TAX ANALYTICS, AUTOMATION AND ACCOUNTING AUGUST 14, 2018

Transcription

1 TAX ANALYTICS, AUTOMATION AND ACCOUNTING AUGUST 14, 2018

2 With you today MATT BECKER MICHAEL WILLIAMS KIRSTIE TIERNAN BARBARA TORZEWSKI National Tax Office Managing Partner National Practice Leader, Income Provision (ASC 740) Services National Leader, Data Analytics & Automation National Practice Leader, Tax Transformation Services 2 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

3 Agenda Identifying the benefits and applications of tax transformation services A review of the latest tax technology tools used by accounting firms and corporate tax departments A review of specific examples that demonstrate how to incorporate robotic performance software and analytics tools into your business 3 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

4 How we re seeing clients using technology within the tax function Opportunities Mitigate risk Frees up tax professionals to focus on value added and strategic projects Areas where we re seeing deployment of technology Data collection and management - External reporting o Extracting data from Company systems to process more efficiently o Leveraging opportunities to automate to do things more quickly - Internal o Support o Management reporting Process improvement Streamlining workflows Functional management such as calendars Internal controls 4 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

5 Tax transformation value drivers 5 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

6 Is this your tax department? 6 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

7 Tax process overview Data Analytics Current Historic External Robotics Internal Business reports Management Decisions Sub processes External Financial Statements Divisional reporting Industry Government Tax Returns Tax Compliance International Reporting Data Gather and Confirm Complex Manual Transformation Data entry Tables Input Files and Drawers Network hard drive Database SQL or NoSQL Bridge or Upload Consume Software Tools (ONESOURCE, Vertex, Etc.) SharePoint Archives 7 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

8 Benefits of tax department automation PROCESS EXCEL SOFTWARE Spreadsheet Balance Rollovers Corporate Structural Updates Book/Tax Difference Calculation Updates Consolidation of Data Reporting Manual Time Consuming Error Prone Time Consuming Error Prone Manual Version Control Formula Analysis Formula Dependent Non-standard Data Formula Dependent Static Manual Reconciliation Automated Quick and Easy Easy to Add/Remove Entities Database Accommodates New Items Automated Calculations Can be Attached Audit Trail Tracks Changes Database Consolidates Automatically Standardized Automatically Updated Flexible Slices and Dices Data 8 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

9 Benefits of tax department automation OPERATIONAL EFFICIENCIES Improved use of tax resources Shift focus from data manipulation to data analysis Increase time spent on value added tax planning and issue identification Single data source Faster turn-around time 9 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

10 Tax department transformation TAX ANALYTICS AND AUTOMATION As business systems and data breadth continue to grow in volume and complexity, controlling costs and improving business processes becomes increasingly challenging and increasingly paramount. Goal is to automate and optimize business processes, allowing them to spend more time analyzing data and becoming more valuable to the business and less time tending to mundane tasks. Brainstorm to identify data-related tasks appropriate for automation. Identify the best tools and products that align with the unique requirements of the organization. BENEFITS Spend more time consuming data and less time gathering it. Automate standard business processes. Save time and resources by identifying and improving data inefficiencies. Improve accuracy and quality of work products. Maintain data and document security. Reduce turnover. Limit training effort of new resources. Create an automation roadmap. Implement custom apps and bots with employee training programs for seamless integration into business operations. 10 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

11 How do you select the right tools Tools should fit into your tax technology strategy Focus on the priorities of your organization Both short term and long term Consider synergies with existing technology Look for ways to reuse data Evaluate opportunities to extend existing ERP systems to reduce data collection 11 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

12 Making a business case Focus on Risk Effect that inadequate tax processes have on the company s business Companies who report material weaknesses in tax accounting lose an average of 6.8 percent in their stock price within 60 days of the announcement** Late filing penalties are additional costs, poorly filed returns increase audit risk Tax Technology Value Proposition (TVP) Greater efficiencies + lower risk of error cost to implement = return on investment Cost Saving is Not Necessarily primary focus ** Glass, Lewis & Co. LLC 12 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

13 When to use automation The task is repeated often and is time consuming Many resources doing the same task Data or information produced by the task could be shared Timely processing of data is vital to the business The people performing the task do not enjoy the task 13 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

14 Tax Software Solutions 14

15 Leading provision automation tools 15 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

16 Leading fixed asset tools 16 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

17 Leading sales & use tax tools 17 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

18 Leading property tax tools 18 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

19 Tax automation Top 10 factors to ensure a successful implementation 1. Software alone is not the answer 2. Change (aka fear) management is crucial 3. Demo multiple packages 4. Do not start a project without enough budget 5. Don t try to implement the software yourself 6. Hire a consulting firm with appropriate experience 7. Assign an internal point person to lead the project 8. Don t spend months on the implementation 9. Ensure your department is properly trained 10.Ensure your department is properly supported 19 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

20 Robotic process automation tools 20 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

21 Robotic process automation More time can be spent consuming & analyzing data Maintain data & document security Increased employee satisfaction & retention Improve quality of work product Increase profits through data efficiencies 21 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

22 Project based phases PHASE I Project Initiation PHASE II Systems Design PHASE III Development PHASE IV Implementation PHASE V Follow-up Information gathering Evaluate present system through interviews and brainstorming sessions. Document process and data flow. Identify and document problem areas and concerns. Create project summary memo. Prepare ROI support. Design overview document noting summary level understanding and process flow of proposed solution. Create specs/ requirements document considering the following: Proof of Concept (POC) Technology Resources Testing Deployment Create database to host all data needed for the solution. Create data source connections. Identify audit/ transaction logs that can be generated. Obtain any libraries and/or components needed for the solution. Create code. Test/debug code in sandbox environment. Confirm deliverable/ results are accurate. Create notifications to ensure bot runs as expected. Consider need for additional monitoring. Ensure formatting/ documentation of code is appropriate. Set up meeting with client IT team to discuss deployment. Deploy in test environment. Test implementation. Reconfigure/retest. Review security/ privacy/access. Deploy in production environment. Create training documentation. Conduct training sessions with users. Summarize ROI achieved. Post-implementation meeting and assessment. Identify additional areas for RPA based on initial successes. 22 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

23 Tax provision footnote bot Original process to update footnotes: 3-5 hours New process: 10 minutes 3 reports are run from OneSource Template is configured specifically for client data Footnotes are created and updated Final draft of statements is automatically generated 23 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

24 Address cleansing bot Original process to update footnotes: 3-5 hours New process: 30 minutes Chicago Hieghts, IL should be Chicago Heights, IL Sales data is obtained from multiple systems/clients/formats City/State/Zip Code combinations are often incorrect or misspelled Software robot reviews the address combination and updates the misspelling automatically The cleaned file with corrected address combination is exported for review and processing 24 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

25 Multi-location system bot Original process: 5 and 10 minutes per store New process: runs overnight in the background = no manual effort Each morning I begin by collecting the franchisees sales data Now I can begin to analyze the data and to the other departments John Smith Financial Reporting Developer Lobster Roll Inc. Franchise Restaurants Securely Connect to a store s server Export yesterday s sales and inventory to CSV Import & merge with historical data Access DB Location: AZ TAX ANALYTICS, AUTOMATION AND ACCOUNTING

26 Contract review BULK FILE LOCATION BDO DATA ANALYTICS ROBOTICS DOCUMENT ANALYTICS Convert Analyze Report ANALYSIS INCLUDES: Pre-defined Search Terms and Categorizations Identify Structured Data (tables) REPORTING & ANALYTICS UPLOAD PORTAL 26 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

27 Robotic process automation CLIENT SUCCESS STORIES ABOUT THE CLIENT ENGAGEMENT BACKGROUND & CHALLENGES CLIENT NEEDS CLIENT IMPACT FRANCHISE A franchisor of laundromat facilities had multiple locations, each with a different instance of a point of sale system. They needed to pull data from each system on a daily basis, aggregate it, and report on it in real time. Their current process required manual logging into each system, running individual reports, and combining each for additional reporting to management. The process took three to four hours every day. This task would become impossible as they grew from four locations to 200 locations in the next year. BDO was asked to develop an automated solution that could pull reports from each location and aggregate the data in one place for accurate and efficient reporting. This process needed to be efficient enough to also be deployed to all new locations as they opened. Our bot captured the necessary data and was able to run in the background overnight. The bot allowed management to focus on decisions they could now make in real time about the business. It also allowed them to add more locations easily to the process without needing additional resources. This resulted in an estimated savings of $200,000 per year. MANUFACTURER Our client recognized that the calculation for determining qualification for a specific job tax credit was extremely tedious (100+ hours) due to extensive analysis of new hire/termination activity and manual data entry using spreadsheets. BDO was tasked with creating an error-free and efficient model to automate the calculation of the credit. Our automated solution takes in payroll and HR data and is able to quickly create a summary of job tax credit opportunities for the client. This solution reduced the client s manual effort in some cases from hundreds of hours to mere minutes. This resulted in a savings of $25,000 per analysis. 27 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

28 Robotic process automation CLIENT SUCCESS STORIES ABOUT THE CLIENT ENGAGEMENT BACKGROUND & CHALLENGES CLIENT NEEDS CLIENT IMPACT RETAIL A retail client was filing returns in multiple states. As part of their process, they submitted address information to their sales tax return software. However, if the address was invalid (incorrect spelling, wrong zip code/city/state match), then the entire submission was marked as an error by the software. The client s team would then spend hours reviewing the addresses in order to identify the error so that the submission could be updated. If there was more than one inaccuracy, the team would potentially have to resubmit several times. BDO was engaged to provide an automated solution that could validate addresses and cut down on the time-consuming work of address verification. Our customized and automated solution was able to take the addresses and automatically review and fix the incorrect ones, returning a clean file with a log of what was updated. The automated solution would then resubmit on behalf of the team to the sales tax return tool. This reduced the time spent on each review to only a few minutes. The client experienced an estimated savings of $20,000 per year. MEDICAL EQUIPMENT MANUFACTURING BDO was tasked with developing an automated solution that could reduce the amount of time it took to prepare presentation material for a monthly update to their CFO. Information for their report was being pulled from multiple sources and involved a large amount of manual data entry. A major issue occurred when the numbers changed last minute and they had to quickly recreate the presentation. The client needed BDO to develop an automated solution to remove excessive manual work, specifically a solution that could recreate presentation slides quickly and at the last minute. Our automated solution saved the team 15 hours every quarter, while ensuring accuracy. It also allowed them to not only provide the update to the CFO before the quarterly deadline, but also to update it quickly if numbers changed at the last minute. Because all of the data was now being pulled together in a database, they were also able to add value to their current update by analyzing trends over time, hence creating a more insightful analysis to the CFO. This resulted in an estimated savings of $7,500 per year. 28 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

29 Getting started with artificial intelligence and analytics Assess Status Get Educated Brainstorm Governance, Employee Capabilities, IT Infrastructure 29 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

30 Data analytics tools 30 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

31 Mindbridge Ai Auditor Fraud Detection 31 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

32 Computer vision 32 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

33 Sponsorship exposure analysis 33 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

34 Tax disruption by AI Forecasting Pattern Identification and Classification Virtual Support 34 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

35 QUESTIONS? THANK YOU! 35 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

36 Presenters More than 25 years experience of broad corporate tax experience in various industries MICHAEL WILLIAMS National Practice Leader, Income Provision (ASC 740) Services & Tax Partner Extensive federal, state, and international corporate tax experience encompassing tax reporting/asc 740, tax compliance, tax planning, and tax operations. Works with companies ranging in size from large, multi-billion dollar, publicly traded companies to emerging market/growth companies Responsibility for engagements involving ASC 740, Sec. 382, R&D tax credit, transfer pricing, intellectual property planning, M&A, global structuring, etc. 36 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

37 Presenters Oversees data analytics, predictive modeling, and automation More than 15 years of experience KIRSTIE TIERNAN National Leader, Data Analytics & Automation Expertise includes big data, business intelligence, technology advisory, risk management, robotic process automation, and more Assist clients with implementation of leading edge technology solutions that prioritize process improvement and efficiency 37 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

38 Presenters Over 16 years corporate tax accounting experience, including SEC Corporations Certified implementer of ONESOURCE Tax Provision, Workflow Manager BARBARA TORZEWSKI National Leader, Tax Transformation Services Broad base of tax, accounting and tax automation experience Emphasis on ASC 740 Accounting for Income Taxes, management of all corporate tax compliance filings, ONESOURCE Tax Provision (Taxstream), ASC (FIN48) Uncertain Tax Positions and tax department process design and improvement including tax analytics services 38 TAX ANALYTICS, AUTOMATION AND ACCOUNTING

39 BDO is the brand name for BDO USA, LLP, a U.S. professional services firm providing assurance, tax, advisory and consulting services to a wide range of publicly traded and privately held companies. For more than 100 years, BDO has provided quality service through the active involvement of experienced and committed professionals. The firm serves clients through more than 60 offices and over 500 independent alliance firm locations nationwide. As an independent Member Firm of BDO International Limited, BDO serves multi-national clients through a global network of 67,700 people working out of 1,400 offices across 158 countries. BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. Material discussed is meant to provide general information and should not be acted on without professional advice tailored to your firm s individual needs BDO USA, LLP. All rights reserved. 39