Simply using Same as Last Year’s processes and data flows no longer works as tax teams grapple with gathering and managing disparate data to do their best work.
As legislative changes continue to rock the tax world, tax teams now have a few filing seasons under their belts – and that’s the good news. The bad news? Most teams have discovered they can no longer repeat what they used to do – and that means firing SALY.
The SALY approach guided tax teams for decades as they leveraged and tweaked the same spreadsheet-based calculations to accommodate incremental changes year-over-year. But in today’s world, SALY costs valuable time collecting, organizing, and managing data for consumption throughout tax processes.
Not only must teams adjust their calculations in the short term to meet sweeping changes required by TCJA and CARES, they need to re-imagine their tax processes. Modernizing their approach – from gathering source data to analyzing it – is what matters today.
Based on our work with corporate tax teams, we’re seeing these issues emerge:
- Established processes don’t support complex reporting.
- Bottlenecks and redundancy impede workflows.
- Executive- and management-level analytics require data transparency and the ability to instantly report at any level of detail.
Challenge 1: Established processes don’t support complex reporting.
Repeating traditional methods requires tax teams to:
- Deal with multiple systems to amass data for TCJA reporting
- Validate, group, and ungroup data from numerous places to report on provision and compliance
- Store, move, and manipulate tax data using Excel workbooks
- Pull trial balance data from ERP system(s) for provision and compliance and manually run and re-run book-tax differences
- Risk errors due to outdated files and incorrect versions
- Struggle with variable trial balance feeds, wreaking havoc on processes dependent on source data
- Account for dependencies introduced by TCJA, where changing even one item affects numerous calculations
Solution: Automate complex and repeatable processes with support back to the source.
Tax teams benefit from the ability to automate source data feeds and make automated adjustments an extension of the trial balance upload. While tax-sensitizing source accounts is a viable option, we see many teams leverage database connectivity to automate the “pull-and-push” of data from ERP and other source systems into their tax system. Examples include entities, accounts, adjustments, and calculated values.
The ability to import raw trial balance data and automate the mapping and structure of data, adjustments, calculations, and report packages, provides high value. This alone can yield astounding results: some teams see their current provision calculations 75% complete – which jump-starts the process tremendously. Who couldn’t use more help and time for the close?
Challenge 2: TCJA created the need to examine workflows and understand bottlenecks, redundancies, and dependencies.
In spite of good intentions, bottlenecks happen for many reasons:
- Manually moving, copying, and/or importing data into a system
- Lack of ability to work on a file concurrently with someone else
- Updating or creating new spreadsheets
- Ticking and tying data on reports and returns
Solution: A tax database provides one system of record and builds repeatable, sustainable workflows into processes.
A common database helps ensure version control and data governance. By automating data from source(s), tax teams eliminate manual manipulation. Less manual work speeds up the tax lifecycle and minimizes errors.
Without a database, tax teams are left managing siloes of data from provision to compliance. They lose valuable time trying to extract form-level data and manually triggering calculation updates as source data changes.
By providing rules and standardization, a tax database reduces risks stemming from working in Excel. You move data into the database quickly and easily, making the downstream effect much more efficient, especially when repeating processes. Instead of creating and checking spreadsheets, you go back to one system of record. Plus, repeatable, standardized, and automated processes allow you to easily import balances as many times as needed.
Challenge 3: Good analytics require transparency to underlying data to support ad-hoc reporting at all levels of detail.
Tax teams are moving away from forms-driven reviews to data-driven reviews. International and domestic taxing authorities increasingly ask for underlying data, and they base regulatory reviews upon analyzing that data, rather than looking at data on forms.
Plus, with more tax modifications on the horizon, tax professionals need ways to accommodate changes, quickly and accurately. When compliance data lives in one silo and provision data in another, continuously updating and comparing data as it inevitably changes not only adds work, but risk as well.
Solution: Instant access to all levels of data for analysis, planning, and reporting allows you to spend more time contributing to the company’s strategic goals.
CSC Corptax® helps you build a tax database infrastructure to seamlessly connect to your analytical programs and visualize data. The system provides access to all tax data with a common architecture for direct tax reporting. Storing data in a tax database eliminates the need to move and manipulate data through workbooks and disparate systems.
As client Jessica Thompson, Gordon Food’s Senior Tax Accountant, states, “We’re not paid to input numbers but to make the best decisions for our companies. Automation is the only way we get time to do that.”
A database-driven tax solution automates processes, structures data, and creates numerous efficiencies—increasing confidence in reporting. Data housed in one place gives all stakeholders access to consistent data-sets to support detailed and high-level reporting and analytics.
If these challenges resound with you, and you’d like to understand more about CSC Corptax database connectivity solutions, please contact us. Customers can reach out to their Account Manager or CSC Corptax® Professional Services advocate. We invite everyone else to email firstname.lastname@example.org or call 800.966.1639.
About Eric Ziemann
A senior manager on the Corptax Professional Services team, Eric focuses on tax data metrics and analytics solutions to help customers do more of the work that matters.