Year-end tax reporting doesn't have to be taxing

11 November 2020

Many banks with a 31 December accounting date rapidly approaching will be preparing to dust off their tax accounting spreadsheets. For many, the year-end tax provision timetable heralds a difficult period filled with long days in the (home) office and significant amounts of stress.

Labour intensive, in-house developed tax accounting spreadsheets carry inherent risks. Our experience suggests over 83% of those currently in use contain formulae errors, broken links, or regularly crash. This is increasingly raising concerns as:

  • HMRC is asking how tax provision figures are calculated and how they link to returns following the updates to the business risk review process
  • Auditors continue to move away from substantive auditing and want assurance over the calculation model
  • As the switch over to Making tax digital (MTD), is implemented it will require more connectivity between financial systems and tax numbers.

We are regularly being asked by banks “What can I do to make my year-end better, reduce my time and risk and ensure I am comfortable with the outputs?” “What can I do now to improve things when I don’t have much time? Surely it is too late to change?”

Here are five things you should try to capture now

  1. Take a note of the number of different sources from which you receive data.
  2. Think about the nature of those sources (are these emails, do you have direct access to finance systems, do you receive trial balance feeds, do you utilise Excel add-ins or receive completed calculations from others?).
  3. How much work is required to arrive at your tax disclosure note once you’ve received the data? What is your prepare vs. review time ratio?
  4. Do your financial numbers move once you’ve started your tax calculation process, and do you always find out in time what has changed? What is the impact of those changes on your work?
  5. Do you feel like your entire tax reporting world is managed in Excel?

Improving your processes

Capturing this information now will enable you to focus the discussion you can have with our specialists. Our experienced team of banking tax and tax technology specialists understands what the technology market can provide, what the latest innovations look like, and can help you assess your circumstances and what can be leveraged to meet your immediate needs and longer term goals.

An ‘on-demand’ tax reporting solution

Because a relatively small step change can provide real tangible improvements on day one, we have developed our ‘on-demand’ tax reporting solution to be a quick fix with an integrated workflow and structured templates that gives you the feel of Excel, but the power of database technology particularly for consolidation.

Using standardised and structured BDO approved tax data collection templates fit for the complexities of banking our solution provides:

  • In-built reconciliations and validations – enter the data once and it flows through the entire model
  • Scheduled timetable for actions
  • Automated requests and follow up reminders
  • Status tracking
  • ‘Real time’ consolidated reports at your fingertips as soon as the data is submitted
  • Automated roll forward of data
  • Robust cloud based architecture which will not struggle to manage your data and means you are always working on the latest version.

As a first step into tax accounting automation, using our on demand service allows you to build best practice into all your processes and adopting it across all your reporting entities, you will be perfectly positioned for a future upgrade to an ‘Enterprise’ solution.

Please get in touch to arrange free 1:1 session with our tax process and technology team to help make your month-end and year-end process less of a challenge.