From Watch to Know in 2019: How Sovos Enhances Businesses’ Global Tax Compliance Efforts

Each year, some companies on the Spend Matters 50 Providers to Know and 50 Providers to Watch lists push themselves beyond simply a standout performance. They earn the recognition that they are not only bringing innovation into procurement organizations but also leading the charge to change the way we do business for the better. These are the providers who shifted from Watch to Know in 2019.

To learn more about these providers, we reached out to a few such cases in our 2019 50/50 lists, asking how they’ve changed over the years and what differentiates them from the competition. Today’s Q&A features Christiaan Van Der Valk, VP Strategy at Sovos, a global tax compliance provider.

In case our readers aren’t fully familiar, can you give us a one-sentence summary of what your company does?

Sovos is the first complete solution for global tax compliance, including tax determination, e-invoicing compliance and tax reporting — empowering businesses to work with their preferred software vendors for procurement and spend management, without having to worry about the ever-changing global tax digitization requirements that apply to business processes.

How has your company changed since it was first named a Provider to Watch?

With the acquisition of TrustWeaver shortly after the 50 to Watch listing, Sovos is doing three big things:

1. Creating the first complete solution for global e-invoicing compliance, handling both post-audit and clearance models in 60 countries.
2. Shaping the future of digital tax compliance worldwide, by combining the talented teams that pioneered e-invoicing compliance software.
3. Delivering a complete tax solution, including tax determination and VAT-compliant reporting, in the platforms of your choice, including SAP Ariba, IBM and Coupa.

Sovos was also recently named a 2019 IDC MarketScape Leader for sales tax and VAT automation applications and lauded for its partner ecosystem, which includes more than 70 technology partners.

Sovos adds simplicity to the growing global challenges of indirect tax compliance in accounts payable processes. In Italy, for example, SAP Ariba extends clearance capabilities to registered and non-registered suppliers, ensuring compliance for supplier invoices from inside and outside the network. Companies have the ability to bring all those invoices together in the compliant Sovos eArchive, safeguarding businesses with modern tax evidence in compliance with local e-archiving legislation.

What is the biggest lesson you have learned since first being named a Provider to Watch?

We’ve reached a tipping point in modern taxation. Governments around the world are embarking on their own form of digital transformation, seeking to capture hundreds of billions in lost revenue by mandating real-time tax enforcement. Now that the technology exists to enforce continuous compliance, more governments are inserting themselves into every transaction a business makes. This “other” digital transformation is having a significant impact on businesses’ plans for ERP and B2B procurement application consolidation and transformation.

For customers to thrive, tax compliance must be embedded into the digital financial core to protect them from this rapid expansion of real-time, transaction-level reporting and solve tax for good.

What do you consider your two or three best features or services that make you a Provider to Know?

Here’s what makes us stand out:

• The only complete indirect tax compliance suites for AR & AP automation allow users to manage global post audit and clearance mandates as well as complex archiving and digital reporting requirements via our unique S1 platform, ultimately helping businesses stay compliant when transacting with clients and suppliers. To ensure the uninterrupted flow of global supply chains, our tax determination capabilities will also make sure that invoice data is continuously approved by real-time tax platforms.
• Flexible integration options through a unique API and SaaS approach, a rich SAP framework and more than 60 leading business-to-business transaction automation vendors such as SAP Ariba, Coupa and OpenText that have already embedded Sovos for global e-invoicing and other indirect tax compliance.

How are you thinking about your competitive landscape?

To thrive in the new world of digital tax, implementing local vendor point solutions in multiple locations every time there is a new country mandate will ultimately backfire. You need a solution that is:

• Complete – Sovos S1 supports every type of e-invoicing legislation in every transactional system. It also integrates real-time tax determination and fully automates preparation, filing and remittance for traditional and digital tax reporting of sales and use tax, VAT and GST.
• Continuous – Compliance requirements are monitored, interpreted and delivered through the Sovos S1 for thousands of taxing jurisdictions to keep your financial systems compliant in real time. Whether integrated with or embedded in your enterprise software, tax compliance fits naturally into every workflow to help you stay ahead of indirect tax changes around the world.
• Connected – As a single platform, Sovos S1 enables you to connect all your tax applications and business systems for coverage across your processes and systems. Sovos S1 connects you to thousands of tax administration platforms around the world to transmit data, monitor responses and mitigate problems in real time. And a modern user experience connects your team with standard workflows and a user-centric design that complements your ERP and B2B transaction applications.

How are you differentiating yourself from other Providers to Know in the industry and upstarts on the Watch List?

We believe there is no other company in the world that offers global tax determination and reporting services as well as e-invoicing compliance solutions in 60+ countries.

“Many multinational companies are struggling with the shifting tax regulatory landscape,” said Kevin Permenter, Research Manager at IDC. “Sovos continues to innovate around cloud-based procurement platforms, offering these organizations tremendous value by providing coverage for every major form of transaction-level tax compliance in one solution.”

Sovos continuously innovates and acquires technologies that support our mission to “Solve Tax for Good” — reducing the friction between businesses and governments so commerce can grow faster and communities can thrive by simply collecting the tax they’re already owed.

Where do you see the procurement sector going in the next several years?

We see a huge uptake of procurement software, particularly in the cloud. Experimentation with AI and blockchain will further accelerate the growth of procurement-focused business networks.

Sovos predicts that by 2025, companies in industrialized and emerging economies will exchange more than 75 percent of all invoices electronically with tax administrations in real time or very shortly after the invoice-exchange process. It has become mission-critical for companies to prioritize tax compliance in their cloud procurement strategies.

And how is your company helping organizations through that prioritization?

Our task is to make sure that these dynamic and rapidly evolving business environments can at the same time ensure compliance with the plethora of e-invoicing and digital reporting mandates that keep appearing around the world.

To fully ensure VAT compliance, AP solutions must go beyond basic process improvement to include tax-rate determination, invoice clearance with tax administration platforms, archiving and the ability to link to related reports. Fortunately, the cloud makes it easier to audit-proof AP platforms. Cloud-native purchasing systems can access a multitude of APIs to facilitate invoice clearance, perform tax checks, and adapt to constantly changing, country-specific rules, all while ensuring that daily operations are not disrupted.

But many companies may be going about it the wrong way. They sacrifice their plans to expand modern procurement solutions to their extended enterprise process perimeter globally by tactically adopting point solutions that focus primarily on local compliance and have little to offer in the way of business-to-business transaction automation.

We view ourselves as uniquely positioned to allow companies to get the best of both worlds: cutting-edge procurement technology coupled with a single tax automation platform that transparently ensures indirect tax compliance across all markets.