Why automation and tax data wrangling are so crucial

Making a difference with data

The US tax environment has changed significantly over the past few years. And with even more legislative changes around the corner, income tax compliance and provision processes are becoming more complex. Many tax departments are spending tremendous time and effort revamping their tax compliance processes.

More than ever, that time and effort need to be data focused. By optimizing data sources, enabling automation, and leveraging data-wrangling tools, tax teams can streamline data collection, calculation, and reporting; and complete the tax life cycle efficiently and effectively.

It takes a next-generation tax department to keep up with today’s ever-changing demands. Typically, before any sophisticated dashboards can be presented, data needs to be centralized. It needs to be clean. And it needs to be consistent.

With the right data blueprint in place, tax teams have a much better shot at staying ahead of changing requirements and rising expectations.

Navigating an ever-evolving tax landscape

As regulatory requirements have become more complex, demands on modern tax departments have risen. Tax teams must navigate increasingly complex entity structures and intercompany transactions, combining data across databases and international borders. Ultimately, tax teams must review and analyze all this data to verify the accuracy of reporting. To check all these boxes, many tax analysts spend most of their time on the leg work of gathering data from divergent sources, then compiling and manually processing it.

Data needed for tax calculations may reside in enterprise resource planning (ERP) systems, legal entity databases, fixed asset systems, and numerous other sources. If information changes in any of the multiple source documents after processing is underway, tax teams may face a substantial amount of rework to address, validate, and reconcile changes. In addition to being inefficient, this data management effort often delays true value-added analysis—needed during close and reporting cycles defined by limited time and resources.

To manage the flow of data in real time, mitigate the risk of human error, and address resource constraints, tax teams need technologies that help create an effective global process that improves efficiency and accuracy throughout the tax reporting life cycle.

Strengthening your data foundation

In a fast-moving and ever-changing tax environment, data wrangling and automation tools integrated with existing software and workpapers provide powerful new ways to adapt and thrive. Organizations can quickly create their own standardized database and benefit from simplified analysis and calculations for tax processes.

Data is the foundation today’s tax departments are built on. Tax teams can strengthen that foundation with automation and data-wrangling technologies that allow people to focus on interpreting data, not just processing it. Automation of tax data can bring improved accuracy, efficiency, traceability, version control, and return-to-provision processes. Deliverables can be refreshed in real time. Teams have a one-stop shop for review. And accelerated timelines can allow for earlier filing.

It all adds up to accomplishing more with less effort. Less time on data validation. More time on data analysis. The end result? A confident tax department filing returns based on data that can be validated in real time across all entities.

Putting the possible into practice

Deloitte Tax Technology Consulting helps organizations design and manage their tax function and operating model through a tax technology ecosystem that aligns to their enterprise vision. Led by professionals with deep business, tax, and technology knowledge, we support tax teams to identify, design, implement, and maintain systems with the power to transform processes, governance, and risk assessment—bringing accuracy, transparency, and control to your tax function.

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