When we interviewed 300 business decision-makers for our Reframing Tax research, their top two challenges were keeping pace with regulatory change and managing compliance.
It’s easy to see why amid an influx of tax reform, increasing tax authority scrutiny and heightened risk of audits. At the same time, boards want ever more data, analysis and insights from your tax team, not just in relation to the latest tax changes, but also to help deal with the disruptive impacts of shifts in business models and markets.
And as you’re more than aware, there’s unlikely to be any extra funds to help meet these growing demands. Often the opposite. Pressure to contain costs while raising salaries to help attract and retain scarce tax professionals can often lead to operational cutbacks or postponement and even shelving of much needed systems modernisation.
There’s a tendency to accept these strains on people and systems as an unwelcome but unavoidable fact of life. But this needn’t be the case. Yes, tax teams’ workload is becoming ever more complex and extensive. But the challenges can just as easily stem from needlessly siloed, duplicated and labour-intensive processes, which ratchet up the costs, hold up delivery and make poor use of tax professionals’ precious time.
Four ways to transform your capabilities
So how can you get your tax team up to speed? We’ve long been conscious of the strains facing our clients. So a few years ago, we started out on a journey to help them simplify their compliance processes and free up capacity. The overall aim is to help them meet new regulatory demands, while still providing increased insight and support for the business. The result is ‘Connected tax compliance’, an end-to-end approach that brings together people, technology and processes across multiple taxes and technologies.
On this journey, we’ve found that focusing on four areas in particular can drastically boost the value you deliver from compliance:
- Gear up for the future of tax
- Step up the pace of automation
- Use the insights coming off the back of greater coordination and automation
- Take advantage of partner resources
Gear up for the future of tax
The latest round of tax reforms is ushering in more registrations, more potential liabilities and more filings. Tax authorities also want data to be supplied in real-time. This not only increases systems demands but also leaves little or no time to check and correct information before sending it over.
The result is a race to strengthen the quality of data and underlying governance and digital audit trails. The key to speed and reliability is close connection and coordination between finance and tax teams across different taxes and territories, harnessing both existing networks and new technologies. We call this ‘Coordinate to accelerate’. This means getting straight to the right people with the right answers to accelerate your work streams. It also means sharpening oversight and control through one simplified experience and approach.
Step up the pace of automation
Well over half of the entire compliance process is taken up with data extraction, cleansing and analysis of information. Our research also indicates another 10% is spent on internal administration. This leaves limited time for preparation, review and risk management, while diverting tax professionals from other business priorities.
We therefore focus on ‘Automating to accelerate’. The aim is to save time at every step by harnessing technology and targeted automation to speed up large elements of the compliance data process. The result is high quality standardised data sets in real-time and much less time and effort spent on routine compliance.
Use the insights coming off the back of greater coordination and automation
Once automation and coordination have given you access to faster and more reliable tax data, you can use powerful analytics and intuitive data visualisation tools to identify trends and patterns. We call this ‘Illuminate to accelerate’. The results can not only improve your compliance position, but also aid wider business decision-making and help you discover previously unseen opportunities.
Take advantage of partner resources
Bringing systems and talent up to scratch can stretch budgets. For some aspects of your operations, ‘borrowing’ could therefore be a more cost-effective option. Partnering with today’s increasingly sophisticated tax service providers allows you to gain access to their breadth of expertise, resources and state-of-the-art technology.
Their scale helps them to keep investing in the latest systems and quickly respond to new compliance demands, so you don’t have to shoulder the burden. You can also dial-up and dial-down support, helping you to meet variable demands while controlling fixed costs.
Simplify to accelerate
Keeping up with regulation is your tax team’s biggest challenge. But if you can unclutter your operations and step-up automation, you can not only make the load manageable, but also make much more valuable use of your insight and expertise.
If you want to find out more about Connected tax compliance and how it can transform your business, please get in touch.
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