By Sal Visca
Tax compliance has evolved from a periodic reporting function into a living process.
Rising transaction volumes, digital commerce growth, e-invoicing mandates and AI-driven business models are increasing the risk of revenue disruption by exposing weaknesses in enterprise architectures that need to be adapted and possibly redesigned to meet today’s compliance environment.
Transactions can now be barred in real time if certain requirements aren’t met, making operational alignment across tax and IT around shared data, governance and infrastructure an important factor in revenue management.
Tax is often approached as a downstream, after-the-fact process, but it should be embedded in every transaction, system and customer interaction. Historically, tax operated on delayed, periodic reporting cycles. Organizations had time to identify errors, reconcile data and make corrections before filings occurred. That time buffer is disappearing as compliance requirements become immediate.
As a result, tax is becoming a technology and data challenge.
According to research from Vertex Inc., 82% of U.S. business leaders are concerned about rising transaction volumes, and another 74% are concerned about managing transaction spikes during peak shopping events such as Black Friday. The challenge is that higher transaction volumes expose structural weaknesses many organizations didn’t know they had.
The Confidence Gap: Why Organizations Think They’re Aligned When They Really Aren’t
Many companies believe tax, finance and IT work well together, yet operational data suggests otherwise. According to the same Vertex report, 90% of leaders say collaboration between tax, finance and IT is strong. However, just over a third report wasted resources or poor returns on tax technology investments. Another 30% cite fragmented systems and inconsistent data flows as major barriers.
In some cases, cultural alignment and general acceptance of tools do not necessarily equal true operational alignment. Teams may communicate frequently while still relying on disconnected systems. Manual workarounds often mask underlying infrastructure issues, and the problems only become visible when systems are placed under pressure.
For example, retailers entering peak shopping periods — such as holiday seasons or Amazon Prime Day — often discover data synchronization issues, unexpected system bottlenecks or integration gaps that remained hidden during normal transaction volumes.
Ironically, introducing AI into the process can cause a productivity trap. While some AI tools excel at expediting communication between teams, research and repetitive tasks, they can stumble on complex workflows that require deep institutional context or high-stakes approvals. Forcing unproven AI tools to scale under the pressure of peak transaction seasons can widen the confidence gap rather than close it, leaving organizations struggling to move with the speed the market demands.
Transaction Growth Has Become an Enterprise Architecture Challenge
Most organizations view transaction growth as a business success metric. Few recognize it as a compliance scalability challenge. But every transaction creates tax obligations.
Every new sales channel introduces new compliance complexities, and each new jurisdiction introduces unique reporting requirements. As a result, modern organizations process more tax-sensitive transactions than they did five years ago, driven by the growth of taxes on digital products and services, global expansion into new markets and the rise of AI-enabled purchasing.
Many enterprise systems were designed for periodic reporting environments rather than continuous transaction processing. As transaction volumes rise, organizations are discovering that their infrastructure was never designed for today’s compliance demands.
E-Invoicing and Real-Time Reporting Are Eliminating the Compliance Safety Net
The challenge becomes even more urgent as governments move compliance closer to the transaction itself. Regulatory bodies around the world are aggressively implementing mandates for real-time compliance and reporting.
In the traditional model, the transaction occurs, data is reviewed, reports are prepped and filings occur weeks or months later. But in the emerging dynamic, governments gain visibility much earlier because information is transmitted in near-real time as part of the transaction.
With e-invoicing adoption expanding globally, Continuous Transaction Controls (CTCs) are becoming more common. As a result, compliance is shifting from periodic to continuous, which means data quality becomes a prerequisite.
Why Tax Needs a Seat at IT’s Table
Tax technology decisions are increasingly impacting core enterprise architecture. Tax technology now touches everything from ERP systems to e-commerce platforms, data warehouses and reporting infrastructure.
If IT teams are brought in too late, organizations face costly retrofits, including duplicative integrations, governance issues and delayed projects. In many cases, IT often inherits the burden of fixing these problems downstream later.
At the center of nearly every compliance challenge is a common issue: data.
This becomes even more important as organizations accelerate AI adoption. AI has enormous potential, but it depends on strong data foundations. Organizations with clean, connected data gain greater value, while fragmented environments simply scale existing problems faster. AI can identify compliance anomalies instantly, but disconnected systems still prevent organizations from resolving the underlying issue. AI should be viewed as an intelligence layer built on trusted infrastructure, not a substitute for it.
Moving Toward Modern Tax-IT Alignment
Future-ready organizations are treating tax, IT and finance as shared stakeholders in compliance. Bringing IT into the fold helps organizations establish a shared governance model where decisions are made across functions.
Reducing reliance on manual processes is equally important amid global digital transformation efforts. Automation creates a scalable architecture designed to absorb regulatory changes and smoothly adapt to new technology. When IT and tax share data ownership from the start, compliance becomes a byproduct of good enterprise design rather than a constant firefighting exercise.
The pace of business today is exposing weaknesse s in systems, data and governance structures. The organizations that thrive won’t necessarily have the largest tax departments or the newest technology. They’ll be the ones that successfully bridge the divide between tax, finance and IT.
About the Author
Sal Visca is chief technology officer at Vertex where he oversees software engineering, product management, AI and technology strategy, architecture, innovation, security and product support. He joined Vertex in 2021 after more than 30 years of technology leadership, including CTO roles at Elastic Path Software, Business Objects and SAP, as well as software development leadership positions at IBM.
