IPT 2015 Sales & Use Tax Symposium Indian Wells, CA. Tax Accrual Data Analytics Dashboards to Minimize Risk

Transcription

1 IPT 2015 Sales & Use Tax Symposium Indian Wells, CA Tax Accrual Data Analytics Dashboards to Minimize Risk

2 Presenters Holly Hamby Weatherford IT Director Tax Les Jackson Deloitte Tax LLP Senior Manager 2

3 Objectives 3 Trends driving indirect tax data analytics What is indirect tax data analytics How are indirect tax data analytics used Benefits of indirect tax data analytics Business case, impact and strategy for tax data analytics Demonstration of sales and use indirect tax data analytics

4 Why does tax matter? In most companies, tax is largest consumer of financial data. Companies can pay 50% or more of earnings in taxes. Tax impacts both cash flow and the bottom line. Every organizational life event has tax consequences. Every financial transaction has a tax impact. Tax is a critical part of overall regulatory reporting. 4

5 Why does tax matter? Tax applies whenever A project crosses geographies Functionality touches inter-departmental services Applications touch employee data Systems are involved with the tracking of goods, purchases, sales or financial transactions Taxes that may apply include Income Taxes (International, US Federal, State & Local) Transaction Taxes (VAT, sales, use, etc.) Property Taxes (Real estate, personal property, etc.) Employee benefits and related items 5 essentially, tax is everywhere.

6 6 Tax management challenges

7 Five trends driving tax data analytics Data volumes and technology capacity Regulations Profitable growth New signals 7 Hidden insight

8 Tax technology maturity and value continuum Progressive Value Static Limited technology Reactive Independent country tax engines Proactive Portfolio of distinct tax technology tools Integrated enterprise and tax solutions Maturity 8 Domestic return focus Spreadsheet software No automation No rules maintenance Limited controls Data flow is less controlled and more unstructured Global return focus Single country tax apps Some externally maintained rules Limited automation Data flow a bit more controlled, but still unstructured Return and provision focus Provisioning systems Tax classification systems Workflow & risk tools Limited multi-country systems Data flow contains more structured data with smaller unstructured footprint Global tax process focus Integrated tax and business process Global data warehouse Tax Portal Data flow is clean and concise Enhanced data analysis for planning Tax data leveraged for trend analytics

9 What is Tax Data Analytics? Tax data analytics combines tax technical knowledge plus large sets of data plus new technology tools to generate insights and deeper understanding. It can help an organization s Tax function make smarter, real-time decisions to improve performance of businesses and drive strategy. Hindsight Tax Function Change the mindset from what I need to do to what I need to know 9

10 Why Data Analytics? 10 Risk management Creates a benchmark of tax profiles to compare against publicly available information, which helps identifies potential tax risks. Tax error reduction Highlights anomalies, bringing attention to potential errors. Tax savings opportunities Reduce manual efforts and identify potential opportunities for tax savings including tax overpayments. Reduce administrative costs Helps streamline and automate tax processes. Better investment decisions Aids in evaluating specific planning scenarios to improve the potential return on future investments.

11 How is Tax Data Analytics used? 11 Track performance Identify key issues Perform root cause analysis Create feedback loop Track corrective measures Provides visibility into business scenarios run by Tax, new business models, products, and/or legal entity transactions. Identify key Indirect Tax issues on procurement, sales, and intercompany transactions. Facilitates continuous monitoring of tax results and helps users identify and analyze errors. Creates feedback loop into the business to manage costs and data. Monitors current tax positions over time and identify cases where under or over taxation may occur.

12 The benefits of a tax analytics Tax transformation process Traditional Transition Transformative 12 Manual data collection Manual data reconciliation Manual data manipulation Manual data import 80% data preparation 20% data analysis Identify pain points through data mining Centralize data Standardize data Data import automation Automated data management Insightful analysis Scalable and efficient Shortened compliance life-ycle 20% data preparation 80% data analysis Transforming tax departments from data organizers to data analyzers

13 Tax analytics: Multi-user capability Business Perform root cause analysis Tax Department Create feedback loop 13 Identify key issues C Suite Benefits Risk Error Administrative Management Reduction Costs Tax Savings Investment Opportunity Choices Track performance Track corrective measures over time IT Director

14 Finance and now Tax transformation Catalyst Future State Strategist 14 Steward Current State Operator

15 Tax Data Analytics - Impact Provide strategic viewpoint Manage Operations (risk/efficiency) Impact tax liability 15

16 Develop a Tax Analytics strategy Review processes/ data Collaborate between Business and IT Implement strategy Achieve goals 16

17 Value driven analytics The art of the possible Dashboard 17 High-level accounts payable spend analysis Top spend by GL or vendor Use tax by jurisdiction Top spend by company Custom analytics Different vendor and calculated use tax No use tax charged Potential refund opportunities Vendor and system calculated taxes equal

18 18 INDIRECT TAX ANALYTICS DEMO

19 DEPLOYMENT MODELS Considerations for deployment of Indirect Tax Analytics 19

20 Deployment and hosting models 20 Model User interface Server Database Description Local Windows n/a Network drive, analytics file Server Windows / Web Hosted Web Hosted Analytics server Hosted Analytics server Hosted Relational database Hosted Relational database Purchase and install desktop licenses Create data files from monthly loads Data files sharable on network drive Purchases analytics server platform IT installs, configures and maintains platform IT loads periodic data Access hosted analytics via a secured internet connection and a web browser Maintains server infrastructure. There is nothing for clients to install Transfers data to secure server for uploading

21 Tax Data Analytics: Recap Look forward rather than back 2. Discover and simulate rather than slice and dice 3. Avoid additional expenses that put the business and its stakeholders at risk 4. Predict what will happen rather than just understand what did happen 5. Model changes that could happen and improve information rather than just providing it 6. Establish and use key performance predictors (KPPs) rather than just key performance indicators (KPIs) 7. Uncover hidden patterns that may otherwise go undetected 8. Gain transparency into your organization s data 9. Provide your C-Suite with critical business-planning data 10.Gain potential cost-savings resulting from increased tax efficiencies

22 22 Q&A

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