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How big data can save you big money on business taxes

by Sarah Schmid
 
Business leaders know the perils that tax season causes their companies, especially those businesses that operate globally across dozens of different cities, states and 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, the company’s IT decision makers are just as critical in getting the job done.

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.

​The weight of tax season shouldn’t and doesn’t fall on the shoulders of the accountant and financial types only. The company’s IT decision makers are just as critical in getting the job done.

Getting smart with business intelligence

According to Business Finance1, 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.

Once 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

Can’t afford to build the IT architecture to support big data applications? For small and mid-sized companies, it comes down to making sure you determine your data goals and start small. 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.

Saving money doesn't have to be taxing

See how your organization can optimize processes that make for a smoother, more cost-effective accounting process.
 
Sarah Schmid
Sarah Schmid is a writer with more than 15 years of experience in the workforce, with stops including a newspaper newsroom, a political campaign office, and in a government public relations shop, where she became intimately familiar with the key issues that are affecting today’s worker. During her travels, she’s seen it all – horrible bosses, co-workers that have become life-long friends, backstabbing rivals and great mentorship. She holds a bachelor’s degree in journalism from the University of Montana and is a resident of Detroit, which she proudly calls “the most fascinating city I’ve ever lived in.”
 
 
1 Kennedy, John F. Business Finance. 12 November 2013