Robert Kugel's Analyst Perspectives

Transforming Tax Departments into Strategic Entities

Posted by Robert Kugel on Feb 1, 2016 8:26:11 AM

The steady march of technology’s ability to handle ever more complicated tasks has been a constant since the beginning of the information age in the 1950s. Initially, computers in business were used to automate simple clerical functions, but as systems have become more capable, information technology has been able to substitute for increasingly higher levels of human skill and experience. A turning point of sorts was reached in the 1990s when ERP, business intelligence and business process automation software reduced the need for middle managers. Increasingly, organizations used software to coordinate activities as well as communicate results and requirements up and down the organizational chart. Both were once the exclusive role of the middle manager. Consequently, almost every for-profit organization eliminated management layers so that today corporate structures are flatter than they once were. Technology automation also eliminated the need for administrative staff to perform routine reporting and analysis. Meanwhile, over the course of the 1990s, the cost of running the finance department measured as a percentage of sales was cut almost in half as a result of eliminating staff and because automation enabled companies to scale without adding headcount. During the last recession, companies in North America and Europe once again made deep reductions to their administrative staffs, relying on information technology to pick up the slack.

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Topics: Sustainability, ERP, GRC, audit, finance transformation, Human Capital, legal, LongView, Tax, tax compliance, tax department, tax optimization, tax planning, Analytics, Business Analytics, Governance, Risk & Compliance (GRC), Oracle, Business Performance Management (BPM), CFO, Financial Performance Management (FPM), Vertex, FPM, Innovation Awards, international tax, Thomson-Reuters multinational

Giving Tax Departments More Corporate Clout

Posted by Ventana Research on Feb 17, 2015 8:03:45 PM

One of the issues in handling the tax function in business, especially where it involves direct (income) taxes, is the technical expertise required. At the more senior levels, practitioners must be knowledgeable about accounting and tax law. In multinational corporations, understanding differences between accounting and legal structures in various localities and their effects on tax liabilities requires more knowledge. Yet when I began to study the structures of corporate tax departments, I was struck by the scarcity of senior-level titles in them. This may reflect the low profile of the department in most companies and the tactical nature of the work it has performed. Advances in information technology have the potential to automate most of the manual tasks tax professionals perform. This increase in efficiency will enable tax departments to fill a more strategic, important role in the companies they serve.

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Topics: Big Data, ERP, GRC, audit, finance transformation, legal, LongView, Tax, tax compliance, tax department, tax optimization, tax planning, Analytics, Business Analytics, Governance, Risk & Compliance (GRC), Oracle, Business Performance Management (BPM), CFO, Financial Performance Management (FPM), Information Management (IM), Vertex, FPM, Innovation Awards, international tax, Thomson-Reuters multinational

Giving Tax Departments More Corporate Clout

Posted by Ventana Research on Feb 17, 2015 7:58:00 PM

One of the issues in handling the tax function in business, especially where it involves direct (income) taxes, is the technical expertise required. At the more senior levels, practitioners must be knowledgeable about accounting and tax law. In multinational corporations, understanding differences between accounting and legal structures in various localities and their effects on tax liabilities requires more knowledge. Yet when I began to study the structures of corporate tax departments, I was struck by the scarcity of senior-level titles in them. This may reflect the low profile of the department in most companies and the tactical nature of the work it has performed. Advances in information technology have the potential to automate most of the manual tasks tax professionals perform. This increase in efficiency will enable tax departments to fill a more strategic, important role in the companies they serve.

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Topics: Big Data, ERP, GRC, audit, finance transformation, legal, LongView, Tax, tax compliance, tax department, tax optimization, tax planning, Analytics, Business Analytics, Governance, Risk & Compliance (GRC), Oracle, Business Performance Management (BPM), CFO, Financial Performance Management (FPM), Information Management (IM), Vertex, FPM, Innovation Awards, international tax, Thomson-Reuters multinational

Tax Data Warehouses Become Essential as Governments Raise the Ante

Posted by Ventana Research on Sep 3, 2014 9:20:18 PM

I’ve written before about the increasing importance of having a solid technology base for a company’s tax function, and it’s important enough for me to revisit the topic. Tax departments are entrusted with a highly sensitive and essential task in their companies. Taxes usually are the second largest corporate expense, after salaries and wages. Failure to understand this liability is expensive – either because taxes are overpaid or because of fines and interest levied for underpayment. Moreover, taxes remain a political issue, and corporations – especially larger ones – must be mindful of the reputational implications of their tax liabilities.

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Topics: ERP, GRC, audit, finance transformation, legal, LongView, Tax, tax compliance, tax department, tax optimization, tax planning, Analytics, Business Analytics, Oracle, Uncategorized, CFO, Vertex, FPM, Innovation Awards, international tax, Thomson-Reuters multinational

Longview Tax Software Helps Tax Departments Be More Strategic

Posted by Robert Kugel on Jun 22, 2014 10:40:32 PM

Longview Solutions has a longstanding presence in the financial performance management (FPM) software market and was rated a Hot vendor in our most recent FPM Value Index. Several years ago it began offering a tax provision and planning application. I think it’s worthwhile to focus on the tax category because it’s less well known than others in finance and is an engine of growth for Longview. We expect larger corporations increasingly to adopt software to manage direct (income) taxes to improve the quality and efficiency of what today in most companies is an inefficient, spreadsheet-driven process.

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Topics: ERP, GRC, audit, finance transformation, legal, LongView, multinational, Tax, tax compliance, tax department, tax optimization, tax planning, Analytics, Business Analytics, Governance, Risk & Compliance (GRC), Business Performance Management (BPM), CFO, Financial Performance Management (FPM), FPM, Innovation Awards, international tax

Finance Can Get a Big Advantage from Big Data

Posted by Robert Kugel on Nov 16, 2013 8:22:39 AM

All the hubbub around big data and analytics has many senior finance executives wondering what the big deal is and what they should do about it. It can be especially confusing because much of what’s covered and discussed on this topic is geared toward technologists and others working outside of Finance, in areas such as sales, marketing and risk management. But finance executives need to position their organization to harness this technology to support the strategic goals of their company. To do so, they must have clarity as to what big data can do, what they want it to do, and what skills and tools they need to meet their objectives.

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Topics: Big Data, Performance Management, Predictive Analytics, Fraud, Governance, GRC, audit, Controller, process, Analytics, Business Analytics, Cloud Computing, Governance, Risk & Compliance (GRC), Operational Intelligence, Accounting, Business Performance Management (BPM), CFO, compliance, finance, Financial Performance Management (FPM), Information Management (IM), Risk, Financial Performance Management, financial risk management, operational risk

Vertex Enterprise Helps Tax Departments Increase Effectiveness

Posted by Robert Kugel on Sep 19, 2013 8:31:52 AM

Technology for the Office of Finance can have transformative power. Although progress has been slow at times, today’s finance organizations are fundamentally different from those of 50 years ago. For one thing, they require far fewer resources (chiefly people) to perform basic accounting, treasury and corporate finance tasks. In addition, public corporations report results sooner – sometimes weeks sooner – than they could in the mid-20th century. And finance departments are able to harness substantially more data and a wider array of analytics to promote insight and support more agile decision-making.

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Topics: ERP, GRC, audit, finance transformation, legal, multinational, Tax, tax compliance, tax department, tax optimization, tax planning, Analytics, Business Analytics, Business Intelligence (BI), Business Performance Management (BPM), CFO, Financial Performance Management (FPM), Vertex, FPM, Innovation Awards, international tax

How New Information Technology Will Transform Auditing

Posted by Robert Kugel on Apr 4, 2013 11:04:58 AM

A recent news release by Robert Half, a staffing company that specializes in accounting and finance personnel, covered what it sees as the most important attributes required for auditors in the 21st century. “7 Attributes of Highly Effective Internal Auditors” covers the people dimension of the profession and focuses on the non-technical requirements of the role, including relationship-building, teamwork, and diversity. No doubt these skills are a must for just about anybody working in a modern (Western) corporation. For me, though, the most important quality on the list is at the bottom: continuous learning. That’s because the role of internal and external auditors will be transformed radically by big data, in-memory processing and other advances in information technology that will make enterprise automated fraud discovery and mitigation a reality before the end of this decade.

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Topics: Fraud, Governance, GRC, audit, Analytics, Business Analytics, Governance, Risk & Compliance (GRC), Accounting, Business Performance Management (BPM), compliance, Financial Performance Management (FPM), Infor, Risk, HANA, Oversight Systems

SAP’s New Fraud Management Analytical Application

Posted by Robert Kugel on Apr 2, 2013 11:20:35 AM

SAP recently announced its new Fraud Management analytic applications. Currently in “controlled” (limited) release, it’s a promising start for the product and a good example of the type of business process revolution that’s possible when companies can execute complex analytics on big data sets using in-memory and other advanced processing techniques. Over the next several years a wide swath of basic corporate processes will be transformed by the shift to in-memory processing and big data technology, two key foundational elements of my office of finance research agenda. HANA has been a consistent element of SAP’s product strategy and underlies many recent new releases, such as Business Suite on HANA.

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Topics: SAP, Fraud, Governance, GRC, audit, Analytics, Business Analytics, Governance, Risk & Compliance (GRC), Accounting, Business Performance Management (BPM), compliance, Financial Performance Management (FPM), Risk, HANA, insurance

Software to Fend Off Earnings Restatements

Posted by Robert Kugel on Mar 15, 2013 9:51:03 AM

I’m wondering whether the rapid rise in earnings restatements by “accelerated filers” (companies that file their financial statements with the U.S. Securities and Exchange Commission that have a public float greater than $75 million) over the past three years is a significant trend or an interesting blip. According to a research firm, Audit Analytics, that number has grown from 153 restatements in 2009 to 245 in 2012, a 60 percent increase. What makes it a blip is that the total is still less than half the number that occurred in 2006 as the Sarbanes-Oxley Act began to take effect. As well, the number of companies restating is still less than one percent of the total. Yet it’s a blip worth paying attention to, since the consequences of a restatement pose a serious professional challenge to finance executives. The right software can help address some of the underlying causes that lead to the need to restate earnings.

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Topics: Governance, GRC, Reporting, audit, close, Consolidation, Controller, process, process management, report, Tax, tax data warehouse, tax provision, XBRL, Governance, Risk & Compliance (GRC), Accounting, Business Performance Management (BPM), CFO, compliance, Financial Performance Management (FPM), FPM, SEC