Webinar
Challenging the traditional insurance corporate tax function
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.
Common factors negatively impacting corporate tax operating models
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:
- The manual consolidation and review of data, which can be time consuming and prone to risks and errors including formula errors and invalid data sources
- The housing of data in multiple places in different formats – system databases, Excel spreadsheets, etc. – that are outdated and lack automation
- The lack of integration between upstream finance applications and downstream direct and indirect tax applications
- The misuse of time among finance and tax professionals gathering and sorting data that could otherwise be spent on value-added activities
Solutions for improving corporate tax operating models
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:
- Actively upskilling client personnel in automation trends and identification of practical use cases in order to promote citizen-led behavior
- Reviewing existing processes to identify data gaps and pain points within manually intensive processes
- Focusing on the model design process and technology solutions
- Enabling the rapid deployment of automation model(s) to eliminate more than 50% of the hours spent on manual data manipulation
- Establishing a sustainable/agile governance model that formalizes stakeholder roles and responsibilities, enables the review/update of internal controls, addresses additional change management challenges and monitors business and legislative changes
Operating model assessment
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.
Our tax professionals can assist your team by exploring every opportunity – no matter how unexpected – to prepare you for tomorrow. Schedule an appointment with our team and explore our services.
