Imagine if your tax function could serve as more of a strategic partner offering insights and strategies to grow and strengthen the business. Recent technology developments and transformations in the tax technology space are making this evolution possible. As the speed of business continues to accelerate in tandem with the volume of data being generated, tax is being tasked with answering more complex business questions. Advancements in data availability and self-service tools provide new avenues for the tax to keep pace with the ever-changing business landscape.
All About the Data
Companies that are at the forefront of creating Enterprise Data Platforms and upgrading Enterprise Resource Planning (ERP) systems are remiss to not include tax in design discussions from the onset. Tax is one of the largest consumers of data inside an organization and requires specific information for planning and compliance purposes. Ensuring that the tax department is adequately represented to define requirements and assist in design provides an opportunity for the enterprise to capitalize on the business optimization strategies and hard-dollar tax savings that tax can provide. The ability to make strategic decisions is many times, based on the availability of quality data in a timely fashion.
The rapidly changing tax and business environment puts significant pressure on tax technology vendors, IT, and external service providers to develop solutions suitable for tax. Complexity often correlates to long software development cycles. Tax must often institute interim solutions to adhere to compliance requirements and continue providing necessary business deliverables. There are several powerful self-service tools on the market today that are facilitating tax’s ability to keep pace with the changes.
The term “data wrangling” is relatively new. However, most tax professionals spend an inordinate amount of time manipulating data to derive the necessary information and transform data into a usable format. While IT can, and should, serve as a strategic partner and provide reporting and data in the required format, this can often take considerable development time. Tax professionals often find themselves employing alternatives in the interim.
Data wrangling and self-service data analytic tools offer business analysts the ability to solve complex business problems by creating repeatable visual workflows. If an analyst, for instance, has to manually transform a dataset every single month into a usable format, a data wrangling tool can automate and drastically reduce the time spent managing data. In addition to data wrangling tools, Robotic Process Automation solutions are also transforming the business landscape by automating rudimentary data manipulation, repetitive tasks, and time-consuming data gathering exercises. Data wrangling tools and RPA both empower users by allowing them to redirect their time to more value-added activities.
"Tax is one of the largest consumers of data inside an organization and requires specific information for planning and compliance purposes"
Into the Future
The business and tax landscape is changing. Now more than ever, tax professionals have tools at their disposal never imagined before. Including tax in strategic data decisions and data infrastructure design, as well as providing advanced toolsets, will increase the value that tax provides to the business. Laying a strong foundation will ensure the ability for tax to employ new tools in the areas of predictive analytics and perhaps even artificial intelligence in the future. Will there be a day when a company’s tax compliance requirements are fulfilled immediately as real-time financial transactions are recorded? Will Alexa be able to tell us someday the optimal tax structure for a newly formed business segment or the downstream implications of an acquisition by simply just asking the question out loud? Only time will tell.