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The talent shortage in the accounting industry has strained resources, prompting companies to seek innovative solutions to these challenges. Increasingly, tax leaders are turning to technology to fill the resource gap. In a late 2023 study, more than three-quarters (78%) of respondents said they expect their tax departments’ tech capabilities to increase in the next three to five years.
Tax leaders recognize the potential of new technology but lack the time to manage or research these products. Implementing such technology is challenging, especially since they can’t pause their daily activities to take on a technology conversion project.
One way to address these challenges is to implement tax technology and transformation solutions with the help of a professional team that combines the technology, tax and industry experience needed for a successful implementation. This collaborative approach with the company ensures a smooth transition and optimized tax processes without hindering ongoing operations.
Here are some ways a tax department can benefit from tax technology and transformation solutions.
Tax Technology Assessment and Consulting
Many tax departments are still entrenched in an Excel-based environment, lacking automation and relying on manual calculations and work papers. They might be seeking to consolidate tax information from various systems or streamline data spread across multiple platforms. Alternatively, they may already utilize technology but are searching for a different solution or software that better aligns with their specific workflow.
Tax technology professionals can create customized implementation plans to optimize a business’s tax function. By identifying pain points and engaging in conversations with tax directors, they can assess operational bottlenecks within tax departments. This assessment can lead to identifying innovative solutions to address these issues.
Initiating a conversation to outline specific needs is crucial for achieving an efficient tax process. Tax technology professionals can evaluate the existing tax technology footprint and processes, highlight the benefits of various technology solutions and provide targeted feedback and recommendations.
Automating Tax Compliance Processes
Financial professionals often perform reviews on areas such as the balance sheet, income statement and cash flow statement to ensure the accuracy of financial statements. This process, typically conducted multiple times per year, can often be quite manual and is usually done in Excel. Another common task is reviewing a trial balance, a financial report showing the closing balances of all accounts in the general ledger at a given point in time. Tax directors can receive multiple versions of the trial balance from the accounting department and need a way to quickly identify any changes. Conducting a manual review to determine what changed and what ties out can be time consuming and prone to errors.
Tax technology professionals can create automated validation solutions that allow users to input both versions of the trial balance, run the app (or application, or software) and receive a summary report of all changes. This automated approach is especially beneficial for files and forms that need regular review. Whether it’s for a quarterly or one-time review — such as during the conversion of systems from one ERP to another to ensure balances tie out correctly — these solutions ensure accuracy and productivity.
For private equity firms, managing and validating partner investor information, which is often painstaking and data-intensive, is another challenge. Different types of partner information validation checks can be streamlined with the help of technological solutions.
Depending on a business’s needs, tax technology professionals identify, design, implement and execute the most useful projects using advanced software and tools. The goal is to accelerate tax department operations, reduce costs and enhance overall quality. These professionals also automate manual tax processes into efficient workflows, develop agile tax models adaptable to changing regulations, streamline data integration from various systems and propose innovative solutions for leveraging tax data to guide business decisions.
Tax Transformation Co-Sourcing and Outsourcing
Tax technology professionals offer various services tailored to a business’s unique requirements. They can work as an additional resource for internal tax teams in a hybrid approach or as a completely outsourced tax function. Their services include facilitating comprehensive tax technology buildouts, providing standby support and project management expertise, collaborating with internal staff as co-sourced partners to enhance team capabilities and empowering clients through tailored training and enablement in tax technology software usage.
Next Steps
At CBIZ, our tax technology team has the expertise to tackle even the most complex tax challenges. Connect with us today to leverage our unique blend of tax technology solutions and extensive tax and audit assurance knowledge for comprehensive support.
Copyright © 2024, CBIZ, Inc. All rights reserved. Contents of this publication may not be reproduced without the express written consent of CBIZ. This publication is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional advice. The reader is advised to contact a tax professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in connection with the use of this information and assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.
CBIZ MHM is the brand name for CBIZ MHM, LLC, a national professional services company providing tax, financial advisory and consulting services to individuals, tax-exempt organizations and a wide range of publicly traded and privately held companies. CBIZ MHM, LLC is a fully owned subsidiary of CBIZ, Inc. (NYSE: CBZ).
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