Future of Tax Insights series episode 5: Why is getting good quality data in real time so tricky?

Transcript

Sabine Barlage
Welcome back to our Future of Tax Function Insight series. I'm Sabine Barlage and with us today is Stan Berings, who focuses on Connected Tax Compliance in the Netherlands and the EMEA region. Stan, we know with the rise of real time reporting that having good quality data at your fingertips is going to become increasing critical. In our Future of Tax survey, we asked organizations about their compliance data. What was the key message we got from that in terms of issues with compliance data?

Stan Berings
Thanks Sabine, from the results of the survey and our discussions with clients, the dilemma that many organizations face is that the finance and tax systems are fragmented. Tax data lives in various locations and gathering it is difficult because it can span several business units and territories. Once organizations have it, providing a digital audit trail which is needed for real time reporting, proves tricky and the quality of the data is often questionable. In terms of gathering data our survey told us that just 29% of organizations said “All data I need for tax compliance is stored in a central repository.” And only 26% had a full digital audit trail. When it came to the quality of compliance data, 31% of respondents said that data was less good, with 44% saying that they were unable to access high quality data quickly.

So the issue is not just about having data in one place and connected digitally, organizations also need better quality data.

Sabine Barlage
Right. So how do organizations find a solution to do this?

They must have a clear data first strategy that is integrated into all essential departments in the organization. When we work together with our clients to define a data strategy, we focus on four key areas: Gathering data - which is all about understanding your data sources, what you need and what you have. Then you can create a central catalog for your master data which will allow you to manage and use tax data across all tax workstreams and filings.

Stan Berings
Transform - Once your data is defined, map its flow through your systems to find common elements. Explore how ‘connected data technologies’ and automation can help reduce manual activities involved with data transformation. Activate - Taxify your data for tax returns, tax modeling and tax planning. Look into the technologies available to you to directly map data into your tax outputs and filings.

And then finally, Experience - ask yourself, how can your organization utilize tools like Power BI and AI to interpret your data outside of your tax filings. In order to highlight trends, and spot outliers?

Sabine Barlage
Okay. So four key areas to think about. How does PwC help their clients explore these?

Well, if I just focus on the one thing that we see as a real game changer for our clients in our Connected Tax Compliance approach, it is Connected Data Technologies. When you connect data technologies via things like a Tax Data Hub, there is an opportunity for collaboration across your various technology systems to collect tax data in a streamlined, structured format.

Stan Berings
Think of it like a wheel with a hub at the center... A tax data hub centralizes and automates the management and collection of data from different sources so information is easy to share. When Raw source data is loaded into the hub, the process is automated to reduce the time and risk associated with data collection. Once the hub is loaded, you can connect tax applications, work papers, business intelligence tools and report to it - like spokes.

Connected data technologies can also transform how you approach the reconciliation of data amongst external consolidated financial, tax, and local statutory reporting. Workiva is a great example of a tech solution that can connect finance and data processes and remove hundreds, if not thousands of hours of manual reconciliation.

Sabine Barlage
Thanks Stan. So if there was one key message on how to approach getting good quality data for compliance and reporting, what would it be?

Stan Berings
It would be that every tax department or function should have a clear data strategy. The data strategy should not be limited to what data is needed and when, but how to gather and connect this data across filings in the most effective way. Plus how to use this data to provide value beyond the tax returns and filings. As only then will compliance be something that helps tax departments to add greater value to the wider organization and accelerate outcomes.

Sabine Barlage
Thanks Stan. For more information on how our human led tech powered connected tax compliance approach can help you tackle your compliance data issues, visit our website. Thank you for coming. We hope you will join us for our next conversation, which will tackle the complexity that Pillar Two is bringing to compliance and reporting.