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Automate Your State-by-State Provision Reporting With Longview Tax

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insightsoftware is a global provider of reporting, analytics, and performance management solutions, empowering organizations to unlock business data and transform the way finance and data teams operate.

23 03 Blog Automateyourstatebystateprovision Website

The shifting landscape of tax reporting is more complex than ever. As a European organization with US operations, or a US-based company that operates in multiple states, you are now facing an increasing demand for state-by-state provision reporting, rather than the traditional blended rate method.

While state-by-state provisions allow for greater visibility into your liability and risk areas, this approach comes with its own challenges. Data requirements are expanding for state-by-state calculations including new apportionment considerations, tax rates, and regional modifications. To address these changes, your tax team can easily get stuck actioning menial data verification tasks, rather than offering important analysis and insights.

If the stresses of shifting tax laws and business needs were not enough, provision professionals often face intense periods of time crunch. The majority of work is done just days after year-end and it must be completed quickly and accurately, before facing scrutiny within the organization and from external financial auditors.

Preparation is key if you want your processes to remain efficient during the years of regulation change ahead. By leveraging technology that automates tax data collection and processing, your team can produce more accurate reports, reduce risk, and free up time to focus on more strategic initiatives.

Flexible, Easy-to-Implement Software When You Need It Most

Whether it’s because of changes in tax law or changes in the actual footprint of the business, what you need today may change tomorrow. Your tools and processes need to be agile enough to adequately address changes in the underlying business or environment.

The first question you should ask yourself when evaluating your provision process is: are my tax processes flexible enough to handle the inevitable curveballs coming my way? To find the answer, start by anticipating potential changes and how your team might respond.

If you acquired a new entity, how long would it take to incorporate that entity into your tax process? Would it take a few hours, or a few days? How audible is the groan from your team when they hear about state law changes that will affect their work? How long until you would feel comfortable reporting against the new requirements?

If the answers are “you could hear the groan from the next room” and “days of work, not hours”, then you need a more flexible tax solution that can allow your team’s output to scale alongside changing business needs.

Longview Tax offers simple, flexible functionality:

  • Implement your tax software quickly with an out-of-the-box approach, or tailor your solution to your organization’s needs.
  • Generate custom reports based on key metrics and strategic goals for your company.
  • Integrate with Excel to retain tax agility while improving your day-to-day capabilities.
  • Automated tax data collection dramatically reduces your reliance on other teams.
  • Manage your software without support from IT thanks to an intuitive user interface.

In 2023, like many others, tax professionals are being asked to do more with less. Yet at the same time, the world is getting more complex. If this sound familiar to you, then you need to invest in more robust tax technology, like Longview, to free up your time and ensure your team is thriving, not just surviving, through future regulation changes.

The Implications of Automating Tax Management in an Era of Global Change

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Trusted Data for Connected Reporting

One of the most common mechanical challenges with tax provisioning is consolidation. How do you consolidate different calculations from different jurisdictions or different legal entities both quickly and accurately?

Keeping up with apportionment considerations, tax rates, and significant regional modifications through traditional spreadsheets means hundreds and even thousands of rows of data. Spreadsheets, though a very powerful tool, aren’t necessarily designed to do such work in an efficient, clean, repeatable, controlled manner. You’ll be clocking countless hours re-checking these spreadsheets to mitigate the risk of copy paste errors and inconsistencies. And once you are done, this static data instantly becomes out-of-date, opening the door to miscommunication and risk of error.

Provisioning is one of the most scrutinized corporate tax processes, due to its visibility in financial statements. To avoid mistakes at critical moments like when you’re under tight deadline, tax professionals should be proactive rather than reactive and invest in a robust tool now to get ahead of the risk.

Having a software that can optimize your tax processes through a streamlined and centralized system means that you can trust that the data is accurate and up to date. When you’re finally able to compare apples to apples across jurisdictions and business units, it becomes much easier to identify and understand your main rate drivers. This timely and comparative reporting is exactly what you need in order to see your group’s ETR much earlier on and take action if needed. With Longview Tax, you’ll be able to complete provisioning faster because data is presented in real-time, without needing to wait on data consolidation or processing.

Better Insights for Better Decisions

With a recession looming, decision-makers are placing greater importance on accurate financial analysis to inform business direction. It’s no longer good enough to extract data from the last filed tax return (often 4-6 quarters old) and manually enter it into static state tax provision spreadsheets. As EY states in a recent article:

“With guidance anticipated from the U.S. Treasury Department on several tax issues and open questions about future US and global tax policy, boards and audit committees must oversee their organizations’ responses to tax changes in real time. They need to closely monitor the tax environment to recognize both potential challenges and opportunities and to remain agile in the face of uncertainty.”

With Longview Tax’s dynamic, intelligent, and real-time consolidation you’ll experience higher productivity and have more time for strategic, value-added activities. It makes it easy to see where your business is likely to end up at financial close and your estimated cash tax obligations. This frees up your time to focus on more value-added activities, elevating the tax function from a cost centre to a strategic business partner.

To learn more about Longview Tax, ask for a free demo.

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See how companies are making tax a strategic function while cutting their close timing by 50% in their first year using Longview.