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Analysis reveals financial savings and ROI of oblique tax know-how

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How an automatic oblique tax know-how could make a big influence on the group’s bill accuracy, the tax division’s effectivity, and total profitability.

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Causes to spend money on automated IDT software program

Company tax departments perceive the worth of an automatic oblique tax software program. The principle advantages are:  

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1—It’s going to get monetary savings by: 

2—It’s going to shield the group towards: 

  • fines and penalties for being out of compliance 
  • the reputational dangers of being penalized or sanctioned
  • errors and violations related to out-of-date tax charges and codes 

3—It’s going to save time, permitting tax groups to: 

  • conduct extra forward-looking types of knowledge evaluation 
  • contribute extra strategic and significant enterprise intelligence 
  • make sure that reporting deadlines are by no means missed 
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4—It’s going to make the group extra aggressive by: 

  • facilitating smarter and extra strategic decision-making 
  • introducing a number of workflows and course of efficiencies 
  • enabling simpler know-how transitions throughout mergers and acquisitions 

With a purpose to make the pitch for an automatic oblique tax know-how, tax departments typically want knowledge supporting the enterprise advantages.

How do you quantify the advantages of oblique tax know-how? 

Choice-makers need to know the way the promised efficiencies and advantages can be achieved, and what the timeline for profitability will seem like after the preliminary tax know-how funding.

With a purpose to assist company tax groups illustrate the potential price financial savings and enterprise benefits for his or her group, Thomson Reuters commissioned an unbiased analysis examine from Forrester Consulting on the price financial savings and enterprise advantages of ONESOURCE Oblique Tax, the cloud-based tax engine from Thomson Reuters. 

Forrester performed intensive interviews with seven ONESOURCE Oblique Tax clients, then aggregated the outcomes right into a “composite group” for instance its findings. Each firm is totally different, in fact, however for the sake of comparability, Forrester’s “composite” company is a multinational company that sells services and products in 70 international locations, generates $5 billion in income, and has 28,000 staff. 

Forrester discovered that over the course of three years, this composite group skilled advantages of $3.8 million towards an implementation price of $1.7 million, leading to a return on funding (ROI) of 120% and a web current worth of $2.1 million. Moreover, Forrester Consulting discovered that the ONESOURCE oblique tax system, after which the positive aspects accumulate accordingly. 

Forrester knowledge reveals price financial savings and ROI 

1—Improved accuracy 

Tax automation considerably reduces bill error charges, in addition to the period of time required to right errors. For instance, in Forrester’s analysis, the composite group had an error price of three% utilizing legacy programs. After implementation of ONESOURCE Oblique Tax, the error price fell to properly beneath 1%, leading to financial savings of $2.6 million over three years. All of ONESOURCE’s oblique tax charges are repeatedly up to date and calculated routinely. 

2—Improved effectivity

A centralized, cloud-based, international resolution supplies efficiencies by giving tax groups a single platform to trace and handle their work. As well as, the only platform simplifies workflows, facilitates smoother inter-departmental communications, and makes quite a few on a regular basis processes much less time-consuming. 

For instance, Forrester Consulting’s  analysis discovered {that a} cloud-based resolution can cut back the workload of compliance groups by roughly 50% by introducing course of efficiencies and by using such capabilities as built-in reporting and automated certificates administration. Oblique tax groups can notice an analogous workload discount by the extra environment friendly dealing with of on a regular basis duties similar to pulling experiences, working with auditors, and submitting taxes. 

Within the composite group from the Forrester examine, effectivity positive aspects for the compliance and tax groups resulted in financial savings of $493.8K and $468.1K respectively. In every case, the time financial savings enabled three full-time staff from every crew to reallocate their time to higher-value duties similar to forward-looking knowledge evaluation, threat administration, and strategic intelligence. 

3—Much less upkeep and trouble 

On legacy programs, protecting monitor of tax price and regulatory code adjustments in a number of international locations is time-consuming work usually dealt with by IT groups. If handbook entry is concerned, errors can simply creep in, leading to over- or under-payments, compliance violations, and potential fines or different penalties. 

ONESOURCE Oblique Tax solves this downside by monitoring international price and code adjustments and implementing them routinely, thereby enhancing accuracy and eliminating the necessity for IT personnel to observe and replace the system. For the composite firm, Forrester estimated that 4,800 hours in years 1, 2, and three had been saved leading to financial savings in IT assist prices and upkeep of $297.1K. 

Add all of it up, and you’ve got: 

  • Whole advantages over three years: $3.8 million 
  • Whole prices for implementation, licensing, upkeep, and coaching: $1.7 million 
  • Web Current Worth: $2.1 million
  • ROI: 120%

See how you might profit from an automatic gross sales, use, and international tax resolution with our financial savings calculator

Extra enterprise advantages from oblique tax software program 

When making the ultimate pitch for a tax automation system, bear in mind additionally that tax automation gives different advantages that could be tougher to quantify, however are extraordinarily beneficial nonetheless. In Forrester Consulting’s analysis, the tax groups studied cited quite a few such advantages, due primarily to the accuracy and reliability of the ONESOURCE Oblique Tax system total. 

Amongst these advantages had been: 

  • Diminished time to worth when introducing merchandise/companies to new markets 
  • Improved up time and reliability in comparison with legacy programs
  • Smoother know-how transitions throughout M&A exercise
  • Diminished prices associated to legacy tax options (computer systems, licenses, and so on.)
  • Peace of thoughts realizing calculations are correct and now not topic to human error 

For a extra in-depth take a look at Forrester Consulting’s unbiased analysis on the prices and advantages of ONESOURCE IDT’s tax automation platform, obtain the total examine.

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