CEOs and the rest of the C-suite now rely on the CFO to act as a strategist. This means providing a financial plan that’s actionable as well as determining the long-term strategies that are vital to the future performance of the company.
Despite these complex and strategic demands, the average finance professional still spends nearly 50 percent of their time on simple, number-crunching tasks.
Tax provisioning is a prime example. It’s a daunting, laborious task for many companies—a seemingly never-ending process of estimating current and deferred income taxes while trying to stay on top of constantly changing tax regulations.
But with a change in approach, you can transform the numbers in your tax provision report into actionable steps for the rest of your company’s leadership. Here are a few tips for taking on a more strategic role as the CFO by using corporate tax provision best practices.
Tax Provisioning: How to Report Strategically
When it comes to the corporate tax provision process, you can either get bogged down in data collection and validation or focus on forward-looking strategic thinking and action. Which one do you think your company’s CEO will prefer?
The best strategic corporate tax provision report will have a combination of the following elements.
Go Beyond the Data
A large part of your tax provision report will be data-based. And that’s OK—your CEO needs the facts. Accurate information helps lay the foundation for better business decisions. But you should focus on more than just the raw numbers.
Make your tax data accessible by finding a way to craft a story with the numbers. Think about the presentation and the best way to visualize the data and results that you’re communicating. This provides the context needed for your CEO to quickly absorb your findings.
Report Key Data Points and Trends
Lead with your most important findings. Highlight key tax figures and KPIs that are tied to important company goals. This will make it easier to get to the point and prevent your CEO from having to dig to find the details they’re looking for.
Too much extraneous information and data right off the bat will muddle your message. Stick to the most important results. However, you can include links or additional pages at the end of your report to touch upon minor points that may be of secondary interest to your CEO.
Add the “Why”
As a financial expert, the importance of every calculation and projection may seem obvious. But it might not be quite so obvious to your non finance C-suite colleagues.
Tax data, especially, can seem less significant in comparison to other financial data such as performance analytics. But your company’s tax data holds a great deal of strategic value. Make it crystal clear why key points are important.
Provide the Next Steps
So you’ve presented your key findings, and you’ve explained why they’re important. Now it’s time to explore ways to leverage this tax data to improve your company’s future.
Are there strategic actions that need to be taken or problems that need to be solved? Note those with the data.
It’s important to view your tax data not as a static look into the past but as a proactive window into the future. Analyze potential tax scenarios, simulate possible outcomes, and project ahead.
Focus on Actionable Areas
When discussing the next steps, be specific. Any recommendations you make should focus on the areas of your company that are most actionable: governance, people, and processes. For instance, does your tax provisioning report affect your company’s staff or operational planning?
Growing companies in the modern economy rely on their CFOs to deliver more than just a tax provision. They need a CFO who knows how to lead, plan, and strategize.
With the right approach, you can elevate your finance and tax teams’ output from number crunching to high-level analysis and forward-looking strategy. And with the best corporate tax provision software, strategic tax analysis doesn’t have to be intimidating.
Unlock the strategic value of your data with Longview Tax, which offers a simple, flexible, tightly integrated tax platform with powerful reporting and analytics.