Corporate tax department preparations for smooth tax engine implementation
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As corporate tax departments embrace digital transformation, utilizing a tax engine to automate and simplify tax calculations and reporting is becoming a core part of their strategy. Indeed, fully half of tax professionals surveyed recently said their companies are either already using an indirect tax determination engine or plan to purchase one in the next 12 months, according to the Thomson Reuters Institute 2024 Corporate Tax Technology Report.
Given the numerous advantages of automating manual tasks—like reducing human error, keeping up with regulatory changes, and embracing innovation for increased efficiency, accuracy, compliance, and reporting—it’s clear that implementing such a solution is beneficial. However, introducing this system comes with its own challenges. Addressing these issues from the start of your tax engine integration project is crucial for success. Here, we provide suggested strategies to overcome your business’ tax engine integration challenges in the digital transformation process.
Highlights:
Integrating a tax engine is vital for automating tax calculations, but it requires meticulous project management.
Seamless integration with existing IT systems, particularly ERP solutions, is crucial for accurate tax calculations and reporting.
Thorough testing and continuous improvements help ensure your tax engine functions correctly and delivers expected results.
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Manage the demands on your tax department
Integrating new technology requires meticulous project management for tax professionals. Numerous individuals will be involved, either directly as part of the implementation team, semi-directly with additional tasks, or indirectly as they adapt to significant changes in their work processes.
The most significant impact will likely be felt in the tax department, where leaders may need to assume additional responsibilities alongside their regular daily tasks to ensure the project’s success.
It will be crucial to plan appropriately to ensure demands placed on various departments and individuals are manageable. They should understand the project’s purpose and be supportive, assisting with implementation and testing, embracing technological changes once they occur.
It’s important to determine who will be impacted and notify them beforehand about what is expected and when they need to participate. This provides an opportunity for them to ask questions or voice concerns. Ensure they have ample time to complete their tasks and consider easing other workload pressures if necessary to prevent unnecessary stress.
When teams are spread across various locations and time zones, or are working both remotely and in-office, managing logistics becomes increasingly complex. Therefore, effective communication and coordination among all involved parties will be essential.
Streamline your workflows and communicate the benefits
Introducing new technology solutions should be seen as an opportunity to review and improve your existing workflows and processes. The benefits of doing so can be both operational and strategic.
Simplify tedious manual tasks and reduce the chance of human error by utilizing the tax engine to automate processes such as updating tax laws, rules, and rates. This will enable tax teams to concentrate on other significant work, such as identifying tax savings, addressing complex compliance issues, or analyzing data to offer business insights and generally providing enhanced support and advice to the company. In this way, digital transformation can positively change the tax department’s role within the business, allowing it to add value in new ways.
Make sure staff understands the benefits that the tax engine implementation will deliver, what pain points it will solve, and how it will make their jobs more satisfying. Explain how process improvements will make their work more efficient, less repetitive, and reduce errors, freeing them up for more rewarding or critical tasks.
Additionally, offer advanced technology training and on-going technical support. This will be particularly important for preparing individuals stepping into new roles once the tax engine is operational, but it can also make a big difference for employees whose existing roles and ways of working will be impacted. Your software provider should be capable of assisting with training and guidance during the transition phase and provide further support as necessary afterward.
Create a robust framework with smooth integrations for tax technology
Most companies use a plethora of different IT solutions to support their everyday operations, so your tax engine needs to be able to integrate seamlessly with your existing tech stack, particularly with your enterprise resource planning (ERP) system.
By integrating your data seamlessly with your tax engine, you can streamline processes, ensuring accurate and timely tax calculations and reporting in accordance with relevant regulations. What’s more, using compatible systems creates a holistic technological ecosystem in which the tax engine is aligned with other financial and business applications.
When selecting a solution, opt for one designed for seamless integration and secure data migration between applications. Choose a provider that partners with top tech and consultancy firms to enhance their offerings. By combining best-in-class tech capabilities with strategic advisory services through these partnerships, your provider can deliver a stronger framework for digital transformation and the successful integration of advanced tax engines.
Thomson Reuters ONESOURCE Determination software connects easily to ERPs such as SAP and Oracle® with pre-built and certified connectors and to virtually any other business systems using standard APIs, all for seamless, fast, and secure integration. We also work closely with industry-leading experts and consultants at firms including Deloitte, EY and KPMG through our Partnerships & Alliances, which makes digital transformation easier for our shared customers.
Test technology thoroughly and make continuous improvements
The significance of advanced technology testing cannot be underscored enough. This is your opportunity to thoroughly examine and confirm that the system is functioning correctly and fulfilling the needs it was intended to address.
Don’t just test in a hypothetical sense: best practice dictates that implementation teams should test as many real-world business transactions and processes as possible. Nor should testing be confined to the tax engine only: all modules that interface with it should be evaluated, all sources of data checked, and all tax-specific functions stress-tested to ensure that the results are delivered as expected. Form a habit of testing these aspects continuously to ensure all items are working cohesively.
Thorough testing not only addresses current issues, but also helps prevent future problems. If issues do arise, the initial tests can be reused, reducing risk and saving money over time. Your provider and their partners should offer valuable assistance in this area.
Consider using various metrics to assess performance and evaluate the success of your technology implementations. Only 27% percentage of corporate tax professionals report that their departments currently do this, and those that don’t might be overlooking valuable insights, such as the ROI it is providing. By measuring what’s working well and what is not, you can hone your processes over time and deliver continuous improvement (and enhanced ROI).
Leveraging new technology, particularly a transformative tax engine, can be a major undertaking but it is worth the investment. The more effort you dedicate upfront to choosing the right solution, assembling the right internal team, involving your employees, and refining your processes, the greater the chances you will reap the full benefits right from the start. Planning, communication, and a strong relationship between your tech providers are essential to ensure a smooth transition and successful adoption of your new solution.
Discover how Thomson Reuters ONESOURCE Determination can help meet your tax engine needs and find out more about its partnerships with leading technology and consultancy firms.
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