Four Areas Where Tax Technology Reduces Risk
Tax departments are faced with continually increasing complexity and ever-evolving challenges, yet only about 25-30% of mid to large-sized organizations have taken advantage of modern technologies to automate their tax processes. For many of these organizations, the status quo of Excel has simply prevailed. For others, it’s a lack of understanding of the true business case behind tax technologies.
Often, tax technology is considered only after a deficiency has been found in the process. The reality is, the longer a company waits to transform and modernize its tax function, the more risk it takes.
No technology can completely eliminate risk, but it will greatly improve the overall tax process if designed and implemented properly. Here are four areas to consider:
Today’s tax function is constantly under pressure. Companies face an increasing level of scrutiny from their external audit firms, while the timeframes for the closing process continue to shrink. Automating manual tasks allows late adjustments to be processed quickly. It also enables faster reporting while allowing for the rapid identifying, assessing and resolving of issues.
A centralized tax technology platform is perhaps the best way to maintain consistent, accurate data. Unlike multiple, complex spreadsheets, it provides a single, integrated tax data source. Automated data also means less human intervention, which in turn means less likelihood for error.
By automating manual tasks and streamlining data gathering and validation processes, tax technology allows your tax department to spend less time collecting and manipulating data and more time on strategic work such as running tax planning scenarios and managing the effective tax rate for your organization.
Tax technology provides a complete, integrated perspective of your company’s data, allowing you to analyze from the top down. An end-to-end, automated tax process as opposed to numerous, disconnected sub-processes that need to be bundled together can help you gain key insights and make more informed tax decisions.
Tax technology solutions include tax compliance, accounting for income taxes, tax research tools and document management tools. Some even provide out-of-the box functionality, which can help address many tax documentation and evidencing needs almost immediately.
Finding and implementing a technology solution can be difficult, but very rewarding. True Partners Consulting has experienced tax professionals who can help transform your tax processes. We will identify an efficient solution that’s technically correct, while at the same time analyzing and improving your internal controls to further reduce risk. Let us help you. To learn more about our Tax Technology solutions, contact John Bennecke at John.Bennecke@TPCtax.com.