The Right Tool for the Job

Tax departments need to be very creative and adaptive these days.  They also are now getting exceptionally skillful in utilizing technology for the many different tax data access, manipulation, transformation, calculation and analysis needs.  However, not every technology solution is the right one for the job.  I would contend that many tax professionals are utilizing solutions to accomplish tasks, however they may not be doing it the most effective and efficient way.  There are pre-packaged solutions as well as your everyday toolsets that tax professionals have at their fingertips.  Things such as Excel, MS Access, MS SQL Server, Adobe, Crystal Reports, MS SharePoint, and many others. Let’s focus on data collection, data manipulation, reporting and analysis…The first thing you need to do is to ask yourself some basic questions:

1. How much data will you be pulling, manipulating, and how often?
2. What is the source and location of the data, and how can you access it?
3. What types of data are you managing?
4. What do you want to do with the data?  Are you mapping, transforming, cleaning up the data?
5. Will the data be accessed by multiple users?  Will those users be accessing concurrently?  How many users?
6. How important is the security of the data?  Are different roles or access controls needed?
7. How important is data integrity?
8. How complex are your calculations needs?
9. Do you need to do ad hoc reporting and analysis of that data?  Do you need to do multi-dimensional analysis?
10. Do you need a web interface or solution?

Depending upon what you need to do, why and how you need to do it, you need to select the right tool for the job.  Every tax department already uses Excel every day. In fact, every tax department I have ever worked with typically utilizes hundreds of spreadsheets for simple to complex tax department needs.  And I don’t think that will ever go away completely in my life time.  As well it shouldn’t until a better solution comes along.   Just make sure that you are using it for what it is really good for.

Excel is an excellent solution for the following:

• Creating import/export files (from and to GL systems and compliance solutions)
• Storing and manipulating data…now Excel 2007 can support millions of rows of records
• Dealing with date formatting and data validation, fantastic at helping users “clean up” data
• You can also create formulas and macros very easily (and goodness knows how many calculations we need to perform offline from our normal compliance solutions)
• Creates PivotTables and PivotCharts – creating a bit more multi-dimensionality
• Able to use Excel Plug Ins and Add Ins to access other relational data stores to pull, report and manipulate the data for tax needs

However, don’t forget, that you should not be using Excel for everything!

Access can be utilized more effectively for the following:

• Creating a relational data store for easier querying, reporting and analysis (one to many relationships, many to many, and many to one relationships)
• Powerful queries
• More sophisticated calculations and data transformation (i.e. tax sensitization, apportionment, Sect. 199, FIN 48, etc.)
• Generating reports from data and viewing them in multiple formats
• To easily create user interfaces/forms to add, change, delete and navigate easily through your tax data
• Creating mail merges to mass produce address labels or mailings
• Handling long text strings and larger amounts of data
• Better for multi-user access, but not as efficient as MS SQL Server

Access is more suited for desktop use with a small number of users accessing it simultaneously. You may want to use Access over MS SQL Server because of compatibility/sharing. You also might need to email someone a copy of your database, which is much easier done in Access than SQL. People are more likely to have Access on their desktop computer than SQL Server. Whereas, you’ll typically only find SQL Server on developers’ computers/servers or on production server machines, unless you have folks in tax that are particularly technically savvy.

However, SQL Server is a more robust database management system. SQL Server is designed to have many hundreds, or even thousands of users accessing it at any point in time. Microsoft Access on the other hand, doesn’t handle this type of load very well.  In fact, it can become easily corrupted if over used or “over taxed” so to speak…you may not want to rely on it to track and calc data over many years and expect it to be there for you for audit response.

This makes SQL Server perfectly suited for database driven applications and websites.  It is highly recommended that you do NOT use Access for a database driven websites – unless you have a very small amount of traffic . Even then, you may find yourself getting errors due to multiple users trying to access the database at the same time.

SQL Server also contains some advanced database administration tools that enable organisations to manipulate and transform data more efficiently, to schedule tasks, receive alerts, add more complex functionality, configure security accounts/roles, transfer data between other disparate sources, and much more.   However, when you get into SQL Server, you will need IT or technology assistance in most cases.  Therefore, this will take a bit more planning and cost.  So, just think about the job you are trying to do, and choose the right tool for the job!  Other than packaged solutions, what are you using in your tax department.  Share.  We would love to hear.