As the world becomes increasingly technological, tax professionals are facing daily challenges with their traditional operating methods. Combined with staffing shortages and a volatile economy, these challenges are becoming more difficult for many financial services organizations to overcome. However, through the adoption of new technology and automation, the processing of large amounts of data – often the most taxing part of a tax professional’s job – becomes much more manageable and time-efficient. Team members can not only save themselves from hours of tedious work, but also ensure that the margin for human error is smaller.
Recently, a low GDP and low interest rate environment has forced many organizations to continuously challenge their internal cost structure. Year over year, pressures are placed on leadership to avoid adding staff in order to improve their return on equity (ROE) and combined ratios. This is where the importance of technology and cloud-based software comes into play. Some common factors negatively impacting many corporate tax operating models include:
Due in part to advances in remote access and secure collaboration tools and cloud-based technologies, tax activities continue to become digitized and traditional work papers are moving to shared sites. Many organizations have found that “light grade” tax technology solutions can be built out rapidly and at a low cost. Some examples of these platforms include Power BI, Tableau and Power Pivot. These methods have helped to strengthen tax departments and combat common data challenges by:
Once a model is updated and improved or a new model is in place, an operating model assessment is vital to ensure everything is performing as intended. The assessment takes a critical view at the operating model and the capabilities it provides to see how well the operating model supports the organization’s strategy. As tax laws continue to change and evolve, business complexity also continues to change, requiring organizations to do more with fewer resources. Sticking to an in-house tax transformation strategy, updating tax technology, and co-sourcing to minimize staffing issues will ultimately help you reduce risk, accelerate results and keep your business ahead of the curve.