Get tax perspectives embedded outside of the tax team
Like all functions of business, the tax department has plenty of pain points. Our expert panel agrees that the temptation is to look at improving reporting, returns and audits - because it’s the place where tax departments get involved and the part of the process they can control. However, if you think about it, those are the outputs of earlier activities that sit in a variety of business areas where you have far less control.
You need to work hard to get tax perspectives into the areas other people own. This is where your must haves should be because they dictate the quality of your company’s tax outputs - returns and audits.
For tax teams it means the big task is ensuring tax considerations are included into wider business processes, to make sure reporting, returns and audits are accurate. Otherwise, lots of resources can be spent without resolving the root cause of poor data and inaccuracy etc. It’s difficult to do but must be addressed.
Be data driven and insight led
Increasingly the tax imperative is to get it right the first time. Resolving errors in the reporting phase is increasingly too late due to the rise of real-time reporting and e-invoicing mandates So, another ‘must have’ is to get the tax relevant master data set-up correctly, it has a massive impact on the efficiency of your processes and the quality of its outputs. Get accurate tax determination to happen at the time of transaction time. As one of the panellists points out, “You don’t want to get rubbish through faster - look at what really matters and will give a fundamental impact to outcomes.”
Demand detailed structured insights
You need to know what's happening within your ERP and other financial systems and processes across the organisation and geographies. This way you can identify issues in a structured manner rather than finding out through random incidents or by reacting to questions that might come up. Structured insights help you effectively prioritise what needs to be done.
Look to the future
The other ‘must have’ is a consistent consideration of the future, make sure your requirements are as long term as possible, even if that means some workarounds for less fundamental midterm functions - keep your eye on the long-term prize.
Take back control
By taking a step back and looking at the big picture you can see and assess risk and opportunity far more effectively. You can see vulnerabilities where you might need to shift control. For example, global indirect tax needs to be embedded properly into ERP and other financial systems, so as a tax manager you need to stay in the middle of your company’s ERP and systems evolution.
If tax is to be automated, make sure IT isn't working in isolation, you need to have a say around how IT maintenance and management work when it relates to or affects your company’s tax position or processes. You also need to make sure you have veto power around tax automation and tax relevant master data configuration.
Please remember that Tax Matters provides information for educational purposes, not specific tax or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information. The views and opinions expressed in Tax Matters are those of the authors and do not necessarily reflect the official policy, position, or opinion of Vertex Inc.