance and VAT management processes are stifling ambitious growth plans

LONDON, Aug. 17, 2022 (GLOBE NEWSWIRE) -- Vertex, Inc. (NASDAQ:VERX) (“Vertex” or the “Company”), a global provider of tax technology solutions, today released a research report on how businesses selling online can change indirect tax management from inhibitor to enabler. The study surveyed 730 financial decision makers working for companies transacting online on their plans for taking advantage of future growth opportunities as well as the challenges they will meet along the way.

This study found that UK & Ireland (UKI) businesses selling their products and services online are falling behind their European and US counterparts when it comes to digitally transforming their financial processes, including indirect tax management. In fact, 75% of UKI e-commerce businesses admit to being nowhere near completion of their plans to optimise their finance and VAT calculation processes. Similar businesses across the EU and the US are further on in their transformation journeys, with a third claiming to be midway through the process, and 37% are nearing completion.

Delays or failure to transform their indirect tax management processes are highlighted as a significant barrier to expanding their businesses into new territories.

Online businesses looking to sell into new markets must manage the VAT requirements of each new country they enter. However, registering with local tax authorities and ensuring the rules and regulations of the local indirect tax jurisdictions are complied with is a time-consuming, complex task. With many survey respondents still using the basic VAT automation functionality offered by their ERP or finance system or attempting to do it manually, ambitious e-commerce businesses will continue to face unnecessary growth inhibitors in an increasingly complex indirect tax landscape.

Almost half of our UKI-based survey respondents admit that they need to work on minimising the burden of VAT determination on every online transaction. They also recognise that improving inefficient indirect tax processes will help them digitise indirect tax as part of the customer buying journey and reduce their risk of receiving a fine for non-compliance for VAT.

Aside from their growth challenges, when asked about their other concerns over managing indirect tax, 44% of respondents cited possible indirect tax increases caused by Covid-19; for 43%, it’s dealing with the changing and complex US sales tax rules; 42% worry about handling the number of emerging destination-based tax rules globally; and for 37% it’s managing changes to EU VAT rules.

“The acceleration in adoption of digital technologies over the past two years has been phenomenal,” said Peter Boerhof, Vertex VAT director. “As we enter a new digital age, finance and tax teams must look to optimise their processes and keep up with their competitors.”

Embracing digitalisation comes with its challenges, and all too often, tax automation transformation is relegated to the bottom of the transformation ‘to do’ list as digitalisation of other core finance processes often takes priority.

Boerhoff continues, “UKI e-Commerce businesses looking to capitalise on the online sales boom need to be agile in their response to growth opportunities and move quickly into new target territories. Ramping up their efforts to transform their VAT processes by adopting a tax engine to automatically manage the entire VAT calculation and content process, will enable organisations to trade freely without the risk of non-compliance. It will also free up tax professionals to focus on helping their businesses plan their future growth plans effectively.”

Download the full research report here.

About Vertex

Vertex, Inc. is a leading global provider of indirect tax solutions. The Company’s mission is to deliver the most trusted tax technology enabling global businesses to transact, comply and growth with confidence. Vertex provides solutions that can be tailored to specific industries for major lines of indirect tax, including sales and consumer use, valued added and payroll. Headquartered in North America, and with offices in South America and Europe, Vertex employs over 1,300 professionals and serves companies across the globe.

For more information, visit www.vertexinc.com or follow on Twitter and LinkedIn.

About the research

The research was conducted by Sapio Research UK on behalf of Vertex. 730 financial decision-makers (c-level, directors, and managers) working in businesses selling cross-border products and services online were interviewed, across the EMEA (420), North America (250), and South America (60). Respondents were identified from a pool of B2B and B2C businesses reporting an annual turnover between $20m and $400m (or, £14m and £295m).

For more information, press only:

Company contact:
Marisa Norris
Vertex, Inc. 
mediainquiries@vertexinc.com
610.283.6284

Investor Relations contact:
Ankit Hira or Ed Yuen 
Solebury Trout for Vertex, Inc. 
ir@vertexinc.com
610.312.2890

FAQ

What does Vertex's recent research report reveal about UKI e-commerce businesses?

The report shows that 75% of UKI e-commerce businesses are not close to completing their finance and VAT optimization, potentially stifling growth.

How does the VAT management of UKI businesses compare to their US and EU counterparts?

UKI businesses are falling behind, with only a third of EU and US businesses reported to be midway through their finance transformation.

What are the main concerns of UKI businesses regarding indirect tax management?

44% are worried about potential indirect tax increases due to Covid-19, while others cite challenges with changing US sales tax rules.

How can e-commerce businesses benefit from optimizing their VAT processes?

Optimizing VAT management can help e-commerce businesses expand into new markets and reduce the risk of non-compliance penalties.

What is the significance of the survey conducted by Vertex?

The survey, involving 730 financial decision-makers, highlights the urgent need for digital transformation in tax management among UKI businesses.