The National Multistate Tax Symposium West Move forward with confidence State implications of tax reform. April 30-May 2, 2018

Transcription

1 The National Multistate Tax Symposium West Move forward with confidence State implications of tax reform April 30-May 2, 2018

2 Emerging technologies and tax reform Keeping your tax department current Jennifer Deutsch, Deloitte Tax LLP Andy Gold, Deloitte Tax LLP May 2, 2018

3 Agenda Introduction Transforming Impacts on State Tax Moving From the Art of the Possible to what is Actually Possible Your Path Forward Q&A 3

4 Transforming the tax function through data and technology 4

5 The impact of technology We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before. World Economic Forum,

6 Drivers of disruption and innovation 6

7 Trends that are reshaping our business (and tax) landscape Explosion of data Next Gen regulatory environment Improved technology Greater global footprint Business innovation 7

8 Technology & data analytics How could it help me address common pain points? Increasing volume of data, often from multiple sources Administrative burden Quick access to transactional level data Manual process Inefficiencies Impact of law changes Reliance on field for data Ability to forecast Same sets of data are being analyzed on a recurring basis Challenges with relying on IT for data State-bystate complexity Data doesn t reconcile Compliance focused vs strategic partner Data requires a lot of sorting, pivot tables, and filtering Not viewed as value add Ability to substantiate Inability to get at data to evaluate planning alternatives Errors have popped up due to missing or misunderstood data Lack of accuracy Too much time spent manipulating data 8

9 Tax trends & technology Tax department trends Related emerging technologies Data management & process automation Big Data Disparate systems Need for speed Global integration Analytics Robotic Process Automation (RPA) Optical Character Recognition (OCR) Regulatory changes & scenario planning Extract Transform Load ( ETL ) solutions Suite expectations Cognitive computing 9

10 Technology & Data Analytics A Frequently Travelled Journey Case Study Aligning with IT Understanding the Technology Building a Roadmap Focus on Impact The Case for Change 10

11 Moving from the art of the possible Technology applied in practice 11

12 State tax analytics / dashboards 12

13 State apportionment Analytics dashboard Activity Map and KPIs for Sales, Property, and Payroll Interactive Search & Filtering Drill-Down into detail by Entity, Account, State, and Location 13

14 Data Analytics Tool State profile heat map 14

15 State tax analytics Illustrated (indirect tax) 15

16 State tax analytics Illustrated (indirect tax) 16

17 Analytics Experiences Challenges & Benefits CHALLENGES Getting at the data Access to technology platform(s) Leveraging experienced resources Understanding where to start Cost BENEFITS Ability to leverage for insights Getting behind errors / improve accuracy Effective communication tool Drives fact based action / outcomes 17

18 Cognitive technologies Simulating perceptual and cognitive skills to perform tasks only humans used to be able to do Planning & scheduling Knowledge representation & reasoning Machine learning Speech recognition Computer vision Natural language processing Robotics 18

19 RPA: What Is It? Robotic process automation (RPA) software provides advanced macro-like capabilities that can be deployed at an enterprise or business unit level What It Is What It Is Not What It Can Do Computer coded software Cheaper and faster way to automate processes Physical hardware A multi-year technology deployment Open, read and create s Log into enterprise apps Move files & folders Copy / paste Pull data from the web Obtain human input via / workflow Make calculations Extract data from docs Cross-functional, crossapplication macros Artificial Intelligence Fill in forms Read / write to DB s Collect statistics Follow decision rules Benefits Lower Labor Costs Increased Process Throughput Improved Process Quality Market Trends* 76% of Shared Service leaders plan to pursue RPA within the next year; those who have piloted or implemented at scale expect significant benefit Survey Question: Do you think RPA will deliver significant financial benefits for your operation? Greater Delivery Model Flexibility Better Scalability 63% 37% 82% 18% 100% 100% Better Payback / ROI Relatively Cost to Implement Heard About RPA Investigated RPA Piloted RPA Implemented RPA at Scale Yes No * Source: July 2016 Deloitte survey of 143 global Shared Services leaders 19

20 Preferred Characteristics Requirements What Type Of Processes Are Fit For RPA? Performed on a computer Robots know how to mimic mouse & keyboard inputs They are less effective with handwritten papers / scanned PDFs Predictable & based on clear business rules Processes you can translate to if-then logic Robots cannot replace abstract human judgment or intelligence Limited exception handling Processes with little business exceptions are excellent candidates More complex process are fit as well, but require some level of process redesign High transaction volume / value High volume processes usually means you can save on more FTEs High value transactions or level of impact of errors on revenue / cost can meet expected ROI even if they are at low volumes Multiple system used Automating processes performed on multiple systems is usually a pain point when considering traditional automation means, but is a sweet spot for the robots Significant manual labor Processes with little automation support at the current state, and with large chunks of manual work involved, are excellent candidates 20

21 Automation opportunities in tax Tax is a common place for companies to first invest in Robotic Process Automation Automation Opportunities in Tax State and Local Compliance Federal Compliance International Tax & Transfer Pricing Estimated Payments Transfer data from provision to tax systems Rollover workpapers Tax Account Mapping Fixed Asset Reporting Allocations Processing E&P Adjustment Import Local Country Reporting Annual Reports Calendar / Reminders Intercompany Reporting Load tax adjustments to software Reconciliations Consolidation Upload TBs, other data Income Sourcing/ Basketing Refresh federal income Apportionment Factors Intercompany Transaction Processing Data Gathering Add attachments to efile Journal Entries Transactional Filings (stmts) Add new entity Indirect Taxes Partnerships Provision / Tax Accounting Data Management Data Collection Reconcile between G/L and tax engine K-1 Compilation Review Tax Packages Trial Balance Extracts / Imports Complete Tax Packages Monitoring Workflows for Status / Reminders Document Archival Procedures Preparation of Tax Forms VAT: Process Invoice K-1 Data Extraction Journal Entries Calculate Adjustments Reporting Package Preparation Managing master data Exemption certificate maintenance Check requests Investor PDF Package Creation Data Gathering Fx Rates Backup Opportunity for Automation None to Low Medium High 21

22 RPA tax examples Indirect tax compliance sub processes E-filing prepare E-filing packages Use tax reconciliation Pulling invoices Tax provision sub processes Direct tax compliance sub processes And more. 22

23 PERSON BOT RPA in action Direct tax DATA COLLECTION & MANAGEMENT Gather, reformat, and move data; monitor submission; maintain data and systems RECONCILIATION Perform reconciliations between source data and calculations; identify anomalies to focus human review CALCULATION/ RETURN PROCESSING Execute calculations in Microsoft Excel and/or tax systems REPORTING Extract and manipulate data for internal and external reporting purposes E-FILING Generate returns for e-filling and run e-file diagnostics Launch data collection packages; load GL data Monitor inbox or portal for receipt of data Push completed tax adjustments into tax system Master data updates across systems Workflow updates and document management Monitor updates to GL data Perform validation tests various data elements (state apportionment, fixed assets) Complete tax account reconciliations Notify user of reconciliation exceptions Run macros to calculate tax adjustments in Microsoft Excel Perform processing steps in tax software, such as consolidation Extract data from tax systems to finalize documentation Maintain updated reporting packages during close cycle Populate management reporting packages Save final files and reports in designated location Notify user reports are available/publish reports to portal Monitor workflow for completed returns Generate returns and run e- file diagnostics Attach files to specific returns Identify errors and notify users Review resulting files Review any issues Perform analytic review of resulting calculations Review resulting reports Review any issues Action those items manually or via bot Complete complex/judgement-based calculation elements Action those items manually or via bot 23

24 PERSON BOT RPA in action Indirect tax RECONCILIATION Create sales and use tax data files from ERP and tax software to perform a reconciliation CALCULATION/ RETURN PROCESSING Extract, validate, and cleanse data from source systems to prepare sales, use, or excise tax returns E-FILING e-file monthly sales and use tax returns in local jurisdictions DATA COLLECTION & MANAGEMENT Maintain customer codes in tax software and confirm synchronization with ERP REPORTING Extract, validate, and control total data for audit; identify anomalies in order to address in advance Query ERP database and save data in Microsoft Excel Gather data from source systems Extract information from calendar or filing preparation spreadsheet Create Microsoft Excel file with Customer and Exemption Certificates Gather data from ERP, filing calendar, and returns database Query tax software database and save data in Microsoft Excel Compare data between ERP and tax software; algorithms Notify users about reconciliation exceptions Validate and cleanse data Perform calculations or validations Convert into format required for transmission/mailing Load data file or create form Submit return information using state s e-file website Generate confirmation Document in calendar for audit trail Create Customer in tax software Create Exemption Certificates in tax software Identify errors and send to super user via Run compare queries and various calculations on the data to identify errors and anomalies Initiate workflow to route anomalies to key individuals for review and input Review exceptions Review any issues Review any issues Review any issues Review any issues Action those items manually or via bot Action those items manually or via bot Action those items manually or via bot 24

25 Realizing Value from RPA: More Than Just Building Robots Building robots is only the start to deriving true value from an automation program Value Bot Development Only Approach Automation Barrier to Realizing Value Efficiency Deloitte s Comprehensive Approach to RPA Automation Key RPA Decisions, Impacts, & Considerations Operating Model How are roles and responsibilities being shifted? Who is accountable? Financial Analysis & Decisions What are the implementation costs? Who is funding? Governance Who manages exceptions and escalations? Who makes key decisions? Labor Impact Who is impacted? What is the future for those resources? What training is required? Process Redesign How does a process need to change to drive savings, improved accuracy and/or the shift of resources to higher value work? Improved Quality & Accuracy Resource Shift To Higher Value Work 25

26 What is Data Wrangling? Data Wrangling is the process of retrieving raw data and making it useful for analysis and reporting 2 Benefits of Data Wrangling 1 Extraction Staging and Preparation Integration Layer Analysis 3 Automation Integration Data Accessibility Autonomy Data detail Data reconciliation Applicability of Data Wrangling Provide seamless workflow across modules to simplify user experience Apportionment Compliance Provision Indirect Tax 26

27 Data Wrangling Considerations What is needed vs what is available Where located How can I get it Data extraction techniques/technology how can it help? 27

28 Framework and functionality of our portal Search & versioning Knowledge management Forms framework Document management & s Tracker & notes Transfer pricing Knowledge /social Tax calendar Audit Management Direct compliance /provision Master/ General Ledger data Indirect taxes Operational data Insurance Data management Data collection/ surveys Security Workflow Dashboards Analytics Master Data 28

29 Cognitive technology Indirect tax use case The tool uses machine learning to develop artificial intelligence. Robust Insight Generation Raw Data Data Cleansing Taxability Insights Opportunity Client Raw Data Import Consolidation and Data Mapping Taxability Identification & Validation Interactive & Predictive Insight Generation Savings Considerations Identification / Prioritization Machine Learning Process User interacts with data and validates taxability decision Structured Data GL, AP, EDI, and other structured data Non-Structured Data Invoices, PO s, contracts, etc. Hypothesis Validation Tool gains artificial intelligence through taxability validation of the structured data and OCRcaptured data to enable faster and smarter insight generation 29

30 Getting started 30

31 Leveraging the power of data and technology Some ways to get started `Identify Pain Points Standardize processes Data health check Assess the Art of the Possible Develop automated data solution Apply data analytics Explore opportunities to apply artificial intelligence 31

32 Questions? 32

33 Contact information Jennifer Deutsch Deloitte Tax LLP Andy Gold Deloitte Tax LLP 33

34 This presentation contains general information only and Deloitte is not, by means of this presentation, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this presentation. 34

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