An efficient tax department is structured to ensure corporate tax policies are implemented, that the right mix of personnel are hired and retained, and that constantly-changing processes and technologies are leveraged. Are today’s businesses prepared to make the investments in people, processes and technology required to position tax department to balance company priorities and face the challenges of the future?
According to VATBox recent survey, budgets for VAT compliance, VAT advisory services and technologies are growing, with two-thirds of companies with annual revenues of over €25Bn allocating over €100K. The budgets of a fourth of these large companies top out at over €750K. With almost half of all companies plan to increase tax technology budgets over the next five years. These include over 70% of companies that already increased spending over the previous five years – demonstrating their appreciation of how valuable tax technology is in enabling them to adapt to the changing business environment quickly.
In addition, close to 30% of companies that did not previously invest in tax technology plan to increase their budgets for tax technology in the near future.
A survey byKPMG, strengthen this point of view highlighting that companies recognise the need to invest in their tax departments, both in terms of staffing and by increasing their use of tax-related software. A strong majority of respondents feel that the trend concerning the organisation of tax departments is moving toward greater standardisation and centralisation. To that end, KPMG advises that companies invest in:
- Overall leverage of enterprise finance IT systems for tax purposes
- Use of consolidation system data for tax purposes
- Understanding of tax data needs by IT resources
- Investment in tax-specific technologies
- Use of tax data warehouses
- Tax sensitisation of business forecasting systems
Many of these topics were covered at the recent Tax Transformation Summit in London, where tax professionals from the world’s leading brands came together to discuss today’s hottest topics in the tax function: transparency, transformation and technology. Remco Dewaerheijt, VP Tax & Product Strategy for VATBox, led a panel of industry experts in a discussion about investments needed in tax departments.
John Shuker, Indirect Tax Partner at PwC, shares that the consulting role has “changed from being advisory-based consultancy to one that is focused a lot more on processes and systems, and helping businesses work out exactly what problems they have in the business that need to be solved.”
In fact, optimising tax department performance can improve reporting, reduce errors and risks from non-compliance, improve business transparency, and create a source of business data that drives analytics for both the tax department and the business overall.
Shuker says it’s sometimes easier to start with a new solution than to modify an existing one. “Some of the tech companies have adopted systems earlier than some of the older multinationals. And that’s probably because it’s easier to start with a clean slate than to try and modify something that’s already built.”
Click here to watch the entire Tax Transformation video series
If you’re a company looking to invest in your tax department in order to ensure success in today’s digital times, VATBox can help.
To learn more about how VATBox’s innovative platform empowers financial professionals to make strategic decisions based on their transactional data while ensuring unrivalled compliance and savings, click here.