Our lives have been revolutionized by technological advancements. Technology has also influenced the planning and administration of tax systems in developing countries.
Tax departments are rapidly seeing the value of embracing technology to boost efficiency, streamline operations, and reduce risk. While most companies recognize the need of developing tax technology strategies and implementing associated activities, the majority have yet to make the necessary investments. These expenditures are critical in changing tax into a strategic business partner for the company. Due to the importance of collaboration between tax leadership and company executives, the next steps in the tax function’s progress should be addressed.
Here are some of the most significant factors that technology can aid in corporate tax reform:
COMPLIANCE & ACCURACY
Currently, corporate companies are relying on tax technology as a foundation to control master files and country-by-country reporting to ensure compliance. A consolidated tax technology platform is the best source of correct data for audit substantiation and closing actions. Tax technology can help you avoid outsourcing because your department preserves complete internal expertise and data ownership. Maintaining tax-related tasks in-house can save companies money and allow them to respond to complex queries more quickly and properly.
AUTHENTICITY IN THE PROCESS
In the past few years, tax technology has progressed over spreadsheets and shared drives. You may safely obtain and collect data from any source and effortlessly transfer it to your income tax or tax provision work papers using tax technology. You may also offer standardized and integrated accounting records for all tax procedures, as well as keep them updated as book numbers change. You can fulfill those ever-shrinking timeframes with fewer resources if you have easily available data to compute correct tax accruals and deliver reports and work papers that substantiate the amounts that were booked.
The worldwide structure of business these days presents numerous issues for corporate tax departments. Tax technology provides a solution to worldwide difficulties like time zones and workflow, allowing you to execute coordinated and uninterrupted tax operations. Data sharing via tax technology acts as an intermediary for tax professionals, allowing them to work as if they are in the same facility. Because tax data is always available, it can also help with time zone concerns.
If corporate tax departments are not transparent enough, they may face increased scrutiny, which could result in valuation, reputational, and financial consequences. This emphasizes the importance of transparent data and processes supported by tax technology. Tax technology provides unrivaled visibility into the interconnectedness of computations across tax areas, allowing you to take a comprehensive picture of your tax activities. Technology also helps the audit by reducing the administrative load that comes with extremely strict worldwide disclosure and transparency regulations.
SATISFACTION OF THE TAX TEAM
It is often overlooked by tax departments how significant it is to become a strategic asset to a company. By utilizing tax technology, your team can devote more time to key activities that contribute to the bottom line. You will also have the chance to build a more enjoyable work environment.
KEY INSIGHTS & METRICS
Tax departments can use technology to get the data and information they need to evaluate and make judgments. These figures are crucial for gaining a deeper understanding of the tax department. Using scenario analysis, forecasts in global tax rules, corporate structure, supply chain, and merger and acquisition operations, tax technology may also assist you in planning an effective tax system. Only with the capability of handling transaction situations to meet user-acceptance requirements, you can also make indirect tax planning easier. This capability aids businesses in comprehending the entire impact of new tax settings and documenting existing tax systems, rules, and practices in order to comply.
You should block out regular time to evaluate your tax department’s operational processes and technology, and where you want to be in 5-10 years and make adjustments as needed, as the tax landscape and your company will continue to evolve. Investing in technology will lay a solid foundation for your tax department’s future success.
MAKE THE TRANSITION TO TAX TECHNOLOGY
The type of tax technology you install may be comprehensive and all-encompassing or it may be customized to fit the immediate requirements of the size, complexity, and global nature of your company. It all comes down to examining your present processes and determining what actually works for you, as well as devoting time to thoroughly teaching yourself and your team on a regular basis. When tax technology is effectively implemented, you will see that it significantly improves your existence.
As enforcement tactics become more advanced and compliance rules have become more onerous, internal controls must be strengthened, data and processes improved, analytics enhanced, and automation increased. With new technology solutions, the future of tax may be in the hands of technology – one that can address entire processes, such as collecting data, analyzing it, compiling reports, and auditing activities.