Why accurate master data is the key to reaping the rewards of tax technology
Data has changed the way we live. For better or worse, every decision we make is now fed back to a database in milliseconds. It’s certainly allowed us to live, work and communicate faster than ever before.
And with so many aspects of our lives now automated, we enjoy greater accuracy and reliability in everything we do. When was the last time you lost your boarding pass for a flight, visited a bank to check your account balance or relied on a paper receipt?
The many thousands of aspects of modern life that are automated rely on accurate master data to work, so if your business is to maximise the potential of the technology available to you, you’ll need to feed it with quality data.
What are the benefits of great master data?
If you can ensure 100% accuracy (or as close to 100% as possible) within the data entering your tax solution, you’ll enjoy a variety of competitive advantages, including:
- A guarantee of compliance
This one is simple. If you input accurate data into your automated solution, it’s guaranteed to produce results that are fully compliant with relevant regulations.
In the case of tax, this means following the local rules and rates set by particular countries – or even specific states or districts.
It also ensures your business will avoid the potentially huge penalties handed out for acts of non-compliance. In 2017, the UK’s largest companies were fined £59 million for failing to adhere to tax regulations; a stark reminder of the scale of the punishments available to authorities.
- Reduced time and cost commitments
Using a sophisticated automated tax solution will drive down the amount of time required to complete your tax duties, saving you not only many hours, but also the considerable financial outlay required to employ people to manually complete tax processes.
However, if your master data is poor, you could be giving up many of those savings by creating a huge pool of erroneous transactions that your team have to investigate and correct. There’s no substitute for getting it right first time – and great data is the key.
- Informed decision making
Accurate data that leads to efficient processes that deliver optimum results gives businesses a clear picture of where they stand when it comes to tax. You can use these results to make informed decisions based on statistics that will help you to shape the future of your organisation.
Technology empowers Tax Managers and Financial Directors to develop bespoke and highly-effective strategies that lead to long-term success.
- Facilitating future growth
Does your business believe that determining, calculating and paying tax through the limited functionality available within your ERP (or even manually by employing a team of finance professionals) is sustainable? Well, it might just about do the job today, but it’s not a long-term solution.
The sticking plaster you’ve put over your tax affairs to manage tens of thousands of transactions a year will be ripped away as you grow to complete hundreds of thousands or even millions of sales and purchases. Technology powered by accurate data will provide the scalability you need to complete accurate and compliant tax reporting in large volumes.
- Avoiding financial penalties
It’s not only operational efficiencies that make tax technology a financial no-brainer. You should also consider the way a proven tax determination solution will ensure your business pays the right amount of tax in every single transaction; eliminating the possibility of overpaying or underpaying tax.
The drawbacks of overpaying are clear, especially in these difficult financial times. But the financial impact of underpaying cannot be overstated. Should a national government opt to audit your accounts and an underpayment is uncovered, you could face a substantial financial penalty.
If you require any support in implementing an automated tax solution to efficiently process your data and deliver fully compliant results, get in touch with us today.