These days, tax departments at Kentucky businesses and their service providers, including accounting and consulting support firms, are being asked to accomplish more with fewer resources. This means turning to increased automation in tax processes, internal artificial intelligence tools, more data analytics in day-to-day operations, and increased data wrangling into data visualization tools.
Adapting to changes in tax laws like the global minimum tax—also known as Pillar Two—necessitates looking at how to raise the bar on efficiencies and productivity through the year, says Louisville-based Colin Delaney, managing director of the Tax Technology Consulting practice for Deloitte Tax LLP.
Pillar Two provides for a global minimum tax on the earnings of large multinational businesses, changing the playing field for U.S. businesses and leveling out the bottom in corporate income tax rates.
“Data visualization can help tax departments more easily identify high risk areas and analyze trends over time,” Delaney explains.
An example of a data visualization would be a dashboard report with a clickable world map that shows tax rates by country, with functionality to drill down to the specific entities and tax adjustments driving each effective tax rate.
“Our role in accounting overall, as a company, is advancing more deeply into data management, more on the consulting nature of our business, not just directly implementing cutting-edge technology specifically for tax compliance,” said Kevin Fuqua, a partner and tax services team leader at MCM CPAs and Advisors, which serves clients across Kentucky, Ohio and Indiana.
MCM CPAs and Advisors is currently looking into developing bots and templates of its own and has seen its internal tech budget for innovative processes increase by about 10% year over year in the last five years.
The firm has approximately 400 employees in six offices serving about 10,000 clients.
In recent years, Strothman & Co. team leaders have begun to use Power BI, an interactive data visualization software product developed by Microsoft. The Louisville company has hired a data analytics specialist to lead this effort.
“This makes us more efficient as a company and helps our teams translate numbers into financial planning,” said Neil Zinser, a partner at Strothman & Co.
Internal tech developments are becoming increasingly prevalent. Deloitte Tax, for example, has built a tool called MyInsight CE that functions as a tax portal for tax departments. It facilitates workflow and task management by tracking various taxes’ internal and external due dates, storing documents, and facilitating data wrangling with dashboard reporting.
Delaney said the Deloitte Tax team believes it fosters effective collaboration across the tax and finance departments, which is more important than ever in remote and hybrid work environments, Delaney said.