Video

How tax technology can help boards of directors

Real-time data facilitates decision-making

Sep 19, 2022

Key takeaways

Boards can enhance organizational decision-making processes by using real-time tax data.

Platforms that provide an organization with real-time tax data can strengthen the collaboration with its tax provider.

Boards should be asking about the value they can get from tax data and the security of that data.

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Tax technology PartnerSight
Digital evolution Business tax CorporateSight FamilySight

Tax technology is not something that most boards, not even their audit committees, spend much time thinking about. That's a shame, because in this era of digital transformation, the technology you use to prepare and plan for your taxes can be leveraged in important areas, such as mergers and acquisitions.

Brad Collins, a principal at RSM US LLP, sat down with Directors & Boards to discuss how boards can get a better handle on, and optimize, the tax technology their organizations use.

Below is a transcript of the discussion; the conversation has been edited for clarity and length.

D&B: Brad, where do traditional tax providers fit into this technology discussion, and where did they fit in in the past?

Collins: In the past, quite honestly, it was an afterthought. If you think about corporate boards or even your individual taxes, you're thinking about that after it has been completed. You're taking that in the traditional way—that shoebox, that data, that information—and you're handing it over. But it's afterward.

When we think about going forward and how we can transform things, being able to have that data at your fingertips, having a continuous loop of information, and being able to leverage that between your corporate board and your tax provider consultant is really what you should be looking for.

D&B: Let's dig into that a little bit. What does technology—tax technology—and the digital transformation of that really mean for a board? It seems like that's something they should really be on top of.

Collins: It is. From a tax technology perspective and thinking about digital transformation, they should be asking themselves, what are the tax effects of their decisions? How can they have better access to that information? How does that process work today?

If you start to look into it, the process can be quite antiquated. It's not a real-time process, and usually tax providers are not providing that information to their clients in real time.

Technologically speaking, the way I like to refer to it is “locked up in a box.” Ultimately, it’s how I came to this position leading our tax technology transformation at RSM. I wanted that experience to be different for my clients.

It was always hard for me when they would ask, “I need my data to make a very important decision—can I have it right now?” And they just assumed that I could provide that to them. Traditionally, the answer was no, I could not. I would have to go back, extract the data from our systems, replicate it for them, and oftentimes it wasn't as fast as they would have liked in order to make a very important decision, whether it be M&A or even from a personal standpoint.

Being able to have that data at your fingertips, having a continuous loop of information, and being able to leverage that between your corporate board and your tax provider consultant is really what you should be looking for.
Brad Collins, Principal, RSM US LLP

D&B: So, you're basically building out a suite of products that allow a company and a board to understand where they stand taxwise in the moment and do some scenario planning from that?

Collins: You hit the nail on the head. That was at the center of what we've been doing here at RSM for the last several years. Are we preparing for our clients’ digital transformation as part of our own as well? We wanted to think about tax technology from a future-state standpoint.

We have built platforms. It's our suite of “sights.” We have PartnerSight, which is in the hedge fund and private equity arena; CorporateSight, which is in the large corporate arena; and then FamilySight, which focuses on high net worth individuals and family offices.

Collectively, the goal of those platforms is to be able to provide data to our clients in real time so they can make decisions and we can help them and consult with them in real time based upon that. They are very collaborative platforms and, in turn, represent the collaborative nature of our relationship with our clients.

That, to me, is what a corporate board or any board should be thinking about: What are the implications and what is the ability to access our data? How can we be more efficient, be more effective, and have as much information at our fingertips at any given time?

D&B: Any final thoughts on the digital transformation of tax technology?

Collins: If you're sitting on a corporate board and you're making those decisions, it really would be to ask those questions of your service provider: Where is my data set? Is it secure? Is it SOC 2-certified?

There are questions that you can ask yourself that really get to the heart of, where does my data sit, and if I needed to access it today in order to make a decision based upon the tax-effective nature of that data, how would I do that? That's what you should be asking your service provider—at any moment to understand what that is, make better decisions and drive value for your organization across the board.

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