The role of technology in taxation
Taxation is an area that is always going to require highly-skilled employees to carry out difficult tasks.
Technology has the potential to improve and refine the quality of many of the tax processes day-to-day, as the sector looks to keep pace with other areas of finance that have embraced technological change.
With research by PwC finding that the tax burden for Britain's largest retailers has increased by 65 per cent since 2005, putting in place an efficient system should be viewed as a vital part of a business' tax strategy.
The pressure to meet industry demands and adhere to regulation means tax departments need to be producing financial data that is accurate beyond any shadow of doubt.
Concerns about whether companies are making sufficient efforts to manage the ETR (Effective Tax Rate) or unnecessarily overpaying tax out of its earned profit are common tax-related questions.
According to Longview, a corporate tax software provider, spreadsheet heavy environments pose significant risks, as a "single keystroke error can cause serious financial and reputational damage".
In order to deal with the structural and process challenges faced in the 21st century, technology has to be relied upon. Working with multiple entities, currencies, tax legislation and multiple levels of consolidation can lead to inconsistencies and errors unless properly managed.
The company pointed out that without a centralised system, the duplication of work, data integrity issues and loss of transparency will be areas of concern. Moreover, technology eliminates the need for so much manual gathering and validating data - a time-consuming and insufficient system.
"Organisations spend a substantial amount of time, resources and ingenuity to overcome these challenges every reporting period, but they still lack visibility, control and confidence in their data," Longview stated.
By putting a robust tax provisioning and reporting solution in place, companies can deal with these issues before they become a big problem and make sure all information being created is common, consistent and centralised.