“If tax risk were rain, we’d be at the flood stage.”
That’s how Randy Robason, a partner at Grant Thornton, opened his ONESOURCE user conference talk on how corporations can better manage tax risk. Randy, along with his colleague Jeff White, aptly titled their presentation “Your Ticket to Noah’s Ark: Emerging Practices to Manage Tax Risk with Technology.”
Expectations in today’s tax departments are greater than ever. A tax professional is not just expected to do the taxes – but also to adapt to changes in the business and regulatory environment, to be compliant with all regulatory authorities, to satisfy all stakeholders and to provide value-added advice to those at the C-level. Leaders assume their tax professionals can do the mechanics right – they have higher-level concerns.
And corporations will come under even greater scrutiny now for their tax processes and policies particularly after part II of the PCAOB report was published. As one of Grant Thornton’s customers said recently, “tax function has gone from the back office to front and center.”
So how should tax departments manage risk? In a word: better technology.
Randy and Jeff both said that having solid data as a foundation is the key building block for managing tax risk. If data issues aren’t remediated, they can spiral out of control and create issues not just with risk but also with efficiency and people (fundamental data issues lead to increased employee turnover). Organizations also need to make sure that finance and tax teams are fully aligned, and that initiative needs to come from the top – such as the CFO or business unit leaders.
Having the right software is also crucial to mitigating risks – including tax provision software, workflow software and data-gathering software. (Of course, we hope you’ll work with Thomson Reuters on this step!) But the tax teams implementing the software can’t just see it as a quick fix – they need to be versed in the base issues and be familiar with the data.
For more blog entries about the #ONESOURCEuc, check back later today.