Moving away from spreadsheets: 3 ways to automate your tax process
Keep using spreadsheets? Sure, they have their place, but it’s more for certain types of tasks, not necessarily for everything that you’re trying to do.
I know there is a big push to stop using traditional spreadsheets because of the many risks associated with it, but I think by having them function alongside your software solutions, you can benefit from the best of both worlds!
There is no doubt that spreadsheets have their place. They are great for running scenarios, testing out accounts and doing quick calculations to prove or disprove something. More than 60% of businesses rely on it, more than 30 years since it was launched, so it’s part of the corporate furniture and likely to be here to stay.
Cost of convenience
It’s the easy option, people are comfortable with it, so it becomes your default. You don’t have to think about it too much, you just whip up some pivot tables, plug in your numbers, effectively knocking out a report in minutes.
But that’s probably also one of its biggest pitfalls, and that’s where the potential costs and risks arise.
Spreadsheets might be easy, but they don’t have the level of built-in control mechanisms and auditability that specialised software applications offer. No central platform for the ‘true’ version of the spreadsheet, accessible across the enterprise at any time.
This of course is needed now more than ever with an increasingly remote workforce, and to ensure version continuity in the event of staff changes.
With the rapid regulatory developments in compliance, errors abound when you cannot account for these in your spreadsheet calculations. Importantly, these common files are generally missing the checks and balances that a smart software application can offer your practice or organisation.
Look, I could go out and build a spreadsheet model, and it will do the job. But when there are changes, the onus is on me, the risk is on me to ensure that the template I’ve built is accurate because it has flow-on effects. And with 54% of respondents reportedly feeling under-resourced, according to the 2020 Corporate Tax Departments Survey, employees are not looking to take on any extra risk.
When you’re using a software solution, you’re effectively reducing the risk of human error. At Thomson Reuters we have teams of people to cover you, looking at every stage of the process with a premium level of rigour, staying abreast of all the regulatory, accounting and tax technical changes so it’s reflected in every place required throughout the software.
Can you imagine the embarrassment of having to explain to senior leadership, the board – or worse – the tax office or market that you made a mistake due to an error in a spreadsheet? Using software is all about reducing this risk and these days arguing that it is enough to use a spreadsheet-based model I built just won’t stack up.
Benefits of levelling-up with a software solution
Don’t just take my word for it! I want to share three real life examples where we have seen our customers move away from spreadsheets to adopting tax technology.
1. Mitigating risks and saving time on corporate tax calculations
Challenge: Customer A recently found managing and checking data from their trial balance, that flowed through their internally built spreadsheet through different workbooks, became time-consuming and increasingly risky as their group and consequently the number of workpapers grew.
Solution: This process was streamlined in ONESOURCE which pre-fills calculation workpapers with trial balance data and automated tax sensitive adjustments across all entity calculations within their group.
2. Reducing errors and adding value when preparing statutory reports
Challenge: Customer B was preparing their statutory reports between Word and Excel and found issues with rounding discrepancies and transposition errors. They were looking for a way to reduce these time-consuming errors so that they could shift their time to more value-added tasks in the year end process.
Solution: The dynamic linking of any numeric data into financial statements disclosures and wording within ONESOURCE helped address this pain point. Through inbuilt rounding logic, and letting the system calculate numbers meant less time was spent on adds, checks and updating disclosures.
3. Accelerating multi-jurisdictional trial balances to streamline tax provision
Challenge: Customer C was dealing with multiple FX and tax rates in Excel when preparing a global consolidated tax provision calculation.
Solution: Using ONESOURCE they were able to streamline their process by entering country specific FX and tax rates which automatically converted local currency trial balances upon upload. They can now easily view their tax numbers in either local or reporting currency with a simple toggle switch.
If manual spreadsheets are failing to keep up with your company’s growing demands, request a call back from a ONESOURCE specialist for a confidential consultation.