Sarbanes-Oxley touched off a scramble to tighten the connections between tax and finance along the reporting axis, and since then other area of integration have been receiving increased attention, notably systems architecture and process design. But finance-tax integration is still a long way behind where it needs to be, especially at the level of enterprise technology and data exchange. In fact, the growing complexity of both the finance and tax functions in increasingly globalized organizations is actually driving them further apart, according to a new white paper from PricewaterhouseCoopers.

Here’s an example of these centrifugal forces at work: When a global company consolidates data from its various subsidiaries and reporting units, the consolidation software may pull the data only in the form it needs for financial reporting, ignoring the need of the tax function for legal entity information. So tax staffers around the world have to retrieve the numbers they need manually. Even when companies have implemented tax provision software packages, they often overlook the need to align these processes and integrate their data streams, using the technology “like a typewriter,” as one company put it.

So what’s a company to do? PwC offers some suggestions and best practices, looking at the problem from both the finance and the tax sides. For example, here’s how high-performing tax departments handle the technology/data dimension, according to the report:

• They sensitize the ERP data to provide accessibility to legal entity books and tax-relevant data;

• They standardize Web-based data collection tools embedded within the ERP or financial consolidation system to provide a common platform across all subsidiaries;

• They leverage extract, transform, and load (ETL) and business intelligence (BI) tools, data warehouses, and datamarts as part of a comprehensive data acquisition and management strategy;

• They manage documents in a document management system, rather than in hard copy or on a shared network drive.

So how does your organization stack up? If your systems architecture doesn’t include ETL tools, BI software, or a data warehouse, you’re not alone. In a new Business Finance survey of more than 140 tax pros, relatively few participants reported that they use these systems (7 percent, 10 percent, and 21 percent, respectively). Document management systems are pretty scarce, too, available to 16 percent of our participants.

Tax may have some catching up to do on the tech investment front before it reaches peak performance levels, but all’s not lost — PwC also offers some valuable tips on the people and process dimensions that might be easier, and cheaper, to implement. ###