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Tax provision and compliance- are your processes improving?
This is the year for multinationals to evaluate processes and change their tax provision close and compliance processes for good. Leveraging provision data for compliance purposes is rapidly becoming a 'best practice,' so it is time for companies to document issues and challenges now. Taxand USA discusses how companies can start to prepare for the year end and provides solutions to the most common problems.
Problem 1: Available time
Tax professionals lack time to implement real change which causes problems to keep arising. Corporations should implement a development plan with a dedicated coordinator and hold regular meetings to consider leveraging off the enterprise resource planning, general ledger, consolidating tool, provision and other systems available to the tax function. The most important measure is to set aside realistic resource for this project.
Problem 2: Obtaining data
Obtaining data in a format that can be easily used for tax functions is difficult; time is spent on manipulation rather than analysis. Multinationals should discuss what is needed with IT departments, incorporate macros, spend time eliminating duplicates and leveraging relevant data.
Problem 3: Organisational change
Growing companies will add, divest & acquire assets during any given year. The impact of these can cause problems for tax processes. It is important that tax professionals keep up to date with this by getting involved with other departments- building relationships and attending status meetings where appropriate.
Problem 4: Training
Companies quite often overlook the training issue. Although well trained, professionals need to ensure they are maximising processes and establishing best practices. Tailored training is necessary to focus on the specific processes of a country. It is vital to find the right resource to understand the organisation, its processes and systems.
Tax functions are only getting busier, it is therefore vital that multinationals evaluate tax close and compliance processes to ensure the best practices are being established and carried out in an effective manner. Elimination of duplicated efforts will reduce errors, mitigate risk and allow for quicker turnarounds. This will free up time for more value-added strategic services and projects.