Tax transformed series
New reporting requirements, in Canada, the United States and globally, are adding to the workload of already-overburdened staff. The existing tax function may find the increasing requirements a challenge, as inadequate access to information, outdated technology, lack of documentation and disconnected systems continue to be a reality for some organizations.
But the new requirements don’t have to be a challenge. Rather, they can be an opportunity to address the broader picture, including risk management, while adding value to the organization.
Many Canadian organizations are struggling to understand, act on and comply with several provisions, including:
Finding the right information at the right level can be a challenge. The desired information may appear in different forms in different places, requiring staff to manually dig through emails, binders of paper and multiple spreadsheets. Undocumented processes may leave staff scrambling to find certain information. Platforms and systems may be outdated and inefficient, with function on top of function added on like disconnected layers. Staff may find themselves repeating the same tasks to find overlapping information necessary to comply with the different regulatory regimes. Some companies may be overloading their customers with repeated information requests at the risk of alienating them completely.
It’s important to remember the end goal of these new requirements. Governments are trying to fight corruption, tax fraud and tax evasion. Taxpayers and consumers are demanding greater transparency from both corporate and public bodies. For many organizations, the danger of breaking the rules is less about the fines and financial implications and more about the potential damage to their reputation.
Data must be of good quality, timely and accurate. Canadian and US authorities have already announced upcoming FATCA and CRS audits, focusing on the need for complete and accurate customer data. Relying on poor or incomplete data exposes Canadian organizations to audit risk, reputational risk and unnecessary expense.
Organizations can begin with a self-assessment that considers important questions:
By standardizing sources of information, reusing information when possible and automating the process where feasible, organizations can ensure consistency and drive many inefficiencies.
A number of tools and technologies can help. Improved data management processes let you collect, automate and consume tax-ready data. Collaborative platforms automate workflows, enabling teams to work together more efficiently. Strong internal controls ensure important information is kept and properly archived. Solutions like our tax data hub, an Excel-based framework, gather and connect data from multiple sources. Data can then be easily pulled from this single hub to match different reporting requirements and formats.
Organizations can benefit from conducting a tax strategy assessment to determine where they are, where they want to be and how to get there.
By making the tax function more efficient and effective, organizations can redesign, redefine and redeploy tax to be a strategic business asset. Less time and energy spent on document review and manual data manipulation means your highly skilled professionals can focus on providing strategic advice to your business. At the same time, greater access to useful information allows the tax group to defend tax positions, make strategic decisions and engage in richer dialogues.
While companies must adhere to strict regulations on how they handle the information they collect, with the increased volume of data, artificial intelligence and machine learning are helping to solve complex tax challenges. By fundamentally reimagining the technology, people and processes of the tax function, organizations can unlock the power of data and analytics. This informs your decision-making and creates value by letting you better analyze trends, assess risks, make predictions and identify business opportunities.
Examine where you obtain your information, how the data is recorded and how it’s compiled.
Look for ways to standardize sources of information and automate the data management process.
Take advantage of software tools to reduce reporting errors, improve the quality of your data and free up skilled staff to focus on more strategic issues.