5 Use Cases to Help Tax Professionals Take Back Their Time
According to IDC, six billion hours per year are spent working in spreadsheets
How many hours does your team spend in spreadsheets?
What if you could lower that number while also increasing efficiency and accuracy and minimizing efforts, errors, duplicate work, and penalties?
Discover five common tax processes that can be streamlined to create faster reports and clearer audit trails.
Use Case #1: Tax Apportionment
100+ hour process reduced to 7 minutes
Tax apportionment is no longer as simple as property, payroll, and receipts. It can be a time-consuming, complex process to determine how each sale or transaction should be taxed and how to divide income among different states. There’s also a higher risk of errors and inconsistencies when the process is done manually.
Spending too much time considering apportionment issues
Determining what’s included in states’ apportionment formulas
Not having the correct data for apportionment calculations
Overpaying or underpaying taxes based on current apportionment issues
Quickly and easily bring together multiple data sources, save on internal labor costs, and increase accuracy so you can reduce penalties. Analyze entire datasets, not just samples, minus the headache.
A large global REIT reduced its 100+ hour state apportionment process to seven minutes while eliminating approximately 90% of quarterly tax underpayments.
Use Case #2: Accrual Automation
80-hour accrual process reduced to 2.5 seconds
Accrual accounting can be more accurate than cash basis accounting, but also more complex, especially with the increase in information on accounting statements. If companies aren’t looking at the right data, they’ll run into forecasting issues.
Creating consistent reconciliation processes
Finding and analyzing the right data from different sources
Ensuring data quality, especially around revenue and expense data
Producing a clear audit trail with an increased amount of information
Reduce redundancy in managing accruals and compliance and create a complete audit trail.
A global transportation and logistics company reduced its accrual process from 80 hours to 2.5 seconds to save $32K annually.
State tax rules constantly change as states try to capture sales and use tax from e-commerce sales and online transactions. This makes it both difficult and time-consuming for companies to understand their tax obligations on out-of-state activities and transactions.
Incorrectly invoicing customers as nontaxable, tax-exempt, or with the wrong tax rate
Staying up to date on exemption certifications and states’ sales and use tax laws
Misunderstanding nexus obligations
Audits that result in penalties, interest, fees paid to tax pros, and worker hours lost to collecting proper documentation
Quickly assess at the transactional level and reconcile the taxes applied to what should’ve been applied based on the rates. Alert tax groups to any transaction instance in which inappropriate taxes are applied the moment it hits the general ledger.
A corporate tax services firm reduced manual processes by 50% and is saving time on sales and use tax reporting.
5-month fixed asset processing time reduced to 5 minutes
Fixed asset depreciation can help companies reduce their tax bill, but companies need to make sure their depreciation reporting is both accurate and timely and that they’re using the right calculations since they impact bottom-line tax amounts.
Using manual and outdated processes that lead to mistakes and inefficiencies
Staying aware of tax law updates and making sure calculations reflect them
Reconciling data from disparate sources to calculate metrics, such as cost of goods sold, operating expenses, earnings before interest/ tax, etc.
Finding the best method of calculations that consider both flexibility and accuracy
Tracking and reviewing calculations to ensure proper management
Read, analyze, and wrangle data from multiple sources, such as ERP systems. Test multiple complex calculations before final outputs are produced.
An industrial corporation that manages hundreds of thousands of rail cars reduced its fixed asset processing time from five months to five minutes.
Approximately 2,000 hours saved on transfer pricing processes
While transfer pricing can lead to tax savings for companies that have divisions, subsidiaries, or affiliates under the same enterprise, it’s also one of the riskiest areas from a compliance standpoint. Since transfer pricing involves interpretation of facts and assumptions when choosing an economic model, there’s always a possibility of penalties, double taxation, and adjustments to taxable income.
Scenario testing across multiple business units and data sources (tangible goods, services, intangibles, loans, etc.) that involve complex logic
Needing to adhere to specific models, such as Arm’s Length and other standards
Lacking an audit trail for TP processes
Having complicated intercompany and legal entity structures
Determine optimal prices with automated transfer pricing calculations and scenario testing.
A multinational accounting firm saved about 2,000 hours on transfer pricing processes, transfer pricing studies, scenario planning, and forecasting.
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See how your tax department can use Analytics Automation to take back their time and maximize efficiency and performance.