How to Modernize Your Tax Workpapers Process
For decades, the tax process has centered around compliance. True, it’s an important and highly scrutinized output of the tax function, but if compliance is the endgame – what about all the work that comes before?
The focus on compliance has led to siloed workflows that result in duplicative processes and calculations. It also drove the tax technology industry to remain narrowly focused on compliance software, rather than looking at ways to improve the entire tax workflow.
All of this hampers the productivity of your tax team and increases the reliance on disparate solutions that were either designed for a specific tax deliverable – or not designed with the flexibility to handle complex tax use cases.
The problem with workpapers
For too long, tax departments have viewed their workpapers process as something they want to optimize, but they lack the time, resources, or expertise to tackle. Like having to “show your work” in math class, workpapers are essential in supporting the tax accounting and reporting process, and they provide critical proof needed during an audit.
They are also where some of the most complicated, time-consuming, and painful tax work is done. Each year, tax departments recreate or tweak their Excel-based workpapers to support the desired tax function.
However, Excel is tedious, prone to human error, devoid of controls and repeatability, and often relies on macro-based automation or extensive and complex formula-based automation – which can be very useful to minimize manual work within spreadsheets but are downright archaic in comparison to today’s technological innovations.
With no better options available, Excel has been ubiquitous for tax teams when it comes to workpapers – and tax teams are paying the price. In a 2023 survey conducted by Bloomberg Tax and Arizent, 89% of corporate tax professionals said their current workpapers process is difficult, while 92% said it’s overly time consuming.
With all this time spent wrestling with your workpapers, it’s no wonder there is little to no time left for optimization.
A better way to work
It is clear that tax departments are in need of a fresh, modern approach to simplify the workpaper creation and maintenance process – a solution that is easy to use, yet robust enough to handle the complexities inherent in the overall tax lifecycle.
Bloomberg Tax Workpapers is a first-of-its-kind solution that transforms the workpapers process. Its built-in automation helps streamline workflows, reduce errors, and, most importantly, reclaim valuable time that can be better spent on strategic, high-value tasks.
Now, let’s review the six tax processes that can be automated with Bloomberg Tax Workpapers to save time, reduce risks, and increase flexibility in your tax workpapers. (This is an excerpt from our full report, 6 Tax Processes You Can (and Should) Automate.)
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Roll forward your prior period workpapers
Automating the roll forward process minimizes manual intervention and the associated risk of errors. It also significantly reduces the time and effort involved. With Bloomberg Tax Workpapers, it’s as easy as clicking a button, and the system intelligently updates the workpapers with the new period’s data.
This capability significantly reduces the manual updates needed to create a workpaper in the new period. The roll forward automation finds and updates the formulas and links within the workpaper to the desired new period – providing the preparer a head start in constructing the new workpaper.
Likewise, reviewers can easily verify that the roll forward is complete and feel confident that the workpaper links are in place and cell-level signoffs are reset for the new period.
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Gather current period data from source systems
One of the greatest benefits of automation is the ability to plug in directly to data sources and transform them into usable formats. Bloomberg Tax Workpapers enables a secure file transfer protocol (SFTP), allowing you to pull data from ERP and GL systems directly to your workpapers.
You don’t need to recreate data cleanup steps repeatedly each year, either – or any time new data or a new trial balance becomes available. This cuts down on a significant amount of manual, repetitive work you must do every year before even getting to the tax calculation step.
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Prepare your workpapers (plug in the new data)
Technology built for tax processes can make pulling data into your workpapers much faster and smoother – not simply for same as last year (SALY) information, but also anything that has changed.
Bloomberg Tax Workpapers allows you to use a data connection to link source data directly into your workpaper calculations, simplifying preparation. This data connection process simplifies long, complex formulas and large data references that become hard to review and maintain.
If you need to make a copy of a workpaper or roll forward to the next period, you don’t have to start over and redo the linking – you simply replace the source file, and the system updates your workpapers automatically. When your workbook has 50 or more links, automation saves a significant amount of time.
Read our full report, 6 Tax Processes You Can (and Should) Automate, to learn how you can streamline tax workflows, reduce errors, and, most importantly, reclaim valuable time that can be better spent on strategic, high-value tasks.
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Confirm tax law justification
Traditionally, confirming tax law justification requires research from preparers in disparate solutions outside of where the workpapers are prepared or updated. Rates and regulations change constantly, and businesses may enter new jurisdictions, forcing you to look up new rates, dates, calculation methods, and other pertinent tax information.
With the integration of Bloomberg Tax Research, a trusted source of tax intelligence, Bloomberg Tax Workpapers makes it simple to ensure you are using the latest rates and tax law updates to inform your calculations. Built-in formulas will draw directly from expert-verified information in Bloomberg Tax Research.
This automation speeds up the tax calculation process, putting critical information right at your fingertips. Integrated intelligence also increases confidence and improves reviewability of your workpapers with embedded citations to primary source guidance and links to related Bloomberg Tax Research content, enabling deeper analysis when necessary.
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Manage signoffs for your workpaper
Bloomberg Tax Workpapers offers the flexibility and speed of a spreadsheet with controls that stand up to the rigors of a SOX audit.
Cell-level change tracking and reviews allow you to see who made changes within a cell or calculations within the workpaper. The user, the change, and the date and time are recorded and visible, eliminating the risk of unintended changes to the workpaper calculations.
Document signoff allows you to record multilevel approvals, improving the audit trail and keeping last-minute changes from bypassing the review step by highlighting any changes post-review.
Read our full report, 6 Tax Processes You Can (and Should) Automate, to learn how you can streamline tax workflows, reduce errors, and, most importantly, reclaim valuable time that can be better spent on strategic, high-value tasks.
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Send final calcs to other relevant workpapers or systems
Bloomberg Tax Workpapers’ integration capabilities allow for seamless data transfer to other relevant workpapers, enhancing consistency and efficiency.
Bloomberg Tax Workpapers also integrates with Bloomberg Tax Provision and Bloomberg Tax Fixed Assets, allowing for the direct transfer of data into these solutions. With tax tools that talk to each other and share data through key integrations, you can have confidence that everything from data gathering to calculations to reporting will be consistent and efficient.
For tax compliance, Bloomberg Tax supports exporting to Excel, offering flexibility for importing final numbers into various tax preparation solutions and other third-party software.
Going beyond a focus on compliance
To truly reap the benefits of modern technology, tax teams must look beyond compliance deliverable systems to solutions that focus on workpaper calculations. This shift in thinking will result in a more integrated, efficient, and intelligent tax workflow.
Bloomberg Tax Workpapers revamps your manual processes by automating data prep, strengthening controls, and streamlining tax calculations – all in one solution.
It also integrates with Bloomberg Tax’s full suite of solutions – purpose-built tax products that automate tedious work, minimize risk, and help put you in the best tax position possible.
Read our full report, 6 Tax Processes You Can (and Should) Automate, to learn how you can streamline tax workflows, reduce errors, and, most importantly, reclaim valuable time that can be better spent on strategic, high-value tasks.