Managing indirect tax data in the digital age
Diagnostic tools and data analytics
What information is relevant, and how should it be interpreted and used? Enterprise intelligence (EI) can help an organization optimize its performance by identifying relevant information, analyzing it in a way that produces insights, thereby allowing the organization to act.
Analytics – making sense of “big data” to identify gaps and opportunities
Indirect tax analytics is a wide term used to describe the identification and analysis of indirect tax issues through data interrogation. Approaches range from one-off reports for specific issues, to custom-made tools developed for in-house use, to continuous monitoring by third-party providers.
The complexity of indirect tax reporting means that many — and possibly most — multinational companies have significant indirect tax exposures. At the same time, many are becoming aware of the cost of indirect taxes — including high duty rates, unclaimed input VAT/GST, penalties and the costs of financing indirect tax payments.
Tax and customs administrations are also becoming more active and more sophisticated in their methods of auditing large companies’ indirect tax affairs. But, until recently, most companies have not been able to identify the major indirect tax risks they carry, nor have they been in a position to optimize their working capital and cash flow on a global basis.
Many are now turning to technology to diagnose underlying issues and weaknesses in indirect tax reporting and to identify opportunities to improve performance. The service delivery models may be broadly categorized as follows:
- Analytics as an outsourced one-off service — the company provides data to a third-party service provider to analyze and report back findings for a one-off project or specific purpose
- Analytics as an ongoing outsourced service — the company provides data on a regular basis to a third party and gets the results back online
- Analytics as in-house software — the company buys or commissions software to use in-house, often supported by a third-party service provider for the implementation or design
Differentiate your company through enterprise intelligence
- EI is how companies manage and exploit big data. Using information helps businesses sharpen their performance, differentiate their offerings, identify new revenue and innovation opportunities, minimize their exposure to risk, improve organizational efficiency, and facilitate the uncertainty of a volatile global economy
- Properly utilizing the information they store and matching it from different sources is fast becoming a competitive differentiator for forward-leaning companies
Tax reporting begins and ends with data
- Data is the starting point and the end deliverable of every tax task. If companies do not seize the challenge to manage their tax data effectively, tax and customs administrations will. Tax administrations are becoming smarter, faster and more efficient at using data analytic tools to obtain, analyze and assess underpaid tax and duty amounts. In-depth reviews that once took from three months to two years to complete can now be done on a data-driven basis in a matter of weeks
- As companies begin to outsource tax compliance and run their own data warehousing and dash-boarding solutions, their analysis of tax and trade data is becoming much more proactive. And as companies use data analysis tools more effectively, and their understanding improves, processes become more streamlined, response times fall, opportunities increase and the number of unpleasant tax surprises drops considerably
Diagnostic tools and data analytics
Data analysis can help companies look into the future as well as into the past. By bringing together information from a range of corporate functions and external sources, companies can simulate “what if” scenarios and identify where risks or opportunities could arise and where future resources should be focused.
Indirect tax analytics
Indirect tax analytics and reporting
Data analysis drives better decisions