Navigating Tax Season with Entity Management Software

Financial departments start gearing up for tax season, filing annual reports, and other legally required financial reports. Increasingly, financial companies are using a new tool to help with the issues related to a regulation-heavy industry—entity management software.

Entity management collates data input from a range of sources and ensures there is only one copy of each at any time. It is ideal for financial data management since this is one area where there cannot be error or duplication. And yet, financial watchdog Deloitte reported that in 2023, a staggering 49% of reporting companies are still using Excel to manage their financial data.

Financial management is no longer simply a matter of adding and subtracting numbers in a spreadsheet. Regulatory compliance, meeting deadlines, and hitting governance goals is also critical. However, with dozens of reporting parties spread throughout the company, getting everyone’s reports in on time can be a daunting task. The answer is entity management software.

Data Integration—Not Just for IT Anymore

Talk to some people about “data management” and their eyes glaze over. But financial departments use information from every other department in assembling tax data at the end of the year, and when its time for the annual report. All data needs “managed” even if the end users don’t realize it.

Tax regulations have a habit of changing each year as new laws come online. Different departments are affected by their own suite of new regulations as well. When the financial department is tasked with creating the yearly projections or quarterly statements, they need the impact of these regulations on the department, which means pulling data from those departments. 

Entity management software creates a central data stream for finance and other departments to pull information from, and to drop their own information into. This central stream becomes a collaborative river that everyone can access. It improves communication and increases efficiency across the board. It also eliminates duplication and minimizes error.

AI’s on the Prize—Automating Paths to Success

A single data source means there’s only one of everything. Instead of discussions over who has the most recent information, finance and tax departments can coordinate with other departments on management decisions and other critical needs. Your entity management software accomplishes this feat by automating basic tasks and freeing staff for critical duties. A good system can:

• Streamline the entire process by handling rote tasks and eliminating double-checking.
• Automating compliance tracking and reporting. This can include regular checks and updates of government systems and notifying users of new requirements or deadlines.
• Company metrics in real time. Scheduled or on-demand reports on compliance status, income and outflow, and other essential financial data.
• Deadline notification avoids missed due dates. Automated tasks can be completed by the system and the user notified when the task has been accepted.
• Centralized communication and collaboration between the company and clients. Automated scheduling and calendaring means nobody misses a meeting, and virtual attendance means everyone can participate.

Preparing for Change—Getting Ready for Entity Management Software

When it’s time to get rid of Excel and install a real entity management system, there are some things you want in your new system. The first thing to look for is a robust system that can handle the amount of data your company manages. Then you need to consider these factors:

• Security. When you install a new software system or commit your data to a cloud-based storage system, security should be at the top of your mind. Take time to review the provider’s bona fides and ensure they have a good history and have not been implicated in any data breaches or cyberattacks.
• Customization. Can the designers craft a system that meets your specific needs, or are they selling out-of-the-box? Look at your departments and their particular demands and consider who should have access and who needs more or less ability to control the data.
• System integration. The purpose of entity management software is time reduction and efficiency. You want your new software to mesh with outside systems you have to connect with. For instance, your new software must upload your tax documents to the IRS and state tax sites. It also needs to assemble encrypted annual reports for your board of directors.  Give some thought to the systems you want to communicate with and be sure your provider can give you that program.
• Document sharing. One of the key reasons entity management software was created. Everyone has had the experience of trying to assemble a document only to discover there are three “current” versions, all with the same date and time stamps. Good entity management software eliminates this problem, and coordinates with other document sharing software such as Google Docs and SharePoint.
• Tech support. You want a provider who will train employees on the new system and be available for support calls during the breaking-in period. Be wary of anyone who says, “It’s easy, you can watch the videos,” or assures you it’s no harder than Windows. You want someone who will be there for a good trial period.

If it sounds like preparing for a software update is as much work as just sticking with the tried-and-true Excel spreadsheet, relax. Once the new system is in the efficiency and convenience will be more than worth the time spent. It’s better to take a little extra time to get exactly what you need than to discover afterward that you wanted something slightly different. 

Athennian Can Help

Lucky for you, Athennian already has most of the features you want in a good entity management system. We have been developing these systems for financial, tax, and legal companies and integrating them with existing systems for many years. We customize the system for your business and give you the features you want and need so your data management stream gives you exactly what you want when you want it. Contact us today to speak with a member of our team for a customized demo.