The tax function is one of the largest consumers of financial data within a business, and that information can be maintained within the enterprise resource planning system. By gathering information at the time of a transaction, you have the ability to develop a stronger foundation for streamlined tax information now and into the future.
However, tax needs a seat at the table along with the finance organization when planning and implementing ERP solutions to ultimately help enhance compliance and risk mitigation efforts, reduce costs and complexity and help retain top talent.
“If we think about tax transformation, we need data at a much more granular level than we are getting today,” said Danielle Gonzalez, RSM partner and member of the firm’s tax technology team.
Organizations need to concentrate on bridging the communication gap between tax and other functions and enhancing operations by creating the opportunity to leverage consistent data across the business. The business still should focus on the same core processes, such as order-to-cash and procure-to-pay, but a tax lens is added to understand the impact from that perspective.
“By making the shift to ensure tax information is available during normal business processes, it will benefit the entire company,” commented Jennifer Snow, RSM senior manager. “It will allow the company to work cross-functionally. This is how you can transform not just tax, but financial reporting as a whole.”
To bring essential insights to the forefront, tax needs to be inserted in the ERP implementation approach in the initial functional business requirements. This determines where tax can be improved from the outset of the ERP project, identifying what outputs are necessary after go-live.
To set that desired foundation, the information tax requires must be captured as a part of organic business transactions in the ERP system. It also needs to be complete through the ERP platform to report cross-functionality and consistent for effective planning and ad hoc reporting.
With the right processes in place after go-live, the tax function can reduce the inputs from multiple systems and act as a true tax department instead of a data input department. Tax can become more agile, advance its approach from hindsight to foresight and contribute to the business as more of a strategic partner.