How Big Data Can Save You Big Money on Business Taxes
I awoke with a start the other night, realizing the end of March had crept up on me and I still hadn’t done my taxes.
Just thinking about it makes me want to curl up in a ball and hide from the IRS. And that’s just for a single person. Many business leaders know the perils that tax season causes their companies, especially those businesses that operate globally across dozens of different cities, states, countries, all with different taxation rules and rates. But as many companies are learning in today’s new world of work, the weight of tax season shouldn’t – and doesn’t – fall on the shoulders of the accountant and financial types only. The truth is, company’s IT decision makers are just as critical in getting the job done.
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Enter big data, which has analytical powers that can help your finance department consolidate company tax information to easily glide over regulatory hurdles and prevent potential fines. What you need to take control of your business taxes are the right technologies and information processes in place to harness all that data.
GETTING SMART WITH BUSINESS INTELLIGENCE
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According to Business Finance, tax or finance departments actually only need a piece of the massive amounts of data on offer. Forget quantity — what you’re after here is quality. With tax laws and regulations changing every year, make sure you’re up to date on the latest rules. There is a potentially large amount of data to go through, so you’re going to want to automate things as much as possible. Tax determination software will help, and you want to make sure you choose one that has ETL (extract-transform-loadtools) to consolidate taxation data stored in multiple systems and integrate it with the annual changes to tax law.
One you have all that raw data collected, you’ll need business intelligence software to apply analytics and arrange it all into an easy-to-read dashboard. The data is lurking in disparate places, and business intelligence software will help pull it into a central repository to be analyzed. Some companies are even building apps in order to support their business intelligence products. Though these tools were created to monitor data from multiple sources, be careful that you don’t choose a BI system so complex that it is impossible to use with ease, requiring extra money to be spent on continuing training. You want a business intelligence system that can be simply and quickly accessed, and integrates well with your legacy systems, so you don’t miss important details on your business taxes.
BIG PLANS FOR BIG DATA
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Can’t afford to build the IT architecture to support big data applications? For small and mid-size companies it comes down to making sure you determine your data goals and start small. According to Accounting Web, these organizations need to be sure the data they’re analyzing is high quality (or this whole thing will be an exercise in futility); hire internally or externally to place highly skilled data scientists at the helm of these projects; and get buy-in from both superiors and underlings that it’s time for a change, and change is good.
The tax or finance department in particular should be made to understand that while this may be time-consuming to implement, it will result in many operational efficiencies that will eventually make their jobs much easier.
That’s the promise of big data: being able to breathe easier even as the information you’re handling gets more complex. And with the right people, processes and tools in place – i.e. information mobility – businesses can harness this data to make tax season seem a little bit brighter.
Author Sarah Schmid
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