We have found that there are five commonly referred-to factors affecting the ability of a tax team to execute; the increased volume and complexity of regulations, speed and accuracy of data, over-reliance on manual effort, an underinvestment in technology and the size and skill-set of the tax team.
VOLUME AND COMPLEXITY OF REGULATIONS
The first factor is coping with the increased volume and complexity of regulations so that the businesses are protected from financial penalties or reputational damage in the event of non-compliance. Linked to that is the ability to manage compliance across multiple jurisdictions and being able to respond to tax authorities when under scrutiny.
The second is managing the speed and accuracy of data. Most data is supplied by spreadsheet and requires manual collaboration between the tax and finance teams both locally and internationally. Ultimately getting to a single version of the truth for tax computations that are consistent and can be analysed quickly takes time and introduces substantial risk to compliance filing, audit notice responses and general confidence in the quality of data.
SPEED AND ACCURACY OF DATA
OVER-RELIANCE ON MANUAL EFFORT
The third factor is the substantial manual effort required to complete the core end-to-end compliance cycle, which is made worse by the fact that quite often there is a lack of defined and documented activities, processes and controls. Generally speaking, the ability to complete the compliance cycle is entirely reliant on a few key people, which presents a business risk.
The fourth factor is underinvestment in technology to automate manual activities, enforce processes and controls, manage the risk associated with the completion of the compliance cycle, provide insight into continuous improvement and calculate and submit tax computations.
UNDERINVESTMENT IN TECHNOLOGY
TAX TEAM SIZE & SKILLSET
Last but not least are the number of resources available and the changing nature of the skillset required from a tax professional, specifically individuals that have the tax technical skills along with continuous improvement of process, controls and technology.