All categories/Finance and operations
Budget and operations · Level Advanced · Finance Tax Compliance
Tax basics: what not to do
Understanding tax risk exposure.
Prompt
Separate the lenses first: accounting, tax, management. Mix them and the numbers never reconcile.
Task: Understanding tax risk exposure.
[Before you start, do three things]
1. Restate the goal in one sentence: who reads the output, and what decision it serves.
2. If I have not given you the following, ask me. Do not assume:
- business model and revenue types
- tax status and region
- invoicing and contracts
- existing doubts
3. Say how you plan to do it (at most 5 steps) and wait for my go-ahead.
[Go through each of these]
- four risk areas: invoices, revenue recognition, deductions, cross-border
- one self-check per area
- state this is not tax advice
- the most likely problem area
[Process]
1. State the lens, scope and period
2. Split into volume, price, mix
3. Compare with last period or budget
4. Show the cash impact, not just profit
5. Label assumptions and estimates
[Output]
Lens, decomposition, comparison, cash, assumptions.
[Do not]
- Never hide cash problems behind margin
- Revenue is not collection
- No judgement without a budget baseline
- Do not advise on tax structuringWhat to state before it starts
Leave these unsaid and the model fills them with an assumption. Most 'wrong answers' start here.
- business model and revenue types
- tax status and region
- invoicing and contracts
- existing doubts
Go through each of these
Where this kind of work most often goes wrong. Already in the prompt, so you do not have to remember it.
- four risk areas: invoices, revenue recognition, deductions, cross-border
- one self-check per area
- state this is not tax advice
- the most likely problem area