The average tax department spends roughly 80 percent of their time collecting and entering data, and only 20 percent of their time actually using that data.
As the burden of corporate tax compliance mounts, companies are increasingly turning to tax and accounting firms for help in complying with direct tax requirements. In today’s business environment, the deliverables are no doubt important; however, it’s the input, or the streamlining of data collection, that can be the true game-changing benefit for firms.
“When we think about these pressures, oftentimes … our minds immediately go to the output rather than the input. We think about how accurate the information on a tax return or report is when it is filed with the taxing authority. When, instead, our minds should be focused on the input and the collection and aggregation process of all the information and data used throughout the tax and accounting workflows,” said Corey Greene, Senior Outbound Product Marketing Manager, Tax & Accounting Professionals at Thomson Reuters.
The danger of inefficient data collection
Greene noted that the average tax department spends roughly 80 per cent of its time collecting and entering data, and only 20 per cent of its time using that data. Not only is this an inefficient use of time, but it also opens the door to a greater risk of errors and miscommunication.
“Because they are collecting this data from so many different sources, and they are collecting it in so many different formats at so many different times, there’s an ever-increasing risk of error, of misinterpretation, of miscommunication — all of which represents unnecessary pressure added to an already high-pressure situation being the compressed busy season that these busy professionals have to complete this growing pile of work,” Greene said.
While it is certainly understandable that much of the focus centers on the output, given the expectations and pressures companies face from external regulators and internal stakeholders, it is important to keep in mind that accuracy stems from streamlining and automating the data collection and preparation process.
That’s why it is essential for firms to have a robust corporate tax technology platform in place. The Thomson Reuters ONESOURCE suite of solutions, for example, offers direct tax software and usage of direct tax functions, which are key benefits to help elevate a firm’s direct tax functions.
Let’s take a closer look.
How can direct tax software help with tax reporting?
When firms have access to a unique platform that drives automation and improves tax reporting efficiencies, they are better positioned to meet client expectations quickly and accurately. Amid a complex and ever-changing regulatory environment, tax professionals are expected to produce fast results.
This means leveraging a solution like ONESOURCE, that delivers comprehensive filing capabilities and simplifies the calculation and reporting of federal, state, and international foreign tax credits, earnings, profits, and deemed-paid credits — all on a singular platform. This eliminates the need to implement more specialty applications to connect the dots, or the reliance on time-consuming manual options.
Automation capabilities and automatic data ingestion are critical for more efficient tax reporting, allowing you to save time and reduce errors.
To keep pace with the complex regulatory environment, firms must have the ability to quickly and efficiently conduct tax research. Through ONESOURCE, professionals can conduct efficient research with a built-in, customizable tax law database that is tailored to meet the specific needs of the firm.
What benefits does direct tax software offer corporate tax reporting?
Through premier direct tax software, firms can strengthen their role as trusted advisors by mapping out different scenarios, comparing the tax liabilities for each scenario, and slicing and dicing data to further unlock valuable insights. Furthermore, firms can create reports to support their stances during the tax provision work.
Data is king. Therefore, it is critical that firms have access to the data they need, when they need it, as well as the ability leverage that data and explore what-if scenarios.
Seamless integration of data allows information to be shared end-to-end across the entire platform to save time and mitigate the risk of errors. This means that any changes are reflected in all applications and returns, including ONESOURCE Tax Provision, the estimated payments module, and the ONESOURCE International Tax Calculator.
Through ONESOURCE, firms can also reap the benefits of a comprehensive tax accounting system for trial balances, as well as have the ability to gather, calculate, and review state apportionment information in a centralized system for greater efficiencies.
What are the benefits of direct tax software for workflow management?
A key ingredient for successful workflow management is customization. ONESOURCE direct tax software provides firms the ability to customize workflow at a granular level — to create a system of automation and information visualization that is really tailored to meet the needs of their firm. This involves the ability to prioritize and monitor tasks, track any regulatory changes, leverage customizable templates for schedules and tax work papers, and set up rules and permissions for each user within the firm.
The workflow management platform is the key component that enables firms to realize a greater level of automation across the entire workflow process.
With proper workflow management in place, firms can reduce risk through clear processes and have a full audit trail in place.
Getting started with direct tax software
The challenges that companies face in trying to comply with direct tax obligations can be significant. Fortunately, they are not impossible to overcome. With the right tools and resources in place, firms can help their clients ensure direct tax compliance.
Get started by exploring everything ONESOURCE corporate tax software has to offer.
From providing the necessary tools and capabilities to simplify direct tax operations, to reducing risk and increasing accuracy, ONESOURCE is a powerful platform built to help firms take control of their direct tax operations.
