Data and digitalization are disrupting today’s tax world. This is noticeable by the implementation and/or increased usage of technologies by tax authorities and companies in its own organization. If the basis is correct, then not only is tax reporting significantly improved, but tax risks are also minimized and compliance processes automated. These efficiency and effectiveness gains maximize the value of the tax function to the business.
To benefit from data and digitalization it is critical that tax requirements are correctly set up in your ERP systems and in other tax technology components, as these are at the heart of all business operations with a tax impact.
What are the key challenges facing organizations?
Based on our experience, we see the following key challenges for businesses:
- With introduction of new technologies in processes that have a tax impact, the tax department is not involved at the early stage of a project. As a result, requirements related to envisaged tax processes may not be taken into account or tax business requirements are not translated correctly into system requirements. This can be catastrophic for organizations setting up a new ERP system or upgrading an existing one.
- There is insufficient awareness of what the different technologies are capable of, and therefore it is not leveraged enough in tax processes.
- Technology systems are set up in such a way that they lack the flexibility to deal with fluctuating tax demand, changing business models, or are not set up properly due to the complexity of business operations, for instance related to indirect tax and transfer price determination.
- There are many tax technology vendors on the market, but it is difficult to decide which software is the best fit for the envisaged tax process.
How can we help?
In order to respond to changes in your internal and external business environment and meet your digitalization and compliance requirements, we can help you move from a business understanding to a tax technology strategy, roadmap, and end-to-end process that brings all dimensions together. Aside from developing an envisaged process design to ensure consistent, cost-effective, and transparent tax compliance, we have hands-on experience with the implementation of these requirements in your business processes and ERP configuration.
As part of the ERP Tax Sensitization value proposition, we can assist with the following to reimaging your tax function:
- Support the tax function within the end-to-end process of implementation or upgrading of an ERP system / other third party tax technology, including project management support, IT set-up (testing) and design.
- Tax control framework automation (please refer to the Process & Controls value proposition for the design of a tax control framework).
- Define, prepare, and set up tax code determination, intercompany pricing and costing, and master data.
- Tax reporting and insights (please refer to the Tax Compliance value proposition) through data & analytics
- Review the current state of tax configurations and relevant master data.
- Selection of third party tax technology applications that integrate into your existing ERP system or assist with the selection of an ERP system.
If you would like to know more about ERP Tax Sensitization strategy 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.