Tax & Accounting Blog

The Captain Has Turned On the Fasten Seatbelt Sign

Global Tax Compliance, ONESOURCE, Tax Provision, US Income Tax Compliance January 19, 2012

Recently I was on a flight on an airline that has been installing DIRECTV on its planes. A lot of money being spent on a great idea, especially for long flights. But for it to work, it requires the flight crew to operate the system. If they cannot, not only does the investment turn bad, but it can create ill feelings towards the airline from the passengers. On my last several flights, the system has had problems, including one cross-country flight where it really did not work at all. Of course, if you ask their operational lead, they would say that everyone has been appropriately trained. The engineers who built the systems would say it was human error or lack of training that is the root of the problem.

So how does this example relate to the tax world? Well, over the past decade, companies have made significant investments to improve their financial reporting requirements inlcuding solutions to support income tax requirements. The investment goals are to speed up the process, increase the accuracy and integrate the efforts with the overall financial reporting requirements. However, the reality is that every profession, whether tax professionals or a flight crew, needs to understand how to fully use the technology that is part of their job, when it’s first installed, and on a continuing basis. Software is constantly changing, environments where the software is being used are constantly changing, and people using the software are constantly changing. Any investment in software must include an adequate amount of time and money for additional, on-going training to support and utilize the software.

Too many times, the cost of maintaining the software, including the development of the professionals using the software, is significantly shortchanged. Any company that deploys critical software needs to recognize this dynamic situation and develop programs that their evolving needs. The potential benefits from the software begin to decrease and the risks increase.

What does all of this mean? Companies must take into account the costs beyond the initial implementation investment. If that airline mentioned above does not include the appropriate, on-going training, then they can forget about the value of their investments in this system. This is the same for any company that invests in software. Relying on the passing down of knowledge is not going to work. A commitment to on-going training is vital for success.

Good or bad, share your tax software implementation stories, by commenting below.