Fatihah Ramzi | 14 January 2022
With workforces and operations being forced to move virtually, what can you do to better prepare your business in handling tax liabilities in the virtual world?
With constant technological innovation and growing regulatory expectations, completing today’s taxation task with existing resources was already a struggle. The consequences of COVID-19 have revealed flaws and added to the strain on tax departments to be more agile. Which is why it has been necessary to act promptly in order to meet urgent needs.
However, leaders have the chance to think creatively and develop a more flexible tax operating framework that can bend and grow to accommodate unpredictability and change now and in future, thanks to magnified efforts of people working better together with the right technology. With that in mind, here are a few actions you can take to better prepare your business for handling establishment tax liabilities in the virtual world.
Get Your Data Ready For The Virtual Environment
Every dollar a firm spends or makes has a tax effect, making tax the single most important user of financial data in any organization. It may be difficult for tax departments to swiftly transition to a virtual work environment if they lack the technology to acquire, manage, and report on the data needed to drive tax calculations and procedures. It is difficult to retrieve data from paper files or shared disks and spreadsheet data tampering is tough to control and can jeopardize data integrity. That’s why it is crucial to arrange your data so that the team may work remotely with confidence. You can start by making a list of your core data requirements.
Create a system for remote access and central data administration for your virtual workforce. From there, you may find easy automated systems to boost movement efficiency and control across numerous tax calculations. You should also employ more automated systems to simplify the data-wrangling required to get your data tax-ready, enabling your tax team to focus on delivering value. By identifying and targeting continuing automated and cognitive opportunities, you may learn from the data difficulties you have faced. This roadmap will help to develop data infrastructure incrementally over time.
Acquire The Right Technology To Support Virtual Collaboration
Check to see if your IT infrastructure and operations are ready to support your remote workers. This necessitates extra methods of communication, more organized hand-offs, and possibly greater resources on the part of tax teams. With a collaborative tool that can facilitate accessibility across all processes, file sharing, workflow and calendar tracking as well as other crucial project management components, you will be solving your workforce’s most pressing needs.
Extend your collaborative platforms to improve automation and transparency, as well as implement novel solutions to boost efficiency, or explore outsourcing to automate important procedures and take advantage of a service provider’s continued technology investment. Compare the cost savings of outsourcing against the cost savings of building a solid collaboration platform in-house. Any corporate system upgrade, such as a broader technological architecture migration to the cloud, should be done in collaboration with the business. Adopt a business-driven IT strategy that includes automation and cognitive technologies to help the company generate more value.
Develop Standardized Processes
It is challenging for many tax departments to standardize the processes they need to satisfy their day-to-day responsibilities. This problem may be exacerbated in a virtual work setting. The tax department will be able to grow resources to meet existing as well as prospective company needs if processes are adequately defined and recorded. Develop temporary solutions for paper-based and manual operations that can be carried out in a virtual office. Establish process handoffs, checkpoints, and integration with any contract workers. To assist virtual operations, consider implementing basic workflows.
Revisit and adjust those temporary workarounds to codify methods that will allow your tax team to operate more efficiently and effectively while reducing risk. As you prepare your strategy for managing backlog, remediation, or postponed initiatives, prioritize these process goals considering changed resource models and technological implications. Extend workflow to accommodate internal controls and dashboard reporting and create checklists when further process assistance is required. These steps will ultimately help any company in developing more standardized processes when handling tax related matters.
Strengthen Data Security & Internal Controls
With overall tax institutions working remotely and the enhanced level of communication through the use of web-based applications and virtual sharing of information in the new virtual environment, having an established data security and internal control systems are critical. With that said, you can organize a collaborative online session to discuss your virtual tax department’s imminent difficulties and prospective opportunities.
Make a list of your most vulnerable tax procedures and make sure they will work in your virtual environment. Formalize and implement a strategy that has been agreed upon, while preserving clear communication with your team and stakeholders. Examine and improve your structure for tax governance, risk, and control. Make a roadmap that recognizes and specifies how you will solve any shortcomings or opportunities you find. Establish your action plan and schedule, as well as decide on, record, and execute process maps, restrictions, obligations, and risk monitors.
By adhering to these 4 steps, companies are able minimize risk and produce long-term value. Through establishing the various procedures mentioned above, your company will be well equipped to face any possible challenges or vulnerabilities in the virtual environment and you will also be able to stay on course when it comes to managing your tax liabilities.