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How to Speed Up Tax Data Preparation for 5471 Schedule M and Sales & Use Tax Compliance

May 18, 2017

How to Speed Up Tax Data Preparation for 5471 Schedule M and Sales & Use Tax Compliance

Ryan Lynch, Managing Director, Tax Automation Services & Jim Ford, Managing Director, SALT Sales & Use Tax Compliance

Whether custom-built, developed in-house, or purchased, tax data management solutions should be flexible, scalable, and able to meet various needs regarding internal calculations. This includes provision, compliance, and sales and use tax. The end game is adding strategic value to your tax function, while improving the work life of your team simultaneously — meaning, relieve the menace of data mining and reallocate the time previously spent on reconciling data to the value-added functions of analysis and continuous process improvement.

Think about the burden lifted from your tax team by speeding up the data preparation and calculations for complex tax processes:

tax data management challenges


In this blog, we cover automating data assembly for 5471 Schedule M and Sales & Use Tax Compliance. We provide practical examples of what happens when you can quickly manipulate source data into useable formats and the steps that can be automated.

Use Case #1: 5471 Schedule M Data Preparation

The 5471 Schedule M preparation process is a time-consuming exercise, with heavy reliance on manual intervention, Access databases, or complex Excel models to manage the data. It requires significant maintenance year over year and the intrinsic knowledge of the key person responsible for the calculation. The review process is difficult due to the complexity of the data, and the inherent lack of transparency into the end-to-end process.

A tax data management tool, such as GTMpower, can help accelerate the process significantly. Use technology to create mappings that manipulate source data into usable formats and automate the following steps of the process:

  • Identifying and filtering of relevant entities and transactions
  • Executing calculations for re-classes
  • Performing eliminations and currency translation
  • Incorporating relevant loan data
  • Mapping to the income tax compliance software format
  • Transparent reports and meaningful analytics

The benefits? Mapping and automating will help your team achieve significantly earlier tax return filings. You will gain process efficiencies from the technology-driven approach, and gain time for analytics and validations that will renew their confidence in the process. Comprehensive reporting will allow your team to use data in ways never possible before. Further, implementing the right technology will remove the burden of dependency on the one individual responsible for the complex and fragile Excel model or Access database previously used.

Use Case #2: Sales & Use Tax Compliance Data Assembly

Sales & Use Tax (SUT) Compliance is the second use case we will cover. SUT is yet another process that steals too much time from tax teams – gathering, manipulating and validating data. The added complexity is that source data for the SUT compliance process may be coming from many dissimilar sources, and is often missing required information. Teams waste time gathering data from disparate systems – then more time assembling and transforming that data, usually in Excel, before loading into returns software or uploading to the states. You’ll then need to repeat this twelve times a year, as sales tax compliance is a monthly process.

Implementing the right data management solution can allow you to create and apply mappings that automatically calculate tax, validated rates, and create fixed width imports for your indirect tax compliance software. Ultimately, this will streamline the process of source data to tax compliance software — so that monthly, it requires minutes rather than hours or days.

For example, one of our clients was burdened with extracting and manipulating data from 28 ERP instances internally. Two people on the tax team spent four hours (total of eight) hours every month just to get data into their sales tax software. Now that they’re using GTMpower, that process takes about 30 minutes total to push the button, review the report, and make any corrections. They’ve cleverly reapplied this reclaimed time to analyzing any problems that arise, as opposed to manipulating the data.

Making the Right Tax Data Decisions

See how the right data management solution helped one company automate various tax processes by cutting prep time up to 80%, and allowed them to create meaningful analytics for strategic tax planning.

Feel free to reach out to us at or with any questions, or visit our Data Management and Automation page for more information.

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