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How can tax and accounting professionals manage their workpapers?

By, Stephen McGerty, Head of ONESOURCE Income Tax, Provision & Workflow, for the
Tax & Accounting business of Thomson Reuters

Did you know…?

  • Tax is the primary cause of control deficiencies.
  • Managing risk through the adherence of controls is a key objective of a tax professional.
  • A recent study of nearly 400 tax departments from public and private corporations revealed numerous concerns around workpaper efficiency and controls.
  • Tax professionals spend 30% to 60% of their time just pulling, organizing and preparing data, leaving little time for analysis.
  • 36% of tax professionals spend more than two months each year preparing workpapers. 53% said that updating information in workpapers is the most time consuming task they’re faced with.


Rapid globalisation and ever increasing regulatory scrutiny are forcing companies to deal with more complexity than ever before.  New regulations are constantly being introduced by governments around the world.  The challenge for companies expanding globally is to remain compliant.  Consequently, tax and accounting professionals worldwide are experiencing increased pressure to do more – but often with simultaneous internal pressures to cut costs.

Traditional approaches to manually collecting and manipulating information are no longer sufficient.  This is driving a shift towards specialized software solutions that serve to increase efficiency, automate data collection, and reduce risk.

What are the challenges and the risks?

One of the major challenges companies face is a lack of control in and around workpaper documents.  Workpapers are typically spreadsheets put together in a relatively ad-hoc fashion.  Mistakes in these spreadsheets effectively cause the workpaper to “break” and produce incorrect results or conclusions.

Workpapers are often distributed to dozens of subsidiary business units across the globe, frequently in an effort to collect and consolidate information.  If the company has not put controls in place to ensure the structure of those workpapers is preserved, then the risk of errors and inconsistencies is even greater. Poorly constructed workpapers often result in tax and audit departments conducting redundant work, which wastes time.

Different departments often have different document repositories and filing standards that create further collaborative barriers. This can be a particularly disruptive to the audit process especially for public companies as they are audited annually.

As workpapers become more complex to maintain, tax and accounting professionals are finding that their current practices, usually spreadsheets stored on a shared hard drive, do not offer the efficiency and control that they need.

What’s the solution?

To reduce risk and gain control, tax and accounting professionals need a solution that offers the ability to use their existing spreadsheets, but offers a level of protection from incorrect use or changes.  Preventing users from inserting unwanted rows or columns, changing calculation formulas, or breaking links to other worksheets can significantly reduce the chances of workpapers “breaking”.

Implementing a system to more easily create, maintain and share workpapers allows tax and accounting departments to find a balance between flexibility and structured control.  Flexibility, in that they need to be able to gather information from a variety of sources, aggregate it and perform ad-hoc calculations on it.  Control, in that they need these things to be done consistently and with less concern that the structure of the workpapers has been changed.

One technique that can simplify the use of spreadsheets as workpapers is to break down large workbooks into a set of modular worksheets, ideally based on standard templates.  Grouping related information together in a consistent fashion can reduce the chances of error and can facilitate scalability for the future.

Workpapers almost never live in isolation – they are typically woven into a complex tapestry of documents that build up to provide a solid auditable defence for a tax return or other type of external declaration.  Workpapers need to be connected with traditional tax software systems in such a way that users can easily trace information back to it source – this helps improve transparency and assists with audit defence.

Workpapers usually have to be “rolled over” from month to month, quarter to quarter and year to year.  This process can be time consuming, tedious and error prone.  Software systems can help to automate these rollovers, ensuring they’re done quickly and consistently.

Implementing a single, consistent document repository across the tax and audit departments is another technique that can improve the critical to maximum workpaper efficiency. Cloud-based solutions are growing in popularity and can create efficiencies by ensuring consistent indexing of documents and flexible searching and retrieval.

Tax professionals can now print a document directly into a document management system in the cloud, as well as onto paper.  While the printer may produce a crisp paper copy of the document, it won’t index the document, back it up or make it available to a broader audience.

This is particularly beneficial where tax departments are geographically dispersed; an increasingly common phenomena as companies expand their global operations.


Workpaper management systems are helping manage the risk around complex, interwoven spreadsheet based systems.  While not necessarily replacing spreadsheets, they aim to control the use of spreadsheets and offer connectivity with traditional document management systems and tax software.

Integrated tax software suites are growing in popularity as users demand a more seamless experience between spreadsheet based workpapers, document management systems and tax provision and tax return software.