An unbiased analysis research by Forrester exhibits quantifiable price financial savings, workforce effectivity beneficial properties, error discount, and enterprise advantages for a company from an automatic oblique tax software program.
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As governments all over the world begin rolling out new necessities for e-invoicing, real-time reporting, and different data-intensive tax initiatives, oblique tax compliance is turning into more and more complicated.
Getting ready to spend money on an oblique tax answer
Company tax groups which are getting ready for 2024 and past typically wish to spend money on an automatic oblique tax answer. Nevertheless, they will’t merely declare to decision-makers that efficiencies, price financial savings, and a bunch of different advantages will magically begin boosting the underside line as soon as the software program is activated.
Moderately, to make a persuasive enterprise case, tax groups should clarify:
- the place the promised efficiencies will come from
- what the return on expertise funding (ROI) goes to be
- how including such an answer will enhance departmental operations, significantly in tax and IT
- why such an funding helps the long-term pursuits of the group
However isn’t simple. Till now, corporations believed that the product would carry out as marketed. Little or no in the way in which of dependable, goal analysis on oblique tax options exists, in spite of everything, and all too many distributors have been identified to over-promise and under-deliver.
To assist present company tax groups with some goal information on how an automatic oblique tax answer may influence their group, Thomson Reuters commissioned Forrester Consulting to conduct an unbiased analysis research on the associated fee financial savings and enterprise advantages of the corporate’s ONESOURCE Oblique Tax software program. Other than commissioning the research, Thomson Reuters didn’t take part besides to offer occasional technical clarifications to Forrester’s consultants.
To be able to consider the advantages, prices, and dangers of a ONESOURCE Oblique Tax funding, Forrester carried out in depth interviews with seven ONESOURCE oblique tax clients, all of whom had transitioned from legacy tax methods. Forrester then aggregated the outcomes right into a “composite group” as an instance its findings.
This “composite” company was outlined as a multinational conglomerate with:
- services and products in 70 international locations
- $5 billion per yr in annual income
- 28,000 workers
How are financial savings and advantages quantified?
To quantify the system’s advantages, Forrester calculated the current worth (PV) of return after three years of operation. The outcomes of the total research present that three years after deploying ONESOURCE Oblique Tax, the mixture firm realized complete risk-adjusted PV advantages of $3.8 million. Prices for ONESOURCE Oblique Tax implementation, licensing, and coaching had been roughly $1.74 million, leading to a internet current worth of $2.1 million.
Quantifiable financial savings got here from these 4 main areas:
- Lowered error price on invoices to beneath 1%: $2.6 million saved
- Effectivity beneficial properties for the compliance workforce: $494K saved
- Effectivity beneficial properties for oblique tax workforce: $468K saved
- Lowered IT upkeep by means of automated change updates: $297K saved
Whole Financial savings: $3.8 million
1. Lowered error price:
Probably the most apparent advantages of a cloud-based tax engine is that it improves the accuracy and consistency of oblique tax calculations. Within the Forrester research, the composite group skilled an bill error price of three% utilizing guide legacy methods. ONESOURCE Oblique Tax decreased the bill error price to lower than 1%, considerably lowering the period of time tax groups needed to spend investigating bill errors.
2. Compliance efficiencies:
Within the research, contributors reported that the cloud-based structure of ONESOURCE Oblique Tax offered tax groups with a centralized platform for monitoring and managing compliance. Moreover, the built-in reporting capabilities and automatic exemption certificates administration decreased the compliance workforce’s workload by 50% in comparison with their legacy system, permitting three full-time workers (FTEs) to dedicate their time to higher-value duties.
3. Oblique tax workforce efficiencies:
Utilizing a centralized platform to handle oblique taxes offered quite a few efficiencies for the oblique tax workforce, significantly in day-to-day duties akin to pulling stories, working with auditors, and submitting taxes. The worldwide attain of ONESOURCE Oblique Tax additionally made it simpler to roll out new services and products in new markets, and considerably decreased the complexity of buying and assimilating new companies. Automation made all these duties easier, lowering the tax workforce’s workload by roughly 50%, and, much like compliance, permitting three FTEs to shift their consideration to extra strategic areas of the enterprise.
4. IT assist and upkeep efficiencies:
For IT groups engaged on legacy methods, maintaining with the newest world tax price and regulatory code modifications is an especially labor-intensive process susceptible to errors. However as a result of ONESOURCE Oblique Tax routinely updates and applies tax and code modifications much more precisely than a human being might, there isn’t any want for IT to spend its time monitoring these modifications, performing upkeep, or testing new guidelines for accuracy. In reality, Forrester discovered the composite group utilizing oblique tax saved 4,800 hours (the equal of over two full-time workers) of IT personnel time per yr.
See how you could profit from an automatic gross sales, use, and world tax answer with our financial savings calculator.
Unquantified advantages of oblique tax software program
Along with the quantifiable financial savings and efficiencies detailed in Forrester’s analysis, a number of unquantified (but nonetheless tangible and beneficial) advantages accrued to the tax workforce’s research, primarily as a result of accuracy and reliability of the general ONESOURCE Oblique Tax system.
Amongst these advantages had been:
- Lowered danger of errors, violations, and over-or under-payments
- Lowered time to worth when introducing merchandise/providers to new markets
- Improved uptime and reliability in comparison with legacy methods
- Lowered prices associated to legacy tax options (computer systems, licenses, and so forth.)
- Peace of thoughts understanding calculations are correct and now not topic to human error
That is the primary in a sequence of three blogs offering company tax groups with concrete information and methods for evaluating the potential efficacy of an automatic oblique tax answer of their group. Obtain the full Forrester Consulting research.
