How tax data analytics is changing the way organisations handle tax
The pandemic has accelerated the rate of technological adoption. Where businesses were slowly making their way towards tax data analytics and other cloud-based systems, we are now seeing more organisations rapidly incorporate business intelligence and analytics into their infrastructure to adjust to the new status quo.
However, with new technology comes new opportunities. Corporate tax was seen as a massive burden on organisations, not in terms of expenses, but time and effort required to comply with the law. But analytics systems are changing the way businesses are doing tax administration and compliance.
What can organisations do with tax data analytics?
Tax data analytics gathers data from different sources to answer questions about complex issues. This information comes from different sources like presentations, reports and returns filings. This level of insight provides the accountants or members of the tax department with a deeper understanding of an organisation’s tax status, something they did not have before, and it is opening up a host of new opportunities.
Visualisation of data analysis
Tax data analytics can perform several operations that make tax data easier to understand. Some analytics platforms can present data findings in a visual format. The visualisation of data is useful because it makes it so much easier to assess data findings. Analysts can reach conclusions faster, but even better, visual findings can be used to explore the connection between different variables in more detail, something that was not seen with other tax compliance technologies. This means tax data analysts can explore different scenarios. For example, analysts can change assumptions on a variable to discover how the changes affect different scenarios. Furthermore, the visualisation of data makes it easier to find gaps in the information, leading to a more comprehensive analysis.
Streamlining tax data infrastructure
One factor that definitely hurt the efficiency of tax data is the manner data was stored. It is quite difficult to conduct a thorough analysis when valuable data is stored in different formats. Tax data analytics have helped organisations transform their functions for the better. The additional data has transformed tax regulation into a more insights-driven function. Soon, it becomes a question of “What do I need to know” rather than “What do I need to do”, which changes the way tax functions will be handled in th future.
Expand analysis functions
Tax data analytics opens up several new opportunities to organisations. For example, tax analysts can now understand the key areas that drive taxation, something which may have been hard to do with facts and figures hidden in different sources. Furthermore, the additional level of analysis reveals deeper, more insightful trends that help predict earnings, sales and tax impact.
The organisation will be better placed to predict future trends (especially with the use of predictive analytics), making it much easier to anticipate certain functions like the buying and selling of assets. It is even possible to preview tax items and identify potential errors. With tax data analytics, it becomes much easier to expand the range of data sources to include unstructured data and integrate them meaningfully into the analysis, something that would have been impossible without tax data analytics.
The technical functions of tax analytics are changing the way organisations perceive tax obligation, paving the way for a new era of analysis and planning when it comes to compliance. For example, businesses can compare taxes paid against different variables like book income over a specified time, allowing for a deeper level of analysis that was not possible before. In that regard, tax compliance is no longer an obligation to be met but an opportunity to identify growing trends within the business. With the prospect of growing opportunities, perceptions around tax compliance will change over time.
Implementing data analytics
Tax data analytics platforms are changing the way organisations are seeing tax administration and compliance. However, to be used effectively, it must be integrated at all stages of data processing to be truly effective. To execute such a task, organisations need to work with an analytics specialist that can incorporate the technology correctly into the network infrastructure.
Selerity is poised to help organisations install tax analytics into their systems. Our knowledge of analytics platforms can help organisations install, administer and host analytics software properly to ensure that tax data analytics platforms are properly incorporated into your data infrastructure.