Whether it is a multinational organisation or SME business, it is usually the tax department which adopts change last. This statement may have been true in the past, but in recent times tax departments have been at the cutting edge of technology transformation with the aim of reducing close times, handling multiple stakeholders more efficiently and collecting reams of data more accurately and with less touch points.
What has driven the move to technology? The trend in the last few years has been leaner tax teams, though no reduction in emphasis on tax compliance. Global trends in tax compliance and transparency have also driven the growing desire of businesses to consume more information faster and push out that information in meaningful reporting to a multitude of internal and external stakeholders. This has impacted the way the tax department delivers and reports on information, driving the shift of the tax accountant to embrace technology as a partner to the business.
A change within the ATO – ‘The ideal experience’
There is a change occurring within the ATO as well. There has been a recognition that the ATO can no longer aim to just meet taxpayer needs, it needs to exceed taxpayer expectations in light of the changes in the current landscape on information transparency and shifts in local and global reporting requirements. This ‘re-branding’ of sorts is shaped around building a better understanding of taxpayer risk profiles and providing a new level of service that challenges the ATO’s traditional perception that ‘every taxpayer is a risk’.
It understands that to achieve this goal, a significant transformation of its internal process needs to occur. Delivery of integrated solutions and service have been identified as being paramount to achieving a more informed and better serviced taxpayer community.
It has been identified that collaboration and putting the customer first should not be viewed as askew with tax collection. Instead, it is recognised a more open attitude towards risk can drive improved voluntary compliance and greater transparency amongst the Australian taxpayer base. Resultantly the ATO has been driving a cultural shift within its ranks with the goal to improve service experience and also to meet the Australian taxpayer community with sensible risk management.
One pillar of this cultural change is what it calls smarter data. Smarter data is focused on meeting the needs of the taxpayer community faster and with more agility to create an environment that fosters voluntary compliance. This pillar leverages technology as a gateway to connect taxpayers using integrated systems that ‘just work’. The clear objective of the ATO’s Blueprint for Change document is the strategy to become more connected and less bureaucratic.
Ultimately, the aim is to present a confident image that the ATO is asking for the right information and acting on it in a timely manner, while on the flipside the taxpayer also understands what is expected from them. To quote the Blueprint for change document directly, ‘services through software ensures the right advice ‘just happens’ and reduces costs for clients of all sizes’.
Doing business better using technology
For Australian companies, technology has become strategic; it is no longer solely the realm of the IT department. Tax and finance teams are coming to the table to understand how they can benefit from technology and how their business can align more closely with peer organisations and the ATO. To achieve this, tax teams are evaluating their staff, processes, technology and data to reduce costs and time and looking for opportunities to work smarter.
Collecting information and reporting on taxes becomes infinitely easier when users aren’t spending time verifying and/or chasing down that information in a risk review or audit situation. Technology has become a significant part of integrated tax and finance teams because it has been acknowledged that accurate and timely information is hindered where that same data is hidden in emails, in complex formulas in MS Excel and on pieces of paper.
The transformation pathway
The ATO has set out a tailored engagement profile which identifies taxpayer ‘touch’ based on deemed indicators of risk. As part of improved voluntary compliance and the push to greater communication and transparency, the use of systems and software which assist companies to improve internal process and also the robustness of data reported on, define the ATO’s new program.
While the strategy has been set, it is up to both the ATO and the taxpayer community to find a common ground where they can work together to achieve a mutually agreeable result. Being highly connected and aligned to the goals and needs of both the ATO and the customers we serve, Thomson Reuters tax and accounting solutions are laying the foundation for tax and finance teams to build better processes and improve the way they report and push out data to stakeholders, including the ATO. For more information on how your team can leverage tailored compliance solutions click here or contact us on 1800 074 333.