The hexagon provides an overview of the main elements that need to included in your tax technology plan.
Ingredient 1: Objectives
Which area of tax is your company’s main concern?
- Wages tax
- Tax Accounting
- VAT Compliance
- TP Documentation
- Customs & trade
- Risk analytics
- Income Tax Return Preparation
Ingredient 2: Output reverse engineering
Instead of starting at the beginning, you must begin from the end of the process. If you start with the outcome and walk back through the project, this will show a new perspective on the workflow processes.
Ingredient 3: Organization & governance
What does the organization currently look like? Indicate internally which departments are included in the automation. Afterwards, using the RACI model, we define the individuals who will participate in the transformation project. Thus, you can trace the work currently performed by the employee and decide whether such position and work load need to be automated.
Ingredient 4: Workflow selection
How do you determine what process to automate? The organization needs to decide which workflow needs to be automated, however they need to bear in mind that very difficult and complicated work processes are not the best option to be automated. Instead, they should be looking at easy repetitive processes to automate. Besides selecting the redundant work, to make the automation more effective, the company requires to set priorities in the project. It is often the case that the company wants to automate multiple areas at once. This is however virtually impossible since such an implementation requires a lot of attention. Therefore, a priority for a project can be better represented.
Ingredient 5: Functionality selection
Currently, there are so many tax technologies offered in the market covering all type of taxes, ranging from indirect tax to direct tax as well as transfer pricing. In order to select which software to be used, the company should be aware of their tax transformation goals. For instance, in terms of transfer pricing, the company needs to answer the following questions to decide to what extent a company’s TP process should be automated and/or what software package/functionalities would be the best fir with the company’s control framework:
- How does the company’s short-term TP software ambition look like?
- How does the company’s medium/long term TP software ambition look like?
- Rank the top 5 important criteria to build the company’s business case to the CFO
Ingredient 6: Project Implementation
Project critical success factors: Which elements are fundamental to achieve project goals?
Project approach: How to execute your tax technology plan?
Once everything has been completed and the software has been selected, the question you should ask as a company is, how will it be implemented in the coming period? Similar to any other projects, this requires a timeline.
By following these six steps, you can construct your company’s own Tax Technology Plan which can function as a roadmap.
Get in contact with us for a customized plan!