Global tax technology service provider: An answer to your despairs

Global tax technology service provider An answer to your despairs

In the last couple of years, the digitization of tax functions has rapidly grown across the globe. More and more companies are looking at tax technology as the future. Even tax authorities have now endorsed the benefits of technology in tax and are radically making a shift to using technology in their day-to-day activities.

With this seismic shift in place, organizations are adopting technology in tax more than ever before. Technology in tax has become an irreplaceable value driver. This is the reason that businesses are recognizing the importance of developing and implementing a digital tax strategy. With technology in place, certain challenges also creep in.

Challenges of using multiple software in different regions

Multinational corporates having a business presence in various countries across continents often face a dilemma of consolidation of their taxation process. Different countries have different tax laws and different reporting requirements. Further, tax teams across the globe follow differing standard operating procedures which sometimes result in skewed reporting on an organizational level. Therefore, usually, the Global companies with tax functions located in several countries face the following challenges:

  • Multiple ERP systems being used in various countries do not allow any global entity to consolidate a holistic vision for its taxation system. A Global tax leader has to look at multiple ERP reports in order to make decisions. This is not only time consuming but also requires the tax leaders to be equipped with ERP knowledge for multiple systems, which is rare.
  • Data storage is another challenge that comes with a disintegrated approach towards tax technology. Country by Country data is stored on different systems and can be accessed through different methods of logging in. This is time-intensive and utterly chaotic, especially when data needs to be retrieved. Teams spend a large amount of time on the retrieval of data whenever required.
  • Tax laws in each country are different. Different policies, reporting guidelines are enough for any business leader to get overwhelmed. As if this is not enough, different tax technology service providers can make things difficult for tax leaders and global tax teams.
  • Assessments and Audits are a routine part of tax functions in any country. There are different aspects of assessments and audits from a taxpayer’s perspective, which needs to be taken care of. This includes a suo moto health check-up to determine any tax exposures before an assessment or audit, retrieving data on receipt of the notice, arranging data in an understandable format, submitting data to authorities. A large portion of this task can be eased through the use of technology.
  • With different types of technologies being used across the countries, the finance and tax function needs to be trained accordingly. Different pieces of training for different systems not only consume more time and incurs more cost, but results in the teams being perplexed as to how to use a specific feature in specific software.

What is the solution?

Using technology is not an option anymore. Moreover, the benefits of technology are far too much to skip using it. Therefore, the question that arises is what can be done to use the technology in an efficient manner wherein all the benefits of technology are realized and the challenges of using multiple solutions can be resolved.

One option that appears probable is using a global tax technology solution or engaging with a tax technology partner who serves the organizations in all or most regions. This can aid the organizations in the following manner:

  • A standard solution with similar features to use in various regions and different teams. The solution can be customized basis different tax regimes around the world; however, have similar aspects in terms of functionalities and reports. This can reduce a lot of time and cost for corporates by deriving efficiencies in training, reporting, analyzing and evaluating.
  • A common system also permits leaders across the globe to have a common dashboard where all necessary information can be reviewed and catch the eye of functional heads. This makes the job a little less tedious as against viewing different systems for different countries or worse yet speaking to regional heads.
  • Global companies are often required to report ongoing litigations across the globe at various platforms. A common tax technology solution could help leaders in managing litigations across the world sitting at any one location.
  • With tax administrations from various countries sharing data within themselves, it becomes imperative for the data to tie up internally as well. In case of any discord between the data, expensive cross-border litigation may follow.

The above are key benefits of using a centralized or a common tax technology service provider in various regions. The above benefits are only illustrative in nature; businesses may actually derive varied and higher benefits if they use a standard centralized technology service provider in tax. Irrespective of insourcing or outsourcing a technology product, it is always better to have one team to revert to all queries and requests.

Several companies are assessing their need to automate tax functions. This assessment needs to be accurate as the investment involved in tax technology products is massive and cannot be incurred again and again. Thus, the Companies need to conduct these assessments prudently and identify a solution that can work across borders.

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