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Tax Provision

How to reduce risks with tax provision software

· 6 minute read

· 6 minute read

Corporate tax teams are facing an array of risks, new and old, that complicate their ability to deliver an accurate and defendable tax provision within an ever-shrinking financial close window. These liabilities include new flexible work models; challenges accessing tax data and streamlining workflows; and regulatory developments, including global minimum tax, among other concerns. The good news is that corporate tax provision software can help your tax team mitigate these risks without requiring you to outsource or use contingent staff — so you can keep your processes in-house and maintain full control.

What challenges does your tax department face?

The financial close process is becoming increasingly complicated, and turnaround times are shrinking. Preparing tax packages prior to year-end requires significant time and investment from all team members. There’s no time for process waste, outdated spreadsheets, or calculation errors. Even when all goes according to plan, manual processes and data rework create significant inefficiencies that slow the pace of completing tax filings.

Additionally, it is becoming more important for companies to facilitate greater agility for staff and ensure work is done efficiently even as employees adopt more flexible work arrangements. Having the right tools in place will help mitigate some of the challenges associated with remote work and will improve overall workflows for an increasingly nimble workforce.  

Further still, data storage and accessibility has evolved along with flexible work arrangements, and storage mechanisms may be dispersed over large physical and digital areas – the singular filing cabinets of old, in many cases, no longer exist. 

Under these circumstances, it is prudent to make sure the right pieces are in place to handle today’s and tomorrow’s challenges. Tax departments with strong, adaptable workflow controls and effective tech solutions in place are set to succeed in this dynamic environment. Let’s explore how to do that below. 

Leverage clean data

Easy access to clean data is the key to meeting these challenges, and corporate tax provision software can deliver. With the right tax software, you can collect data once, aggregate it, and format it for use in all of your tax processes. Because it’s stored in a single data repository, your data is easy to use and share across functions. For example, digital data collection and workflows can analyze record summaries in seconds, giving you a repeatable process and data that’s ready to be used for compliance and reporting.

With tax data management software, you can standardize existing tax packages and workpapers while adhering to key controls. This software allows you to validate data and use automation to flow that data into your chosen tax applications at prescheduled times. In addition, digital reminders for tasks, due date tracking, and progress reports keep your team on track for meeting filing deadlines.

And corporate tax provision software can take the stress, delays, and error out of preparing tax packages, enabling you to meet all your filing obligations across the globe with less tedious work. You retain tight control of tax processes while streamlining collaboration and workflow. As a result, your team can focus more time on value-added work, such as analysis, risk management, and business planning.

Tax professionals who use corporate tax provision software say they can accelerate processes by 30% to 50% while ensuring the quality of deliverables, strengthening internal controls, and improving linkages between tax and compliance.

Get ready for more regulatory changes

Corporate tax provision software will also help you prepare for regulatory change at a regional, federal or country, and state level. In the US, corporate taxes may be raised to generate revenue for sweeping infrastructure investments. A global minimum tax is also in the works, which will deter corporations from offshoring workers and investments. When implemented, the tax plan will require companies to pay more in the countries where they have the highest revenues, regardless of where they have physical assets such as offices and plants.

These proposals should put corporate leaders and their tax teams on high alert: Major changes will require foresight and action. Tax leaders need to provide strategic counsel to the C-suite on the implications of these regulations. For example, C-level leaders might consider changing corporate entity structures or near-shoring critical capabilities if the tax advantages of operating in certain countries disappear.

Your tax team needs to evolve proactively to deliver the analysis, insights, and guidance your company needs. With the right tax technology, you can move beyond routine data wrangling to become a strategic partner — without adding staff or outsourcing.

Use corporate tax provision software to mitigate key risks

To mitigate current and emerging risks, you need to work directly with stakeholders, and that means providing transparency into your processes. Corporate tax provision software lets you provide near-real-time analytics and reporting on large data sets, so you can clarify your current and expected tax obligations in all the geographies you serve.

You also can use your data in tax applications to model different scenarios, such as exploring the tax implications of moving operations from one geography to another or expanding in key regions. By doing robust scenario planning, you can help the C-suite make the best decisions for corporate growth and profitability.

Gain the capabilities of a robust corporate tax provision software solution

Thomson Reuters ONESOURCE™ provides you with the data management, compliance, analytics, and reporting capabilities you need to collaboratively solve business challenges with stakeholders and reduce risk. Use ONESOURCE  to simplify data capture, aggregation, and extraction, while maintaining stringent controls. Leverage our patented calculation engine to generate tax entries with integrated user workflows, reviews, and approvals. And instantly create reports and analytics that empower the business to understand marketplace change and make critical decisions about your company’s growth.

Learn about tax provision software for corporate tax businesses


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