In today’s rapidly evolving and technology-driven regulatory environment, businesses and governments have had to change their operations to stay profitable and compliant. Everything from cloud computing to machine learning and AI to the Internet of Things (IoT) are opening new revenue streams and altering supply chain models. Following the COVID-19 pandemic, businesses and governments once again had to adapt to a new way of life and how consumers were seeking products, ensuring that items were being taxed correctly. It’s more clear than before that tax analysts need a wide array of skills to ensure their company stays compliant.
Indirect tax professionals must be able to work in a global environment, understand evolving business goals and know how to properly dissect data and present it in a meaningful way. Furthermore, these individuals must remain current on the latest technologies to ensure that their business continues to be efficient and compliant in all indirect tax requirements.
Here are five key tax analyst skills that will ensure a business finds success with indirect tax.
Manual processes for managing sales tax compliance are not enough for today’s regulatory environment. Tax analysts must have a strong grasp of automated processes and how an “always on” tax engine ensures you can automatically apply changes as they arise and effortlessly ensure accurate sales tax calculations.
Regulatory authorities are looking for more effective ways to collect revenues owed and close the tax gap. Tax analysts need to know your company data inside and out. It’s not enough to simply know that sales tax exists in one state and not the other. Sales tax is increasingly complicated, and with economic nexus requirements continuing to roll out in states, businesses could be facing more nuances with taxes owed than ever before. It’s critical for tax analysts to know what the data means, how it could impact your company, and what changes need to go into effect to stay compliant.
Understand the implications of change
To that same effect, a strong tax analyst knows how to relay critical information to all departments in a digestible manner. We’ve previously talked about how the tax and IT departments must be aligned on the journey to a cloud-based sales tax solution, but that is just one example. When sales and use tax evolves – and it will continue to evolve – businesses must realize those implications. Is there a new sales tax holiday in a state in which you operate? When did your business meet a state’s economic nexus threshold? Tax analysts have to know what will impact the company and what changes are necessary to keep the business in line with all local, state and federal regulations.
Business acumen and adaptability
Tax might be one of the two certainties in life, but your tax solution cannot remain stagnant. Tax analysts need to know how to adapt to the evolving environment. Can your tax solution scale to meet your company’s growing needs? How expensive are database or hardware upgrades and replacements going to cost? The right solution seamlessly scales along with your business, and tax analysts must realize that this adaptability is essential to continued business growth.
Realize the security risks
Tax transaction details often contain sensitive organizational data and often the personally identifiable data of your customers. Do you really want your business spending unnecessary time, attention and resources toward applying security patches to outdated and on-premise technology? It’s essential to keep sensitive data safe, but to also not detract from regular operations. Tax analysts must know that managing and maintaining security on your own could quickly drive up TCO, overburden your IT team and impact the company’s bottom line.
Ready to prepare for the future of sales and use tax? Check out our annual report, “Sales and Use Tax in 2021: What’s Changed” to learn more.