Tax parameterization: 5 aspects to consider for ensuring compliance and competitiveness

A proper setup of the management system contributes to tax compliance and boosts productivity

By Luiz Carriço

Does your company need to deploy or replace its tax data management software? Tax parameterization aligns a given system with the countless standards required for compliance management.

Such standards involve tax assessments, rates, codes and many others that must be properly applied to the operations, on a regular basis.

Parameterization not only helps in maintaining compliance, but also provides an opportunity for boosting productivity. After all, when a system is properly set up to meet the legal requirements, all tax operations are carried out with speed and efficiency, preventing reprocessing and potential tax disputes.

Regardless of the company’s ERP of choice, it is important to keep some aspects in mind for a compliant tax parameterization:

1. Tax treatment given to the business

Knowing the tax treatment given to the company's operations is fundamental. This includes the rules pertaining to the taxes and contributions that will be charged and the ancillary obligations that must be filed with the authorities. It is worth noting that there are rules in place at the federal, state, and local levels, in addition to specific regulations for the business sector.

Another aspect that deserves attention is the classification of all goods traded by the company to ensure that all taxes are properly collected.

Misidentification of the rules can lead to problems such as underpayment of taxes - which may result in penalties or unnecessary tax costs. On the other hand, when the whole process is carried out properly, companies benefit from a risk reduction and gain a boost in competitiveness.

2. Process mapping

One should be well acquainted with each stage of the process and the specifics of the client’s primary and ancillary obligations.

Once all requirements have been identified, the impact of the tax changes on the ERP system should be assessed. A parameterization strategy can be outlined afterwards to define which fields, reports and processes are going to be set up.

3. Specialized support

Due to the complexity of the Brazilian taxation system, companies should seek support from a partner with a great deal of expertise on the matter. For this reason, relying on accounting and tax experts is key.

By doing this, it is possible to devise processes suitable to the specific needs of the business in order to achieve the desirable tax results.

4. Validation

Once the configuration is complete, testing and validation procedures should be performed to check whether all changes have been deployed properly and if the system is operating strictly within the specifications.

It is also important to provide training for the users so that they can understand how the tax changes have affected the ERP and how to use the system from then on.

If the tests confirm that the system is working as intended, the next step is to put it into use.

5. Constant updates

The Brazilian taxation system is ever-changing, and the challenge of keeping up to date with the country’s tax landscape is a very common complaint among business owners.

To ensure compliance and prevent sanctions, one should think of ways to keep the management system updated with respect to changes in tax laws and regulations.

As such, companies must find ways to adjust and update their ERP systems as changes are made to the rules.

From planning to operational support

With a cross-functional team, Domingues e Pinho Contadores brings together tax experts and tech professionals specialized in tax parameterization.

Our team provides partial or full support in the implementation phases, from designing and planning, going through process mapping, all the way to the parameterization, deployment, validation and adjustment stages. After that, clients can also count on DPC’s operational support, as our professionals continue to provide assistance during the initial stages of the system’s operation.

To ensure security and reliability in system parameterization and add quality and agility to your company's tax processes, you can count on DPC: dpc@dpc.com.br.