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Total Economic Impact
Cost Savings And Business Benefits Enabled By Direct Tax
A Forrester Total Economic Impact™ Study Commissioned By Thomson Reuters, October 2025
Total Economic Impact
A Forrester Total Economic Impact™ Study Commissioned By Thomson Reuters, October 2025
In today’s dynamic regulatory environment, organizations face mounting pressure to maintain compliance across multiple jurisdictions while minimizing risk and operational inefficiencies. It is essential that companies reduce manual effort required to handle complex tax calculations and reporting processes to ensure accuracy and consistency. By streamlining tax operations and reducing reliance on manual processes, ONESOURCE Direct Tax can help tax teams operate more efficiently, avoid costly errors, and support strategic growth initiatives.
Direct Tax can help businesses make data-driven decisions, automate manual efforts, and monitor projects and due dates across their entire tax department. The suite of products in the Direct Tax solution includes Thomson Reuters Income Tax, Tax Provision, WorkFlow Manager, and DataFlow.
Thomson Reuters commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Direct Tax.1 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Direct Tax on their organizations.
To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed four decision-makers with experience using Direct Tax. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization, which is a multi-industry enterprise organization with revenue of $10 billion per year.
Interviewees stated that prior to using Direct Tax, their organizations lacked automation over the full tax lifecycle and faced inefficiencies, risks, and high costs from manual processes. However, prior attempts to resolve these issues yielded limited success, leaving them with compliance issues, risks, audit challenges, and penalties. These limitations led to high audit and tax preparation costs, business change and growth complexities, and resource constraints.
After the investment in Direct Tax, the interviewees transitioned to a structured, automated system with necessary enterprise resource planning (ERP) integrations. Key results from the investment include improved compliance with global tax structures and local tax laws, increased operational efficiencies, and enabled scalability for global operations and future acquisitions.
Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:
Avoided compliance costs year over year. The composite organization avoids $275,000 annually in late filing penalties, resubmission costs, error remediation, and consulting fees. Compliance cost savings and efficiency improvements continue annually, even as regulations evolve and the company expands. Over three years, the composite organization avoids paying more than $600,000.
Reduced tax preparation time by 50%. Direct Tax reduces tax preparation time for the composite organization by automating and streamlining the entire tax workflow. It accelerates routine tasks by decreasing manual data entry, which reduces errors and improves oversight. Tax professionals can then move from data entry and reconciliation to analytics, planning, and advisory tasks.
Avoided hiring two additional resources annually. The composite organization improves efficiencies within its global tax departments and reduces the need to expand headcount. Direct Tax enables centralized tax management for multinational operations, reducing the need for local tax teams in every country.
Unquantified benefits. Benefits that provide value for the composite organization but are not quantified for this study include:
Strategic tax planning and insights. The solution provides real-time analytics and industry benchmark reports, enabling faster, data-driven decisions on market entry and merger and acquisition activity.
Scalability and global expansion. Direct Tax allows multinational operations to expand globally and supports merger and acquisition activity.
Collaboration and visibility. The composite’s employees have a positive user experience, with task management, standardization tools, and AI features that improve internal collaboration and visibility.
Costs. Three-year, risk-adjusted PV costs for the composite organization include:
Subscription fees. The Direct Tax solution has an annual subscription fee for Thomson Reuters Income Tax, Tax Provision, WorkFlow Manager, and DataFlow.
Implementation fees. The composite organization incurs an implementation fee and uses Thomson Reuters or Thomson Reuters’ preferred partners to implement the Direct Tax solution.
The representative interviews and financial analysis found that a composite organization experiences benefits of $2.8 million over three years versus costs of $1.1 million, adding up to a net present value (NPV) of $1.7 million and an ROI of 148%.
Return on investment (ROI)
Benefits PV
Net present value (NPV)
Payback
| Role | Industry | Region | Revenue | Employees |
|---|---|---|---|---|
| Vice president, tax | Industrial technology | North America | $3.2B | 8K+ |
| Tax manager | Financial services | Global | $2B+ | 12K+ |
| Managing director | Professional services | North America | $2.8B | 9K |
| Senior director, finance and business operations | Software | North America | $100M+ | 400+ |
Prior to Direct Tax, interviewees’ organizations faced significant challenges across the entire tax lifecycle stemming from manual processes, inefficient tools, and limited visibility. Their organizations’ reliance on manual processes, which exposed them to compliance risks, financial and regulatory vulnerabilities, and missed opportunities.
The interviewees noted how their organizations struggled with common challenges, including:
Lack of automation and efficiency. Tax provision calculations and return preparation relied heavily on manual, spreadsheet-based processes that lacked automation, standardization, and audit trails. Interviewees’ organizations faced high error risk, version control issues, and data inconsistencies. Consequently, resources spent significant time preparing and reconciling tax data, and they lost productivity to repetitive, low-value tasks. Their organizations also incurred high consulting fees for audit preparation.
Complexity with business growth. Interviewees’ organizations could not keep pace with business growth or M&A activity. Tax teams struggled to adapt to new jurisdictions and entity structures. Existing manual tools lacked flexibility to handle dynamic organizational changes.
Risks with audits and compliance. Interviewees’ organizations faced difficulties maintaining internal controls and documentation. Due to a lack of transparency and traceability, they also faced auditor pushbacks. Inaccurate filings led to fines, penalties, and remediation costs.
Challenges with data integration and visibility. Interviewees’ organizations lacked centralized data sources for tax records and reporting, which reduced visibility across entities and jurisdictions. They could not manage or incorporate real-time regulatory changes across geographies. Disconnected tools and legacy systems created silos and had difficulties ingesting and mapping data from ERP systems.
The interviewees’ organizations searched for a solution that could:
Improve audit readiness and internal controls.
Standardize and automate tax provision calculations.
Ensure compliance with local tax laws and real-time regulatory updates.
Enable scalability for global operations, support future acquisitions, and reduce compliance risk.
Handle complex M&A activity and global tax structures more efficiently.
Integrate multiple ERP systems into a unified tax platform.
Based on the interviews, Forrester constructed a TEI framework, a composite company, and an ROI analysis that illustrates the areas financially affected. The composite organization is representative of the interviewees’ organizations, and it is used to present the aggregate financial analysis in the next section. The composite organization has the following characteristics:
Description of composite. The global organization is a large enterprise with $10 billion in annual revenue and 5,000 employees.
Deployment characteristics. The composite organization begins using the solution in Year 1 following a six-month implementation period.
$10 billion revenue
5,000 employees
| Ref. | Benefit | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|
| Atr | Avoided compliance costs | $261,250 | $268,613 | $276,229 | $806,092 | $667,029 |
| Btr | Reduced tax preparation time | $475,000 | $484,500 | $494,000 | $1,453,500 | $1,203,381 |
| Ctr | Avoidance of hiring additional resources | $190,000 | $380,000 | $570,000 | $1,140,000 | $915,026 |
| Total benefits (risk-adjusted) | $926,250 | $1,133,113 | $1,340,229 | $3,399,592 | $2,785,436 |
Evidence and data. Interviewees noted that their organizations avoided compliance costs including late filing penalties, error remediation, resubmission costs, and third-party consulting fees.
Interviewees reported that they avoided late filing penalties with Direct Tax’s automated reminders and real-time calendars. WorkFlow tools tracked tasks and deadlines annually.
They also avoided error remediation costs due to centralized data that reduced manual calculation errors and rework, and they avoided resubmission costs from less errors.
Interviewees avoided consulting fees due to improved documentation, reusable workpapers, and automated updates for changing tax laws and formats.
The Thomson Reuters solution kept tax rules updated across countries, and interviewees stated that they could remain compliant with evolving regulations.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
The composite organization continues to scale, growing into new countries and jurisdictions.
It continues to avoid noncompliance fees year over year as regulations evolve and it expands.
Late filing penalties and resubmission costs may increase by 2% annually as the organization grows.
Error remediation and consulting fees may increase by 5% annually.
Risks. Avoided compliance costs may vary based on the number of countries and jurisdictions in which the company files taxes.
Results. To account for these risks, Forrester adjusted this benefit downward by 5%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $667,000.
Late filing penalties avoided per country
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| A1 | Late filing penalties | Interviews | $50,000 | $51,000 | $52,020 | |
| A2 | Resubmission costs | Interviews | $150,000 | $153,000 | $156,060 | |
| A3 | Error remediation | Interviews | $50,000 | $52,500 | $55,125 | |
| A4 | Consulting fees saved | Interviews | $25,000 | $26,250 | $27,563 | |
| At | Avoided compliance costs | A1+A2+A3+A4 | $275,000 | $282,750 | $290,768 | |
| Risk adjustment | ↓5% | |||||
| Atr | Avoided compliance costs (risk-adjusted) | $261,250 | $268,613 | $276,229 | ||
| Three-year total: $806,092 | Three-year present value: $667,029 | |||||
Evidence and data. Interviewees stated that they reduced tax preparation costs when they transitioned to Direct Tax, and that the transition to a structured, automated system reduced tax preparation time by up to 50 percent.
On average, one tax return took interviewees’ organizations 40 hours to complete before Thomson Reuters Direct Tax.
After Direct Tax, interviewees reported saving 20 hours per return.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
The composite organization completes 500 tax returns per year.
It has a tax department with 30 full-time employees, including tax directors, tax managers, tax specialists, and tax analysts.
The fully burdened hourly rate for an employee in the tax department is $50 per hour.
Tax seasons vary across countries depending on the fiscal calendars and tax laws.
Risks. Reduced effort for tax preparation may vary based on:
The level of effort required to complete tax returns.
The number of tax returns completed annually.
Fully burdened salary differences.
Results. To account for these risks, Forrester adjusted this benefit downward by 5%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $1.2 million.
Reduction in tax preparation time
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| B1 | Tax returns | Composite | 500 | 510 | 520 | |
| B2 | Average time spent per tax return before Direct Tax (hours) | Composite | 40 | 40 | 40 | |
| B3 | Percentage reduction in time spent per tax return | Interviews | 50% | 50% | 50% | |
| B4 | Time saved per tax return with Direct Tax (hours) | B2*B3 | 20 | 20 | 20 | |
| B5 | Time saved for tax department with Direct Tax (hours) | B1*B4 | 10,000 | 10,200 | 10,400 | |
| B6 | Fully burdened hourly rate for a tax department employee | Composite | $50 | $50 | $50 | |
| Bt | Reduced tax preparation time | B5*B6 | $500,000 | $510,000 | $520,000 | |
| Risk adjustment | ↓5% | |||||
| Btr | Reduced tax preparation time (risk-adjusted) | $475,000 | $484,500 | $494,000 | ||
| Three-year total: $1,453,500 | Three-year present value: $1,203,381 | |||||
Evidence and data. On average, interviewees’ organizations avoided hiring two additional resources per year as global tax departments became more efficient using Direct Tax. Additionally, interviewees stated that their organizations maintained a flat headcount while still scaling operations.
Interviewees stated that their teams became more agile and capable of handling complex regulatory changes without expanding headcount.
Due to the centralized tax management for multinational operations, interviewees reported not needing to employ local tax teams in every country they operated in and expanded to.
Interviewees said that the platform’s built-in compliance logic, automated localization, and reusable templates allowed their tax teams to enter new jurisdictions without needing to make local tax hires.
Interviewees found that global tax department efficiency improved for tasks including data reconciliation, trial balance updates, tax provisioning, compliance checks, reporting, strategic reviews, and audit preparation.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
The composite organization avoids hiring two additional resources annually.
The average cost per resource is $100,000 annually.
Risks. Avoidance of hiring additional resources may vary based on the cost of hiring and onboarding an employee.
Results. To account for these risks, Forrester adjusted this benefit downward by 5%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $915,000.
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| C1 | Resources | Composite | 2 | 4 | 6 | |
| C2 | Cost per resource | Composite | $100,000 | $100,000 | $100,000 | |
| Ct | Avoidance of hiring additional resources | C1*C2 | $200,000 | $400,000 | $600,000 | |
| Risk adjustment | ↓5% | |||||
| Ctr | Avoidance of hiring additional resources (risk-adjusted) | $190,000 | $380,000 | $570,000 | ||
| Three-year total: $1,140,000 | Three-year present value: $915,026 | |||||
Annual avoided costs for additional resources
Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:
Strategic tax planning and insights. Tax departments moved beyond compliance and into strategic enablement. The Direct Tax platform provided interviewees’ organizations with the ability to deliver real-time analytics, jurisdiction-specific calculations, and standardized reporting as key enablers of strategic decision-making. Interviewees said that with access to reliable, consolidated data across entities and geographies, their tax teams could support merger and acquisition activity with faster integration and clearer visibility into tax implications. Tax teams could also model transfer pricing scenarios and forecast global effective tax rates with confidence.
Scalability and global expansion. Direct Tax supports multinational organizations as they expand into new markets and onboard new entities. The ability to replicate workflows and compliance logic across entities reduces complexity and accelerates expansion.
Collaboration and visibility. Interviewees said that using Direct Tax improved collaboration across their tax teams and enhanced visibility into tax processes. Task management tools, standardized templates, and integration with ERP systems helped their teams:
The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Direct Tax and later realize additional uses and business opportunities, including:
Accelerated onboarding of new entities and jurisdictions. Customers can reduce the time and effort required to integrate newly acquired companies or expand into new markets. Standardized workflows, reusable templates, and built-in compliance logic allow tax teams to onboard new entities without starting from scratch.
Faster time to insight and strategic decision-making. Tax teams can shift from reactive compliance to proactive insight, supporting strategic initiatives like M&A and transfer pricing. With real-time analytics and consolidated reporting, teams can model scenarios, forecast effective tax rates, and respond quickly to executive-level inquiries.
Broader applications across the tax lifecycle. Customers can expand Direct Tax use beyond initial provisioning to estimated taxes, journal entries, and payables. Interviewees reported beginning with core modules and later adopting additional functionality to automate more of the tax lifecycle. This evolution supports continuous improvement and deeper integration with ERP systems.
Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Appendix A).
| Ref. | Cost | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|---|
| Dtr | Subscription fees | $0 | $341,250 | $341,250 | $341,250 | $1,023,750 | $848,638 |
| Etr | Implementation fees | $273,000 | $0 | $0 | $0 | $273,000 | $273,000 |
| Total costs (risk-adjusted) | $273,000 | $341,250 | $341,250 | $341,250 | $1,296,750 | $1,121,638 |
Evidence and data. Interviewees reported their estimated subscription fees for Thomson Reuters Direct Tax solution, which included subscription fees for usage of four products: Income Tax, Tax Provision, WorkFlow Manager, and DataFlow. Pricing may vary. Contact Thomson Reuters for additional details.
Modeling and assumptions. Based on the interviews, Forrester assumes that the composite organization has a 30-person tax department.
Risks. Subscription fees incurred by other organizations may vary based on the size of the organization and the number of users.
Results. To account for these risks, Forrester adjusted this cost upward by 5%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $849,000.
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|---|
| D1 | Income Tax subscription | Interview | $0 | $100,000 | $100,000 | $100,000 |
| D2 | Tax Provision subscription | Interview | $0 | $125,000 | $125,000 | $125,000 |
| D3 | Workflow Manager subscription | Interview | $0 | $50,000 | $50,000 | $50,000 |
| D4 | Dataflow subscription | Interview | $0 | $50,000 | $50,000 | $50,000 |
| Dt | Subscription fees | D1+D2+D3+D4 | $0 | $325,000 | $325,000 | $325,000 |
| Risk adjustment | ↑5% | |||||
| Dtr | Subscription fees (risk-adjusted) | $0 | $341,250 | $341,250 | $341,250 | |
| Three-year total: $1,023,750 | Three-year present value: $848,638 | |||||
Evidence and data. Implementation fees include one-time fees paid to Thomson Reuters or Thomson Reuters’ preferred partners.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
The composite organization uses Thomson Reuters or Thomson Reuters' preferred partners to implement Direct Tax.
The one-time implementation fee for Income Tax is an estimated $100,000.
The one-time implementation fee for Tax Provision is an estimated $160,000.
Risks. Implementation costs may vary based on the complexity of the implementation.
Results. To account for these risks, Forrester adjusted this cost upward by 5%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $273,000.
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|---|
| E1 | Implementation fee for income tax | Interview | $100,000 | $0 | $0 | $0 |
| E2 | Implementation fee for tax provision | Interview | $160,000 | $0 | $0 | $0 |
| Et | Implementation fees | E1+E2 | $260,000 | $0 | $0 | $0 |
| Risk adjustment | ↑5% | |||||
| Etr | Implementation fees (risk-adjusted) | $273,000 | $0 | $0 | $0 | |
| Three-year total: $273,000 | Three-year present value: $273,000 | |||||
| Initial | Year 1 | Year 2 | Year 3 | Total | Present Value | |
|---|---|---|---|---|---|---|
| Total costs | ($273,000) | ($341,250) | ($341,250) | ($341,250) | ($1,296,750) | ($1,121,638) |
| Total benefits | $0 | $926,250 | $1,133,113 | $1,340,229 | $3,399,592 | $2,785,436 |
| Net benefits | ($273,000) | $585,000 | $791,863 | $998,979 | $2,102,842 | $1,663,798 |
| ROI | 148% | |||||
| Payback | <6 months |
The financial results calculated in the Benefits and Costs sections can be used to determine the ROI, NPV, and payback period for the composite organization’s investment. Forrester assumes a yearly discount rate of 10% for this analysis.
These risk-adjusted ROI, NPV, and payback period values are determined by applying risk-adjustment factors to the unadjusted results in each Benefit and Cost section.
The initial investment column contains costs incurred at “time 0” or at the beginning of Year 1 that are not discounted. All other cash flows are discounted using the discount rate at the end of the year. PV calculations are calculated for each total cost and benefit estimate. NPV calculations in the summary tables are the sum of the initial investment and the discounted cash flows in each year. Sums and present value calculations of the Total Benefits, Total Costs, and Cash Flow tables may not exactly add up, as some rounding may occur.
From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment in Direct Tax.
The objective of the framework is to identify the cost, benefit, flexibility, and risk factors that affect the investment decision. Forrester took a multistep approach to evaluate the impact that Direct Tax can have on an organization.
Interviewed Thomson Reuters stakeholders and Forrester analysts to gather data relative to Direct Tax.
Interviewed four people at organizations using Direct Tax to obtain data about costs, benefits, and risks.
Designed a composite organization based on characteristics of the interviewees’ organizations.
Constructed a financial model representative of the interviews using the TEI methodology and risk-adjusted the financial model based on issues and concerns of the interviewees.
Employed four fundamental elements of TEI in modeling the investment impact: benefits, costs, flexibility, and risks. Given the increasing sophistication of ROI analyses related to IT investments, Forrester’s TEI methodology provides a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology.
Benefits represent the value the solution delivers to the business. The TEI methodology places equal weight on the measure of benefits and costs, allowing for a full examination of the solution’s effect on the entire organization.
Costs comprise all expenses necessary to deliver the proposed value, or benefits, of the solution. The methodology captures implementation and ongoing costs associated with the solution.
Flexibility represents the strategic value that can be obtained for some future additional investment building on top of the initial investment already made. The ability to capture that benefit has a PV that can be estimated.
Risks measure the uncertainty of benefit and cost estimates given: 1) the likelihood that estimates will meet original projections and 2) the likelihood that estimates will be tracked over time. TEI risk factors are based on “triangular distribution.”
The present or current value of (discounted) cost and benefit estimates given at an interest rate (the discount rate). The PV of costs and benefits feed into the total NPV of cash flows.
The present or current value of (discounted) future net cash flows given an interest rate (the discount rate). A positive project NPV normally indicates that the investment should be made unless other projects have higher NPVs.
A project’s expected return in percentage terms. ROI is calculated by dividing net benefits (benefits less costs) by costs.
The interest rate used in cash flow analysis to take into account the time value of money. Organizations typically use discount rates between 8% and 16%.
The breakeven point for an investment. This is the point in time at which net benefits (benefits minus costs) equal initial investment or cost.
1 Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s technology decision-making processes and assists solution providers in communicating their value proposition to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of business and technology initiatives to both senior management and other key stakeholders.
Readers should be aware of the following:
This study is commissioned by Thomson Reuters and delivered by Forrester Consulting. It is not meant to be used as a competitive analysis.
Forrester makes no assumptions as to the potential ROI that other organizations will receive. Forrester strongly advises that readers use their own estimates within the framework provided in the study to determine the appropriateness of an investment in Direct Tax.
Thomson Reuters reviewed and provided feedback to Forrester, but Forrester maintains editorial control over the study and its findings and does not accept changes to the study that contradict Forrester’s findings or obscure the meaning of the study.
Thomson Reuters provided the customer names for the interviews but did not participate in the interviews.
Nina Lund
October 2025
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