While not a complete solution, ERP software can play a critical role in meeting indirect tax compliance. By melding ERP solutions with more focused indirect tax software, manufacturers and other enterprises can achieve full compliance and reduce unnecessary spending in a number of areas.

According to Economia, the reason that manufacturing ERP software alone cannot be used for full independent tax compliance is that both environments are undergoing major evolutions. ERP software is improving as the regulations regarding the expansive indirect tax market landscape are changing as well. This presents new complications and challenges as companies move forward, even though ERP solutions offer critical improvements in a broad variety of processes.

This has led many firms to embrace a hybrid approach, integrating focused indirect tax compliance solutions with business accounting systems to minimize the risks of manual errors or out-of-date tax codes, the news source reported.

What ERP software does provide in the equation is linking processes together more effectively to improve efficiency and productivity in accounting, inventory control and other areas of operation that can affect indirect tax compliance. In fact, embracing a hybrid solution has helped companies reduce their unnecessary spending on IT by upwards of 3 percent, reduce poor cash management by 10 percent and even save 13 percent on manual processes and tax errors, the report noted.

To see these improvements and properly leverage ERP solutions for tax compliance, manufacturers have to invest in the right business management software in the first place. By deploying systems that integrate with unique operational needs, firms can streamline the benefits and better leverage these technologies for growth and savings even as the related processes evolve and change.