Top 5 data challenges and tips for indirect tax professionals
Managing indirect tax comes with many challenges for your indirect tax team, and one of the most vexing is reporting. Tracking and reporting on sales and use tax, value-added tax (VAT), and goods and services tax (GST) can be time-consuming, error-prone, and frustrating.
But it doesn’t have to be that way. Efficient indirect tax software can remove data silos so you can access your data, generate reports quickly in a variety of formats, and get what you need from your most valuable asset – your tax data. When you can extract, manipulate, analyze, and report indirect tax data in exactly the way you need it, you can overcome the biggest hurdles in indirect tax reporting.
Do you consider yourself data-driven? Ask these 10 questions to see if you’re making the most of your indirect tax data.
Here are five of the largest data and reporting challenges you may face and how to address them.
Data challenge #1: I'm locked into standard tax reports
Many sales and use tax, VAT, and GST teams must depend on generic reporting formats that are not customized to meet their specific needs. In this case, one size does not fit all. Even customers in the same location or industry may have different ways in which they need to look at their data.
When standardized, generic reports can’t meet your indirect tax team’s needs, you have limited – and often painful – options. You might need to go to your IT department and ask for help, which can be time-consuming and does not scale. Or you might do a data dump and piece together a custom report yourself, which is also time-consuming and invites errors and aggravation.
This is a particular tax challenge for the manufacturing industry, as indirect tax teams in this sector often need to filter down to granular levels to parse data for manufacturing credits and incentives. Generic tax reports don’t let them get to that data.
Tip #1: The good news is that there are software tools that allow for that level of reporting customization – right in the application. Thomson Reuters™ ONESOURCE Determination allows you to draw from all your tax data to build the reports you need, all within the framework of the application.
Data challenge #2: Indirect tax reports take too long to run
When you’re processing large volumes of data, running reports can take hours – if the report completes at all. Traditional reporting tools may leave you sitting idle while you wait for your reports, and that’s wasted time that costs your company money. Worse, the resulting report may include more data than you need, which makes your wait time that much more frustrating.
ONESOURCE includes best-in-class business intelligence tools that allow you to run granular data more quickly and even get sample views and summarized data. With a sample view, you can see what the final report will look like before it runs, which allows you to spot problems ahead of time. Summary options let you more quickly get to a place where you can interpret the data, even if the finalized report is not complete. In high-volume businesses such as retail and e-commerce, these tools are a significant advantage.
ONESOURCE’s reporting architecture is designed to provide full access to all your reporting data, without affecting the speed and efficiency of the engine’s tax determination processing power.
Tip #2: Remember, it’s your data. Your tax technology should provide tools and functionality that make it easy to create and run the reports you need – on your time.
Data challenge #3: I have more indirect tax data than my system can handle
One common challenge for indirect tax teams is having too much data and no way to make sense of it. With so much data to manage, companies will often organize it into silos. While this practice can help keep data under control, it presents problems. You need all your data to be in the same place to generate the full range of reports you need. When your data is chopped up, you may have to run and collate four or five different reports to get the reporting that you need.
High volumes of data can overwhelm technology tools, many of which simply aren’t powerful enough to deal with that much data. This can be a particular concern for e-commerce retailers, who often deal with extremely high transaction counts. They might be making millions of transactions per month and need to see their monthly data summarized by product and state, county, and city. This requires a massive report – hundreds of thousands of lines – that must be carefully organized with multiple layers of data and the ability to drill down to see granular data, i.e. state, county, and cities within that state.
With ONESOURCE Determination, you can get this kind of organization and detail. Tax teams can use ONESOURCE’s reporting tool to handle large data volumes and get the transactional data they need.
Tip #3: Your indirect tax software must be able to handle all of your data in order to generate accurate, actionable reports.
Data challenge #4: It’s difficult to perform ad hoc analysis
Indirect tax teams may receive requests for ad hoc analysis for various reasons, the most pressing of which is to respond to audits. The information that auditors request is usually specific, and tax teams must be agile enough to respond quickly with accurate reporting. This means manipulating data easily and sampling the final report before running it to ensure that it delivers the result you need with accuracy.
Check out these four ways you can use indirect tax analytics to prepare for tax audits, respond to customer inquiries, identify tax credits, and monitor nexus thresholds.
ONESOURCE allows you to access and filter the required data so it can be presented in a way that meets the auditors’ expectations. You can do this easily by using drag-and-drop tools and performing calculations right in the dashboard. ONESOURCE also lets tax teams create sample sets to check the structure before running the whole report. This provides a way for you to craft an initial response to an audit request quickly, which is particularly important in the audit process.
Tip #4: Consider whether your tax analytics software is self-service or not. Does the software provide drag-and-drop and filtering tools that make it easy for you to investigate the data yourself, without requiring IT intervention?
Data challenge #5: I can't get my indirect tax data out of my application accurately and securely
Many companies are likely to keep their data in a data warehouse. Using our data API, you can systematically populate your data warehouse with your reporting data from ONESOURCE. Occasionally you may need to populate data into another system, such as a customer relationship management (CRM) system. Our flexible ONESOURCE Data API can support updates into a variety of applications.
Without the right tools, this can be a multistep process that is apt to introduce errors and security risks – especially if your process involves manual tasks. Without a robust reporting and analytics software solution, you may struggle with data access issues that not only slow you down but expose you to compliance problems.
Tip #5: ONESOURCE APIs provide a programmatic way to access your data accurately and securely. Additionally, using an API means you can set any level of security through authentication, secret keys, and tokens.
Getting the indirect tax data you need in the way you need it
Indirect tax professionals need accessible and robust tax reporting capabilities. You must be able to deliver tailored reports that bring greater value to the business – without the help of your IT department.
After all, your data is yours. You should be able to use it in a way that’s most useful to you. And if you’re sharing your data, you need confidence in that data and your ability to get it.
ONESOURCE global tax determination software gives you tools and access to your data in ways that work for you – from standard and build-your-own reports to summary and detail reports, plus a data API for customizable control. These are flexible tools that allow you to ask whatever question you want, find the answer, and filter down to all the tax detail you need.
Learn more about how to use your indirect tax data for faster analytics and reporting.