Transform Your Tax Department
The corporate tax landscape is changing rapidly. To keep up, there is a need for a dramatic shift to occur in the way tax functions operate.
There are so many disruptive challenges out there.
Today’s corporate tax departments must transform their capabilities, move their focus and add more intrinsic value. There are many challenges that significantly impact department workflow processes and the ability to contribute to their organization’s overall growth strategy. These challenges range from the need to reassess staffing requirements to management of evolving expectations and growth.
Modify your staffing policy.
To transform for the future, tax departments must rethink their current human resources strategy. As many manual tax-related tasks are being automated, firms need to examine what hard and soft skills tax department staff will require in order to perform their jobs effectively. For instance, employees may need to have a better understanding of technology as well as a higher level of emotional intelligence to complement the organization’s increasing reliance on artificial intelligence.
Manage audit risk and disputes.
There has been an “increase in the number and size of tax audits, assessments and disputes with revenue authorities worldwide.” 1 As a result, tax departments have to be vigilant about where they obtain their information, how data is recorded and how it is compiled. They need to look for ways to standardize sources of information and automate the data management process. And they must take advantage of technology-based tools that will reduce reporting errors, improve the quality of their data and free up skilled staff to focus on more strategic issues.
Embrace the latest in technology.
To stay ahead of the game, tax reporting processes must incorporate automation, have strong analytic capabilities, use data more efficiently and have better controls. And once again, organizations need to have technology-savvy tax professionals on staff. A by-product of all this, is that that tax departments will be able to deliver better quality output in less time, freeing up staff to get involved in more strategic, organizational decision-making.
Focus on trust and transparency.
The modern-day tax function no longer resides in an organizational silo only participating in departmental decisions. Rather, it is expected to contribute to the success of the business and be actively involved in the company’s overall growth strategy. The tax department must focus on building trust with other areas of the organization. The best way to accomplish this, is being completely transparent with the other business centres while imparting data driven insights that position the tax team as a strategic asset to the business as a whole.
Six steps for preparing for and undertaking tax transformation.
Once you have recognized the need to transform your tax department, there are six steps you can take to make it happen.
- Define your tax department’s vision. Focus on where you would like the department to be in three-to-five years.
- Understand your company’s perspectives and expectations. Talk to key tax stakeholders, valued customers and business unit leaders.
- Assess how capable your tax department is to make the changes. Determine your department’s key competencies and what opportunities exist to improve its performance and create more value for the entire organization.
- Prioritize your opportunities. After that, decide how resources should be invested so that they make the greatest impact.
- Develop initiatives and mobilize. Identify potential approaches that will address your opportunities and then develop an action plan that marks out key milestones and responsibilities.
- Ensure everyone in the tax department is on-side with the projected transformation. Pinpoint areas of confidence and concern – and then move forward.
Follow these six steps and you will have your tax department transforming in no time. You will meet today’s challenges, while capitalizing on the many opportunities your tax function has to contribute to the overall growth of your company.