Although traditional business models regard tax department processes as a function of compliance, the implications of your tax performance can have a ripple effect that spreads throughout your organization. Poor management of tax processes can disrupt workflows in other aspects of corporate finance, while data entry errors and a failure to leverage data for insights can increase operational costs. Additionally, you may be overlooking data-driven insights that would enable your organization to become a more efficient machine.
Accurate, efficient tax department performance can improve reporting, reduce fines and other costs resulting from accounting errors, improve business transparency, and provide a source of business data that drives analytics for both the tax department and the business as a whole. Tax activities often get treated as a necessary evil for organizations, but with the right software solution in place, tax performance can become an asset to drive innovation and improve your bottom line.
Here’s a look at specific ways tax departments can achieve these goals.
1. Eliminate Error-Prone Data Entry
According to Inc., businesses that choose to complete tax documents manually can easily face a tax return error rate of 20 percent. And the costs often far exceed the scale of what seems like a simple accounting error, with a single mistake potentially bringing millions of dollars of damages for a corporation.
With software solutions capable of automating these tasks, data entry is never a good use of human capital—even when it comes to your entry-level employees. But the downsides of manual entry aren’t limited to resource management: While automation frees up your workforce to prioritize other tasks, it also reduces the number of errors cropping up in your data.
Enterprise tax software provides automation capabilities that alleviate manual data entry needs. This reduces the time and resources required for corporate tax preparation. It also gives tax professionals more time in their day for validating and analyzing the data as a strategic member of their organization.
Meanwhile, an automation solution can also generate new performance data to power enhanced tax prep operations and even support improved business analytics. This can help support the strategy side of business operations, affecting your tax department and the business as a whole.
2. Facilitate Collaboration for the Whole Office of the CFO
Automated corporate tax reporting tools make it easier for tax professionals to collaborate on the collection and consolidation of tax data. Improved access to data, as well as transparency about data sources, provides better clarity into a company’s tax situation, while also facilitating better communication among tax professionals.
But tax data shouldn’t exist in a silo anymore. Given the way this data can be utilized across financial, technological, sales, and marketing verticals in a business, this collaboration can have a significant impact on a number of business outcomes.
Your business can support this collaboration by choosing a tax solution that offers easy-to-read reports. Through better creation and management of tax information, an entire organization reaps the benefits of improved communication and interdepartmental synergy.
Easier-to-read and more reliable data enables easier sharing of insights and smoother, streamlined communication between tax professionals and other departments.
3. Compile and Deliver Data-Driven Performance Data
Tax software solutions create great value to enhance a company’s understanding of its own business strategy. Tax data analytics and data reporting can be used to guide and support business decision-making, and they can help analyze variances in performance over time.
Your business should use tax software as a strategy tool that benefits the company’s collective intelligence. Data visualization through Longview’s tax platform, for example, makes it easy to view and understand complex tax insights unavailable through traditional tax preparation methods.
4. Solve Complex Data Challenges for Finance and Tax Teams
Faster data reporting, data entry, report generation, and other tax preparation processes will accelerate the close for your organization, making timely tax completion a top business priority.
This can’t be accomplished through traditional accounting methods that lean on antiquated tax accounting practices. Instead, your business should approach tax activities and tax software solutions as an investment in more efficient operations and better access to data-driven insights.
The era of choosing between speed and accuracy in tax preparation is over. Thanks to automation and other software tax preparation tools, businesses no longer have to make this sacrifice.