In the 2020 Corporate Tax Departments Survey<\/em><\/a>, released earlier this month by Acritas, a Thomson Reuters company, and the Thomson Reuters Institute, chronicled how leaders of corporate tax departments are viewing these challenges. The report is based on interviews with tax department leaders from 23 large, U.S.-based companies and a survey of more than 300 corporate tax professionals.<\/p>\n\n\n\n The findings include five components that corporate tax leaders need to be successful.<\/p>\n\n\n\n The report reveals a Catch-22. Corporate tax departments implement technology to be more efficient and manage increasing workloads and regulatory complexity, but they lack the time and skills needed to fully realize the technology\u2019s potential.<\/p>\n\n\n\n The survey found that departments that spend more<\/em> on tax technology ultimately spend less <\/em>overall \u2014 strong evidence that technology creates greater efficiencies once it\u2019s up and running. However, nearly 60% of survey participants described their use of technology as reactive or chaotic<\/a>.<\/p>\n\n\n\n \u201cMuch of the problem lay in resourcing, our survey found \u2014 and with recruitment freezes becoming the norm, it seems likely that existing resource challenges may become compounded,\u201d the report noted. \u201cMany of the respondents say they feel under-resourced and struggle to keep up with day-to-day pressures.\u201d<\/p>\n\n\n\n So, how can tax departments implement the technology<\/a> needed to manage their workload when their workload prevents them from implementing technology?<\/p>\n\n\n\n The answer is to acknowledge the problem, and persuade stakeholders who control the budget that additional resources are required in the short-term to secure operational efficiencies for the long-term. This might include extra help with day-to-day compliance work to give the tax team more time to implement new software, complete training, and establish new streamlined processes.<\/p>\n\n\n\n That leads to the second thing corporate tax leaders need \u2014 the right set of skills on their teams<\/a>.<\/p>\n\n\n\n Indeed, nearly 40% of survey respondents said their corporate tax departments lack specific tax-related skills, and 30% lack essential technological skills \u2014 strongly suggesting the need for a professional development strategy.<\/p>\n\n\n\n \u201cAt the heart of the \u2018people issue\u2019 is whether a department has the right people,\u201d the report observes. \u201cSometimes, it\u2019s simply a question of leadership \u2014 getting people to change their attitudes and be willing to adapt \u2014 but other times it\u2019s a question of skills. You either need to train existing staff or bring in staff with a new skillset. And that leads to the question of whether to create a role for a tax technologist.\u201d<\/p>\n\n\n\n The survey found that companies increasingly are adopting such a role \u2014 a professional who combines tax knowledge with technology and data analysis skills. In most cases, these companies help their tax professionals acquire technology and analytical skills, rather than teaching tax and accounting to tech professionals.<\/p>\n\n\n\n The report also highlighted the importance of keeping tax teams motivated and enthusiastic. \u201cThese teams need to feel a sense of ownership of any new processes or technologies. This requires a combination of clear communications, practical training, and supportive leadership.\u201d<\/p>\n\n\n\n Companies routinely make moves \u2014 mergers and acquisitions, expansions into new markets, changes to tech systems \u2014 that increase workload for the tax team. \u201cBusiness operations seem to be historically the biggest challenge,\u201d said one corporate tax professional interviewed for the survey. \u201cAnd, unfortunately, you don\u2019t know what that\u2019s going to be, whether it\u2019s an acquisition or a system change\u2026 . You don\u2019t know.\u201d<\/p>\n\n\n\n Tax executives who are on their companies\u2019 leadership teams are better informed and equipped to plan for and manage these changes. In fact, a higher profile also helps the tax department when it\u2019s time to discuss and implement new tax technology. The survey found that nearly one-third of corporate tax teams have little or no involvement in making the business case for tax technology investments. For these organizations, the first step is for tax department leader to be active in those deliberations.<\/p>\n\n\n\n \u201cTax departments benefit and are more effective when they have a higher profile in the company,\u201d the report concludes. \u201cThis allows them to stay informed about corporate actions\u2026 that will impact their workload, showcase successes and challenges, demonstrate the need for resources, and provide strategic commercial advice.\u201d<\/p>\n\n\n\n The report notes that several respondents had said \u201crelations with the company\u2019s IT department were often a problem: IT teams had their own mandates and were less inclined to understand or support the more specialized requirements of the tax team.\u201d<\/p>\n\n\n\n It\u2019s essential for the tax department leader to have a collegial relationship with the IT department, because IT often controls decisions and budgets for tax technology.<\/p>\n\n\n\n \u201cOften (the tax department) does not own the technology budget, because the investment is quite large,\u201d said another survey respondent. \u201cIn the company I was in, IT owned the budget, so I was making my business case to IT with the support of finance leadership and tax leadership, getting approval for the project, getting a budget I was going to need to work within, interviewing and bringing in vendors, and then submitting a request for proposals or quotes to the vendors. I spent probably half-a-year interviewing different vendors with my requirements, bringing in my tax staff [and] having them see demos of my vendors, then narrowing it down to two vendors.\u201d<\/p>\n\n\n\n Assessing the tax department\u2019s strengths and weaknesses is critical, but it is just one part of the managing change within the department. Other vital components include crafting a compelling strategy; delivering results despite limited resources; staking out a higher profile within the enterprise; building skills and relationships; creating a tech roadmap, making the business case for it, executing the plan, and then measuring and reporting the return on investment.<\/p>\n\n\n\n Tax department executives need the full complement of leadership skills \u2014 starting with exemplary change management abilities \u2014 to juggle all these components successfully.<\/p>\n\n\n\n \u201cIt will take\u2026 hard skills to set strategy, allocate budgets, and select the right technology; and soft skills to communicate the strategy, inspire their teams, and manage change,\u201d the report observes. \u201cFor those tax team leaders that get it right, there\u2019s great opportunity to add value and increase job satisfaction.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" Many executives who lead large companies\u2019 tax departments are challenged to keep pace with ever-changing regulatory requirements, in-house demands, and technological challenges, according to a new survey.<\/p>\n","protected":false},"author":132,"featured_media":429,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[686,658,684],"tags":[762,826,828,827],"insight_job_role":[710,713,712,711,714,804,805,722,808,614],"insight_practice_area":[],"class_list":["entry","author-adminwilkins","has-excerpt","post-711","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business-transformation","category-leadership-strategy","category-strategy","tag-corporate-tax","tag-leaders","tag-survey","tag-tax-departments","insight_job_role-chief-executive-officer","insight_job_role-chief-financial-officer","insight_job_role-chief-information-officer","insight_job_role-chief-marketing-officer","insight_job_role-chief-operations-officer","insight_job_role-chief-risk-officer","insight_job_role-chief-tax-officer","insight_job_role-general-manager","insight_job_role-head-of-tax","insight_job_role-partner","hentry"],"acf":[],"yoast_head":"\n5 components for success<\/strong><\/h2>\n\n\n\n
1. Time<\/strong><\/em><\/h3>\n\n\n\n
2. Talent<\/strong><\/em><\/h3>\n\n\n\n
\n\n\n\nYou can access the full <\/em><\/strong>2020 Corporate Tax Departments Survey<\/em><\/strong><\/a> here.<\/em><\/strong><\/h2>\n\n\n\n
\n\n\n\n3. A seat at the leadership table<\/strong><\/em><\/h3>\n\n\n\n
4. IT support<\/strong><\/em><\/h3>\n\n\n\n
5. Change management<\/strong><\/em><\/h3>\n\n\n\n
Opportunity in getting it right<\/strong><\/h2>\n\n\n\n