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Automation

2021 and Beyond: Embracing Tax Technology of the Future

· 6 minute read

· 6 minute read

How to build the modern tax department by embracing technology

Corporate tax departments were already feeling internal pressure on a myriad of fronts, from improving their work processes to increasing their efficiency, and of course, to lower their costs. Then, the Covid-19 pandemic hit, greatly exacerbating all of these challenges.

In the first few weeks of the pandemic, shaken corporations and their tax teams gamely continued forward, trying simply to keep the business going. Those tax departments that weren’t as tech-enabled or data-driven as they wanted to be or were perhaps transitioning to a more digitized approach to their work were forced by circumstance to back-burner much of those initiatives, at least temporarily.

Now, corporate tax departments — much like the rest of Corporate America — are dealing with the lessons learned during the pandemic, such as the value of remote working, the need to share data and material over a secure platform, and how to better balance work and home life. In short, many departments have moved from the shock of the pandemic to now seeing the opportunities of this forced behavioral change.

In the latest webinar from Thomson Reuters, Building The Modern Tax Department of the Future: Embracing Technology to Drive Your Business, panelists acknowledged this new reality, and discussed the steps corporate tax departments can take to get there, including the need to gain widespread acceptance for tech-enabled change within departments and within their corporations themselves. The panel was moderated by Kelley Lear, Director of Partnerships & Alliances for Thomson Reuters.

 

View our latest webinar, Building The Modern Tax Department of the Future: Embracing Technology to Drive Your Business

 

“When COVID hit, we were expected to pause and reassess, but now, it’s like we need to reassess again because of the opportunities that are coming up,” said panelist Luis Perez, Director of the Global Tax Automation & Operations for Dell Technologies.

Some of these opportunities — including investment in both technology and people — were identified in the recently published 2020 Corporate Tax Departments Survey: New Technology Demands New Skills & New Attitudes, from Thomson Reuters and Acritas (now part of Thomson Reuters).

The report outlines how an investment in technology greatly helped those tax departments to be in a stronger position to respond once the pandemic’s impact began to be felt. Indeed, the report also shows that departments making such strategic tech investments were better able to handle the workload and understand the implications of any new legislation or rule-change, which were plentiful during the early days of the pandemic.

Further, both the report and the panel outlined how important it was to assess the varied skillsets among the tax team and determine where any shortfalls maybe, especially in areas of technological aptitude. Panelist Tom Kelsey, Senior Manager of Custom Research for Acritas, described how a survey in the report noted that more than 80% of tax department leaders said they would rather teach technology to tax professionals, rather than teach tax code to technologists. “However, when we interviewed some of the respondents further, the situation was less clear cut,” Kelsey said, adding that already some tax departments were hiring technologists to help lead the team’s efforts to become more tech-savvy and data-driven. “It’s evident that these department leaders see the technology as supporting the tax professionals they already have in place.”

Demonstrating the need for change

Convincing stakeholders of the need for change within the tax department is another crucial part of building a modern tax department. Making the case — and supporting it with evidence — that adopting new technology and training people in its use will provide numerous benefits to the department in terms of efficiency and cost-savings is vitally important. 

“During the pandemic, we saw that in every tax department we encountered there was definite concern about the need to improve and where,” said Fred Baumer, Managing Director at KPMG LLP. “It was top of mind.”

With the business side so focused on cash recovery during the pandemic, it made sense that tax departments should push new technology that would better gather and analyze data that could help the team identify savings opportunities, ways to improve service delivery, or even new marketing possibilities, such as enabling e-commerce solutions, Baumer explained.

Another critical component that panelists discussed was the need to identify who among the tax department and the corporation is ready to change. “The earlier you go down this process to take advantage of the available technologies or tools, the better,” said Dell’s Perez. “Because at end of the day, you are digitizing the work and creating data, and that data can take you further toward AI, machine learning, and additional data analysis.”

Of course, to get there, several important constituencies may need convincing first. For example, the company’s IT department usually handles the resources and budgeting for any technological innovations, so those department leaders would have to be convinced. Also, there are stakeholders in the Corporate C-Suite and within the tax department itself who will also need convincing, creating a sort of “convincing down” and “convincing up” dynamic, the panel described.

To this end, the survey report noted that among the most successful arguments used in making the case for new technology is cost savings, risk reduction, and an increase in the accuracy and quality of the work.

“There is a day coming when we will all have to be automated,” said KPMG’s Baumer, adding that it makes sense to work toward becoming a modern tax department now to better thrive in the future.

 

For more articles to help you transform your tax department, read the complete report State of Corporate Tax Survey,  or our latest blog post, Tax Department Goals: How to be Optimized and Strategic Beyond the Software.

Listen to our corporate tax podcast to hear the latest on tax and technology, Tax & Tech Talks available on Spotify, Libsynpro, Apple Podcast, or on any of your favorite podcast apps.

 

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