Microsoft Excel will always hold a place in the hearts of tax professionals. It’s familiar and gets the job done. But as ubiquitous as it is, Excel isn’t ideal for every tax task.
Next time you’re making and tracking changes through a mountain of data in Excel—consider three ways tax automation saves you time and offers peace of mind.
1. Adding Entities to Provision
Acquiring a new entity? If your provision workpaper has tons of tabs, links, and formulas, settle in for a long day. It takes time and focus to comb through that workpaper, update every tab, and link them together. You could spend hours trying to ensure everything computes correctly, and even more hours finding that one little formula error that blew everything up.
On the other hand, well-defined provision data in a tax system makes adding entities quick work. No need to reengineer a fragile workpaper, reestablish dependencies, or doublecheck formulas. Simply add a row of entity information and voilà: org charts are restructured, automated adjustments calculated, and reports and workpapers updated to reflect your new entity.
2. Applying Federal Compliance Changes to State Returns
If you repeat state compliance work in Excel, you’ll want to ensure federal changes flow through to dependent data on hundreds of state returns. That could mean hours of manual modifications. Not only is this time-consuming, only one person at a time can work in a return. If it’s the 11th hour, get ready to burn the midnight oil.
A tax system is a state filer’s best friend.
- State rules are researched and furnished for you
- A change to federal tax income is automatically reflected on each state return
- An unlimited number of people can work on a return concurrently
That’s efficiency! And if you want to maintain detailed Excel workpapers, leverage the data available in your tax system and link your workpapers. When system amounts change, your workpapers update automatically.
3. Tracking Intercompany Payments Across International Entities
Managing FDII, GILTI, and BEAT in Excel can be a headache. Add the need to track payments between entities (interest, licensing fees, rent, etc.)—now you’re talking real pain. For example, if a key data point like payor’s gross income changes late in the game, get ready to pore through workpapers, recalculate and manually update entities, and painstakingly confirm new numbers appear everywhere they should. Tracing the ripple effect of changes to intercompany payments is challenging in Excel—upping the chance of missing something.
Tax technology fully automates the look-through calculation, saving time, trouble, and risk. Sourcing is readily apparent, changes to any numbers are applied downstream, and audit trails eliminate digging for answers. No need to rely on someone’s Excel formula or hope you’ve properly applied the rules. In short, quickly tracking payments through dozens of entities goes from daunting to doable.
Take a First Step
If you’re ready to explore how tax technology eliminates time-intensive tasks and restores confidence, we can help. Start by browsing the ebook Build Your Case for Tax Technology. To see technology in action, watch this webinar on demand.
From provision through compliance, analytics, and planning, we take tax teams from project-scoping to implementation to tax transformation. Contact Corptax at 800.966.1639 or info@corptax.com.
“Change is hard, but it’s where you need to go for progress. We looked into doing something different to save time and produce better results.”
—Christine Martorano, IT Project Tax Manager, Siemens Corp.
