Jump-Starting Tax Automation, With Practical Tips to Sustain Momentum: Tax needs automation now more than ever-and fast.

• Author: Femmer, Justin

Tax functions have pursued automation and efficiency for a long time. Enterprise financial and management reporting systems are not designed to produce tax outputs such as tax provisions, tax returns, and other key tax deliverables, but instead provide the source financial data required to prepare the tax calculations--and that is at best. This leaves a lot for the tax function to do in terms of data processing, data blending, calculations, and producing deliverables. The current pace of legislative and business change is adding to the level of effort required and highlights the need for dynamic and flexible models.

Tax functions need automation now more than ever--and fast. The flow of new legislation and regulations and the increasing level of reporting obligations have been the primary contributing factors, but there are others:

* impending global tax reform;

* finance teams pushing for a quicker close cycle;

* desire to trim costs and be more fit for purpose;

* C-suites demanding more real-time transparency;

* demand on tax leaders to support faster decision-making;

* talent shortages making new hiring challenging and expensive; and

* more time required to meet extraordinary demands and assessments of special projects.

Legacy approaches to automating tax processes have often included efforts to optimize enterprise resource planning (ERP) projects, buying (and implementing) third-party tax software, building custom applications, and using spreadsheets to fill in the gaps. These efforts have been categorized as "slow to start, slow to move," and have often struggled to keep up with changing needs and environments. More important, these solutions are clunky to maintain, requiring deep understanding of the technology in addition to tax technical knowledge.

But transformation is happening in this space for good. Many tax functions are investing significantly in citizen tools to complement and optimize ERP systems as well as other enterprise-wide tools, since these solutions are easier to build and maintain while at the same time reducing reliance and overhead on technology subject-matter experts. The ability to quickly stand up powerful and dynamic automation models using new and emerging citizen technologies has brought much-needed change in the approach and provided immediate relief. The days of experimenting are gone, and automation is no longer at the bleeding edge, since many companies have already gone down this path. But to launch, sustain, and scale a program successfully using these tools is where leaders differentiate themselves.

For example, PwC has been working with many of the leading companies to build the tax function of the future, providing cutting-edge and practical approaches to automation. Throughout this article, we will share key tips and variables to effectively launch and maintain successful programs.

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