Tax Data and Analytics

While data analytics is not new and analytics  methodologies have been evolving since the mid 1950-s, the application of analytics in the world of tax is relatively new. For a long time, MS Excel has been the only tool used for the analysis of tax data. It is only in recent years that tax professionals have started collaborating with personnel with an analytical background and experience using more complex analytics tools.

Using data analytics, organisations can transform data into valuable insights. Tax Data Analytics enables businesses to delve into their tax data to gain factbased insights into the status of their tax liabilities and irregularities, identify opportunities to improve the efficiency, effectiveness, and harmony in business operations and tax processes, identify both tax and non-tax value adds such as missed KPIs, and uncover untapped opportunities and hidden risks. Early identification of untapped opprtunities and risks can result in financial returns and help the tax function become a key value-added resource at the heart of business decision-making. Additionally, intricate ERP environments and indirect tax procedures may be broken down, abnormalities in data can be quickly identified and remedied, and overall control over the indirect tax process can be strengthened.

Tax data, especially for larger organizations and MNEs, may contain a significant amount of noise. With the use of technology, important data can be highlighted above the din and noise and turned into a valuable resource. Organizations can easily build their own standardized databases and have access to streamlined analyses and  calculations for tax processes thanks to data wrangling and automation technologies that can be integrated with current ERP systems and workpapers. Further, automation technologies bring improved accuracy, efficiency, traceability, and version control; real-time updates are possible for deliverables, teams have a central location for analyses, and ahead-of-schedule filing may be possible due to accelerated timelines.

The tax function of the future is one which uses data analytics to provide greater value to the business, not just by dealing with tax itself, but by providing broader non-tax insights.