Keeping up with change: The increasing role of technology in VAT determination
Bespoke tax technology is no longer a ‘nice to have’ for multinational businesses; instead, it has become a non-negotiable for tax teams tasked with delivering optimum performance in areas such as accuracy, data visibility and efficiency.
Three factors have combined to place irresistible pressure on tax professionals – once accustomed to using desktop spreadsheets to manage VAT determination, filing and reporting processes – to future-proof tax processes with best-in-class technology.
Do you recognise any of the following challenges?
1) Manual burdens
As skilled and experienced as your team may be, if they are equipped with only Excel and other basic systems, don’t be surprised when they can’t consolidate, analyse, determine, manipulate and prepare tax data for thousands of transactions across hundreds of regimes around the world. And you certainly can’t expect them to do it quickly, efficiently and without error.
2) Internal challenges
It’s not all about the way a business manages VAT. Even putting the spreadsheets to one side, other factors such as budget being used on expensive VAT processes, unpredictable changes being made to filing requirements by different jurisdictions and the potential loss of local tax knowledge as firms take a more centralised approach all weigh heavily on finance leaders
3) Global focus on VAT accuracy
Enhanced scrutiny of VAT determination and reporting processes has become common in recent years – and this is set to continue. Regulatory bodies require proof and visibility of VAT compliance at every step more than ever before; and manual processes are simply unable to provide this. Some businesses have asked their IT teams to add control, workflow and sign-off functionality to their ERP but even this cannot deliver the precision and traceability expected in the modern world.
How can your business overcome these challenges and achieve tax perfection?
Bespoke tax solutions have become the gold standard for large businesses looking to extract data from one or more ERP systems and consolidate it on a transactional level to provide a single view of VAT.
All the data can be automatically attributed to the relevant legal entity and pre-defined reports are run to ensure full visibility; as well as providing an opportunity to identify any errors that slip through the net and allowing tax professionals to correct them in the source system.
Tax solutions are designed to automatically update with all the latest rates, rules, codes and more from every tax jurisdiction around the world, relieving tax teams of laborious, time-consuming and error-prone manual updates to the ERP. A modern tax solution will also provide extensive reporting and data analysis functionality.
As more of the world’s major organisations invest in state-of-the-art tax technology, the question is: Can your business afford to be left behind?