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3 Tips for Fully Leveraging Your Tax Technology Stack

3 Tips for Fully Leveraging Your Tax Technology Stack

Ryan Lynch
Managing Director & CTIO
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Ryan Lynch, Managing Director and Chief Technology & Information Officer

30-Second Summary:

  • The ability to communicate data insights through advanced reports requires integration of tax technologies that create meaningful outputs for easy end-user interaction and understanding
  • There are endless solutions to choose from, and no one-size-fits-all solution
  • In order to deploy solutions that fully maximize your tax insights, you must follow three key steps: building a core tax technology strategy, execute that strategy, and regularly revisit and analyze your tax technology approach

New regulations, and incorporating those new regulations into existing calculations, put a strain on resources, particularly when accounting for changes and/or explaining the impacts to management. The ability to adapt models, draw comparisons, perform analytics, and effectively communicate data insights through advanced reports like visualizations have quickly shifted from a “nice to have” to a “have to have.” This requires integration of tax software, data management, BI tools and even collaboration technologies like SharePoint in ways that effectively transform raw data, adapt for changes to calculations and create meaningful outputs for easy end-user interaction and understanding.

Despite each day occasionally feeling a little like “Groundhog Day” these days, it is still a fast-changing world out there in the tax and technology space. When new laws are passed, it is immediately expected that we not only conceptually understand the changes, but also incorporate them into our calculations and explain the ‘why’ when others, after reviewing resulting impacts, ask tough questions. Our need to be agile and to analyze data is more important than ever. Leveraging tax technology and enterprise-level applications in harmony can ease the burden of living in the unpredictable, ever-changing environment we are in, by allowing your people and processes to be dynamic and efficient.

There are endless solutions to choose from – from current market leaders to emerging powerhouses. So, how do you fully deploy solutions that will maximize tax insights and raise your department’s abilities?

Tip 1: Build a Core Tax Technology Strategy

Building a tax technology strategy that delivers desired results requires taking a big-picture view of your tax department’s specific needs and processes. The technology that you implement must meet various needs; technology continues to advance and having access to several options that you can cross-integrate will help you leverage an optimal solution.

First, examine and document your existing tax technology stack. We typically look at it in four different buckets:

  1. Tax and Financial Software: ONESOURCE, Corptax, Vertex, Avalara, SAP, Oracle, HFM, etc.
  2. Data management and BI applications: Alteryx, Tableau, PowerBI, Qlik, etc.
  3. Other Automation Technologies: RPA, Artificial Intelligence, Machine learning, etc.
  4. Collaboration platforms: management of workflows, documents, checklists, etc.

Then, identify where your business and tax department are going in the next three years. Think about challenges that are presented to the department today and ones that will arise based on where you are going. Evaluate your current technology stack against those existing challenges and future needs, asking yourself the following questions:

  • Are the solutions we currently have in place updated and used completely?
  • Are there applications licensed at the enterprise level I could be using to address some of my challenges?
  • Do I have reliance on people outside the tax department for technologies I use and is that ok?
  • Do I have gaps in my tax technology stack significant enough that I would either consider acquiring a new product to incorporate or replace one I have with one that has different functionality?
  • If I am getting more technology and/or planning to advance technology usage significantly into the department, do I need/want technology focused personnel?
  • This challenge can be solved by two different applications already in my tax tech stack. Which should I use?
  • Do the core products I already use have products in other buckets that they integrate with best?
  • Why is it still hard for us to do ‘X’ piece of this process even though I have ‘Y’ implemented?

Tip 2: Execute Your Tax Technology Strategy

Once you’ve established your core tax technology strategy and answered the questions above, you must execute it – and that starts by selecting the most important challenges and needs as well as evaluating the technology (or technologies) that best handle them.

Look at each identified item as part of a larger process when assessing key pain points. Steps of your process may require different technology solutions to deliver the best overall solution. The sequencing and mechanics of technology integration will vary based on your specific needs. The key is to determine which solution will deliver the most value for you overall, and then communicate that effectively to your organization’s decision-makers.

Data is often a key consideration when addressing a challenging tax process and it frequently causes some of the problems faced. There are difficulties gathering it and bringing it all together in a meaningful way, as well as verifying its accuracy. There can also be complications working data through calculations for different time periods, various scenarios, updated logic, and increased volume. There are users who want information at varying degrees of detail throughout the process and they have different preferred mediums for viewing it. There is also the requirement to have detailed understanding and quality control of calculations being performed.

Sometimes, it is helpful to break apart the process into three primary categories: (1) Data gathering and organizing, (2) Data Analysis, Prep and Calc and (3) Reporting and Outputs. This is not to say that you would identify one tool to address each, or all, of the three areas – a complex process could warrant multiple tools in any or all of the three areas or one tool may crossover those areas – we just find it helpful because each of these three areas often present unique challenges.

Other key considerations when improving tax processes through technology include workflows, resource requirements/constraints, functionality of applications, and quality control.

More often than not, when looking at a tax process from start to finish, the best answer (from a pure technology/process point of view) will require multiple applications to be used. That said, there truly are no predisposed characteristics of the ‘best’ solution: it is also not always the simplest or most complex to implement, nor the most expensive or cheapest. Each process will be unique, and each solution should be based on your specific situation.

Whichever solution you decide to implement must be done so intelligently. You must understand the requirements, challenges, and potential downfalls of the answer you embrace and ensure that it aligns with your overall tax technology strategy.

Tip 3: Regularly Revisit and Analyze Your Tax Technology Approach

There is no such thing as a one-size-fits-all tax technology solution for the long-term; tax department needs and technology change too quickly. The convergence of updated tax regulations and technological capabilities with your individual facts and circumstances will determine how your organization moves forward with a tax technology approach.

As such, you will need to regularly revisit and analyze your approach as things change. Request, and respond to, feedback from your team on a continual basis; the tax team on the front lines is well equipped to steer you in the right direction in real time. Engage, on the topic of tax technology, with service and software providers as well as industry peers, through formal and informal channels; understanding what is available in the marketplace and what others are doing is valuable information to have at your disposal. Remember that the tax and technology worlds are always changing, even while many other things seem the same as yesterday. Periodic review of your overall tax technology approach ensures that it remains aligned with business needs and the scope of the corporate tax department’s functions. As further changes in business needs transpire, subsequent adjustments to the overall game plan may be necessary to effectively support the business.

For more information about how to build out or fully leverage your tax technology stack, please contact me at rlynch@gtmtax.com.

About GTM’s Tax Automation Services (TAS)
GTM’s industry-leading team are experts in implementing, enhancing, and maintaining tax technology for large, multinational organizations. We take a flexible, individualized approach, working side-by-side with you to address your specific challenges and implement value-added solutions in all tax functional areas. Our tax automation services focus on Corporate Tax Software Implementation & Enhancements; Data Management & Business Intelligence; Tax Collaboration Technologies; and Process Assessment & Automation.

About The Author(s)

Ryan Lynch
Managing Director & CTIO
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As Chief Technology & Information Officer (CTIO) for GTM, Ryan provides strategic technology leadership across the entire organization by advancing continuous innovation in GTM’s services...