It’s clear business evolution, technology disruption and related tax compliance laws are creating increased complexity and becoming tremendous business liabilities.
In today’s regulatory environment, businesses must view tax compliance as a critical function, committing the right resources, technology and process discipline necessary to maintain compliance and respond to the associated audits so the business can grow and adapt without worrying about increasingly detailed regulations.
A New Era of Tax Teams
Finance and tax leaders need to build new and innovative tax teams to proactively address the wave of technology-driven tax initiatives – but that’s increasingly hard to do in today’s competitive talent landscape.
Many companies are experimenting with outsourcing some tax functions overseas, hoping to free up their already depleted tax teams. Often, however, this just adds to the tax team’s frustration in correcting unfamiliar tax rule errors, delays in solving relatively trivial problems that arise, and creating further communication challenges to a function that has traditionally operated in relative silos.
Staffing challenges aside, many tax teams are expected to do more with less, even as the demands of the business expand into new product categories, online sales across geographic boundaries, and increases in audit frequency continue to push teams to their limits.
A recent survey by Pure Search found the most important issues for tax departments today to be reputational risk and stakeholder management, followed by business decisions and governance. And while tax is moving from a purely back-office function to an integrated and strategic position, the need for tax professionals who are more generalists and not just strong technically is on the rise.
This transition will also require today’s tax professional to have a data-driven, business, and security mindset.
Data-Driven Tax Professionals
As governments increasingly require transaction-level details, today’s tax talent must have the ability to organize data, combine it, manipulate it and access it for auditors and management reporting. The top tax pros will be able to translate this data into insights and KPIs to measure, monitor and improve processes, and provide strategic insights on opportunities and risks to leadership.
Business Acumen and Adapting to Rapid Business Change
A keen understanding of both business operations and the implications of tax measures will enable tax leaders to work cross-functionally with various lines of business — including finance and IT — to bring visibility and elevate the importance of tax-related issues. This more proactive role will help them lead the case for business change across the organization to comply with and advance from compliance initiatives.
A Keen Understanding of Security Risks
Since companies are submitting so much more information to government authorities in their local jurisdictions and across borders, data security and managing privacy concerns are now also tax-related matters. Tax professionals of tomorrow need to understand their roles in privacy and security, and have the ability to put the technology and processes in place to ensure their information is protected as cloud-based solutions come to the forefront as the preferred model for strategic growth.
Retaining such a well-rounded and future-proof tax team will require ongoing training, mentorship programs and opportunities for job rotation. Some companies are even deploying cutting-edge tax technology to automate and streamline compliance and reporting. This will enable tax professionals to refocus their efforts on identifying opportunities and reducing risk for their organization.
Contact Sovos to learn more.