Why Your Accounting/ERP System Is the Key To Successful Business Tax Preparation
It’s that time of year – welcome to your tax season activities. The countless Excel worksheets and the complex manual data processes are too stressful and intense. Let’s agree that there are other activities that need your attention.
Struggling With Tax Compliance and Data Management?
Each year we see clients struggle with tax compliance and data management around the following subjects:
- Nexus and State Apportionment; sourcing revenues and expenditures to appropriate jurisdictions to identify state filing obligations and tax liabilities.
- Research and Development; correctly identifying and allocating amortizable R&D costs.
- Inter-company and Transfer Pricing Transactions; distinguishing entries between related entities or groups for proper reporting on consolidated tax returns.
- Sales and Use Tax; noting jurisdictions to which there are filing obligations and keeping up-to-date with tax rate changes to ensure correct calculations and timely, accurate filings.
- Quality of Tax Data; general improvements to enhance the reliability of information and timeliness of closing out accounting periods.
Benefits of a Modernized ERP System
As you prepare for this tax season, are you utilizing reliable and agile accounting/ERP software? A modernized system enables:
- Accurate and real-time financial reporting
- Reliable audit trails
- Fast financial close
- Access to cross-functional reporting and detailed analysis
- Efficiency
We’ve partnered with clients to make their accounting software or ERP system even more efficient. Here are some specific examples of success:
- Support growth and expansion, especially with the inclusion of CPI pricing at the invoice level versus a manual process to create a sales return, manually calculate the unused portion of the contract and reissue the invoice with original unexpired product and services along with the new product and services which consumed days of effort and wreaked havoc with revenue recognition Excel worksheets.
- Enhance financial management with 360-degree views. For example:
- Dashboard alerts for team members to complete activities, avoiding missed deadlines and potential non- compliance.
- Utilize foreign currency automation which saved 4 to 5 hours of manual effort every month to translate foreign currency in multiple worksheets.
- Increase data access, transparency, and internal visibility, especially with sales tax audits by providing physical location record information with audit trails. The taxing authority auditor’s request to pull invoices substantially decreased.
- Consolidate operations for traditional management reporting (ex: logging into 19 separate legal entity instances and then waiting 3 hours to run all the Trial Balances, which were then exported to Excel to consolidate the numbers). This old process, which consumed at least two people for a minimum of 1 to 2 days every month, was changed to accessing real-time information contained in Consolidated Reports via Saved Searches.
- Achieve automation through workflow, dashboard alerts, and saved searches, especially with processing vendor invoices and exposing the capability to view the invoice online and drill back to the General Ledger details.
- Lessen the risks associated with a previous reliance on Excel worksheets to complete accounting and revenue recognition-based tasks.
- Lessen the external auditor’s (e.g., USA and Statutory) work as audit trails were accessible and reliable along with improved financial internal controls through access/permissions and system inherent controls such as auto-generated invoice numbers with audit trail down to the record level.
Successful ERP Implementations
Imagine the possibilities and potential of a modern accounting system as you work on compiling information to complete the Tax Organizer. Working with Withum’s ERP Specialists can help your business solve these tasks within your software and make the annual tax compliance task less onerous. Our ERP and tax specialists will work with you to leverage modern technologies and drive business value.