Continuous (Tax) Monitoring

Tax risk management 3.0 - Real-time and automated

The rapidly evolving global tax landscape is forcing organisations to define their Tax strategy, have processes and controls in place to monitor adherence and identify the implications of this tax strategy for their relationships with stakeholders.

External stakeholders enforce transparency and tax authorities are rapidly developing into true data wizards. The use of innovative control techniques leads to improved risk analysis and more effective monitoring.

Organisations must be in-control over processes, systems and their data continuously and at all times.

Continuous (Tax) Monitoring

Real-time monitoring of transactions

Manual testing of controls is time-consuming, sensitive to errors and often incomplete due to the use of random samples. Tax professionals spend a majority of their time focussing on repeating standardised checks rather than analysing and assessing potential tax risks. Moreover, it provides a retrospective insight that shows little about the current state. How can technology be used to monitor real-time risks continuously and to efficiently manage complex tax reporting processes real-time?

Continuous monitoring platform

Our innovative solution for Continuous Monitoring automatically monitors a wide set of processes, controls and data from various systems. We install a so-called agent - nothing more than a piece of software - within your own IT-environment. The agent continuously executes controls based on queries comprising different existing applications, systems and data sources.

How does the agent work?

For instance; the agent checks all new transactions in the database every day at 17:00 o’ clock for the following assumptions:

For every transaction where the country of origin is NLD and the place of destination is also NLD, I expect a VAT percentage HIGH.

For every transaction of which the description includes “CJIB” or “fine”, I expect a classification in the general ledger under “Non-deductible amounts for Corporate Tax”.

Only if the outcome is not in line with expectations, an exception will be reported to your personalized Continuous Monitoring Platform, which will be hosted in Microsoft Azure cloud. The agent runs on-premise, so transactional data uploads are no longer needed, the data stays in your IT environment. Only metadata about the transaction that requires attention is reported to the platform as an exception for follow-up.

Use case: Continuous Monitoring Platform

Workflow

On the platform you determine how the exceptions are handled and by whom, according to the roles and responsibilities. For example, a detected exception can lead to an email being sent to an employee, who can then start a workflow directly on the platform. In the workflow, the employee goes through a number of predetermined steps to assess the exception and to decide whether or not to approve it and start corrective measures.

Dashboard

The cloud based platform with access management and notification features offers a real-time overview of the measurements performed by the agent, the exceptions per process and control, and the (un)resolved exceptions. The platform also offers reporting options by which you can periodically inform your stakeholders, including the Tax Authority. Due to the fact that every action is logged and the audit trail is always transparent, you can provide stakeholders with a high degree of certainty that risks are mitigated effectively.

“Real-time and automated monitoring of transactions for tax risks, more certainty at lower costs!”

Fieke van der VlistPartner Quantitative Solutions

Automation of your tax management

Continuous Tax Monitoring means the automation of your tax management: your transaction flows are continuously being monitored based on underlying data sources. With our solution, insights in your data will improve and the quality of testing will increase at a high speed, while spending tax resources efficiently to mitigate risks, the challenging tax issues that can hazard your tax strategy. The solution provides a sound audit trail and efficiently-generated management information - this way, your organisation maintains top-level control over the tax processes.