The tax function is rapidly evolving into a more strategic role within modern organizations. However, given this pace of change, many executives are still unaware of the untapped strategic potential within their tax teams. This is an unfortunate reality that many tax technologists and strategists report. In their words, they’re all too often seen as “compliant paper pushers,” and their departments are viewed as mere cost centers rather than value-adding assets.
During a recent webinar held by insightsoftware, we heard this general sentiment reported once more. We asked attendees to tell us how they felt their tax department is viewed internally by their coworkers. Forty-five percent reported being seen as merely reactive or compliant within their organizations, a far cry from the well-valued stature that other tax teams are able to achieve if given the right tools.
The challenge to becoming—and being perceived as—a strategic partner to an organization can be self-perpetuating. If tax teams are viewed as nothing more than compliant cost centers, it can be difficult for them to secure executive backing for improved software that could make them more productive while increasing visibility into tax processes. Then, if tax teams are unable to adopt the newest tools that would actually support a more strategic function, they are forced to continue focusing only on compliance. The cycle then continues.
This, however, is where the opportunity lies. Leveraging the existing negative sentiment is exactly how tax teams can educate their coworkers about the importance of investing in the right supporting software to become more strategic. After all, it’s probably not a lack of talent that impedes tax teams from reaching their true potential, but rather a lack of supporting tools to enable them to do their jobs more effectively.
The best way for tax teams to become more strategic is by first mapping out the operational limitations that force them to only focus on compliance. After these roadblocks are identified, it’s easier to explain what can be done with better support and tools. In the case of insightsoftware’s Longview Tax, professionals are able to automate many of the tax reporting processes that currently take up most of their time. With these considerable time savings, they can use the product to map out different scenarios with actual and forecasted finance data to make their own strategic suggestions from a tax perspective.
- Watch insightsoftware and Deloitte discuss how to manage tax forecasts
- Read how top tax teams are responding to the latest global disruptions
These arguments have already been made and won in many organizations. In fact, within the same webinar, a large number of attendees (67%) reported that they faced particular strategic barriers within the realm of tax and finance forecasting. If an organization struggles with its strategic forecasts, then it only makes sense for the tax team to push for executive backing for a solution that boosts these capabilities.
What’s important to note is that the tax team’s work often hinges on the quality and timeliness of the finance data that underpins their forecasts. Better integration with finance systems, finding ways to improve the consolidation process, or increasing the granularity of the data available to work with will end up providing both the finance and tax teams with enhanced collaborative capabilities based on high-quality, accurate data.
Tighter collaboration between tax and finance teams inevitably leads to better forecasts and far more opportunities to recognize the invaluable strategic impact that tax teams can truly have on their organizations.
For a visual breakdown of the insights learned from insightsoftware’s recent polls, check out the infographic below or contact us to learn more.