Responding to the increasing ‘data challenge’
Driven by the increasing trend towards digital and real-time reporting, many tax departments are facing data challenges. ERP systems that should provide this information are put in place at different times, have different objectives, and were probably implemented when the organization looked very different. Especially for organizations with decentralized operating structures, the number of these systems can run into the hundreds.
As a result, there is rarely one central place for tax professionals to find all the information they need. Many tax departments spend more time gaining access to data, assembling it, and correcting it than performing actual tax work. Imagine if just a portion of that time could be recovered and reallocated. That lost value is increasingly causing tax leaders to seek answers and solutions in the form of technology-enabled data management solutions.
Lack of data access and efficiency is one aspect of data challenges, with data quality being the other. Automation alone simply runs the risk of only moving bad data faster. At some point in the process, data quality has to be addressed or at least managed; Tax Data Management & Intelligence.
What are the key challenges facing organizations?
- Difficulty in obtaining the data required to prepare tax filings — the data often comes from many different sources and getting the data in the required format is a time‑consuming task.
- Limited visibility into the activities or transactions being carried out by the business.
- Instead of preventing problems arising, tax professionals are managing tax problems for transactions that have already taken place.
By clearly defining tax data challenges and with an awareness of available technologies, organizations can find solutions for their specific needs. Not all problems can be solved with one solution and the practicalities of available time and budget have to be recognized. However, an incremental data strategy executed over time can be a practical way to organize your tax department in the future.
How can we help?
Tax Data Strategy and Governance
Managing tax data can be quite challenging. Information is often spread over different systems and falls under many different responsibilities. To be able to secure the quality of the data, and ultimately the quality of compliance reports, determining a strategy and governance around it is essential. The KPMG Tax Reimagined concept can be used to define a ‘fit for purpose’ tax data strategy for organizing your tax department in the future.
Tax Data Management Implementation
Having access to data is key to getting visibility into activities and transactions, performing automated tax controls, and preparing tax filings. By implementing a Tax Data Management solution at your offices, this is no longer an issue as data from multiple sources is consolidated in one technology agnostic data foundation. Based on your ambitions and technology roadmap, an implementation approach can be determined; whether you want to improve the quality and efficiency of the month-end compliance process, or even if you want to have real-time tax controls and insights (e.g. using SAP HANA technology).
Tax Data Management as a Service
For some clients, implementing a full Tax Data Management solution is not the right way to proceed, for example because it does not fit with the technology roadmap. Tax Data Management as a service provides you with visibility into and control of your tax process and data, but without the need to implement a solution at your offices. For the most frequently used standard ERP systems (SAP, Oracle, etc.) data extractors and connectors are already available, but other (custom) source systems can be connected as well using our knowledge of tax data in (ERP) systems.
If you would like to know more about Tax Data Management & Intelligence or if you have questions of a more general nature, please contact our specialists. They will be pleased to provide you with further information or advice.