Why a connected approach is needed?
Before we look more closely at the benefits of a better-connected tax function, let’s first take a look at what these connections are. And, what they mean for your corporation.
1. Better stakeholder connections
When we talk about stakeholders, we don’t just mean your board. It’s also about investors, tax authorities or even a socially engaged public that you need to build trust with.
Tax authorities are challenging business and tax functions globally as they evolve into intelligent Digital Tax Administrations (DTAs).
Globally tax functions that are dealing with DTAs have seen a noticeable impact on operations and have started to take clear action. In fact, our 2020 EY Global Tax Technology and Transformation Survey has found that 98% of global companies in countries with DTAs are organising their response to DTAs in a centralised and globally consistent manner
It means that they need to increasingly file in real-time through digital methods, and they need more information around data for risk profiling and auditing.
And this all points to the need for combatting this through smarter and more connected approaches.
2. Improved data connections
Clean data is required for all tax activities. This brings us onto how data can transform your tax function, and then in turn transform the performance of your business. Spreadsheets are often the symptom of multiple data sources and systems not being set up correctly for tax, which lead to significant amounts of professional time spent on data extraction and cleansing. According to our survey the majority of companies surveyed still spend 40-70% of their time on data cleansing.
In some instances, companies are dealing with various ERPs, which will inevitably lead to more time collecting, cleaning and manipulating data than it needs to. While the tax function cannot control the number of ERPs, it can influence the design and governance of them. According to our survey, only 45% of tax clients surveyed participate in ERP implementations or upgrades.
Where possible, tax functions need to be involved in ERP implementations or upgrades to focus on improving the quality of data sources and transaction-level information and finding a way to better integrate your tax function’s data with other areas of your business.
In light of recent times, many tax functions are leveraging data visualisation tools to deliver timely insights and global oversight and tracking to the tax team.
This efficiency can be translated into faster decision-making and risk assessment. Not just for your tax department but across all departments.
3. More efficient interdepartmental connections
From your IT department to the front lines of your business, the knowledge and confidence a better-connected tax function will give your organisation cannot be overstated.
It means transforming the role of tax in your organisation so that it becomes a more central part of strategic decision making.
The benefit of this in turn, will lead to more strategic decision-making across the entire organisation.
How EY Connected Tax can help you build a better tax function
EY Connected Tax works with the challenges and opportunities facing your businesses tax function. It allows you to reshape how it operates so it is better built for the future.
You can do this by tailoring our latest smart tools and strategic thinking to not only understand those challenges, but to master them. And not just to spot more opportunities, but to take advantage of them.
The benefits of Connected Tax will allow you to
- Better plan - By being better connected to the latest tax rules, you’ll be better able to assess risk, limitations and liabilities. And, take advantage of opportunities and possibilities.
- Better flex - By being connected to all arms of the organisation you can be more agile and better able to make decisions.
- Better know - By being connected to all your data and information, you can integrate your tax data to spot eliminate risk.
- Better grow - By being connected to all your stakeholders, so they’re better able to find ways to reduce costs and drive growth.
How a Connected Tax function could look
An example of what a Connected Tax function may involve:
- Evolving and improving your technology software and infrastructure
- A more intelligent and efficient use of your data systems
- Upskilling your existing talent into tech areas
- Recognising the importance of your tax function in overall enterprise transformation
However, whatever it involves for your business EY Tax will have the resources, the knowledge and the smart tools to help you get there.