The Top-5 Tax Process Improvement Goals

In my last post, I discussed how the management of tax data is widely viewed as a root cause of tax process efficiency and effectiveness. I also mentioned Vertex’s recent survey on tax process improvement practices, which includes feedback from over 300 tax professionals.

When asked to select which taxation goals their tax departments were pursuing as a means of achieving process improvements, survey respondents indicate that data management issues loom large; their most frequently cited objectives include the following:

1. The time spent collecting the financial data required for the tax processes should be reduced.
2. The time spent completing the tax returns should be reduced.
3. Error rates in downstream tax processes should be reduced.
4. The integrity of the data should be improved.
5. The time available to review the tax data should have increased.

Four out of the five top tax process improvement goals center on data management issues as high error rates in downstream tax processes tend to be the result of upstream data management problems.

Of course, addressing these issues is where the hard work begins. This is evident in many of the comments submitted as part of the survey.

Some of these comments indicate that better data management will enable broader process improvements and lead to greater effectiveness across higher level issues:

• “Technology will be a primary enabler of improving our process.”
• “Automation is always a good thing because it allows the employees to work on higher level more complex issues.”

Other comments drive home the frustration that occurs when tax-technology initiatives fall short of expectations or tax and technical people are not speaking the same language:

• “Dependence on IT is a bad thing because IT support to tax has been very poor in my experience. I try to avoid relying on IT as much as possible. They provide poor customer service and are not fast enough.”
• “Been burned before in championing failed technology initiatives.”

Still other comments express a form of logic that most tax and technology professionals who have been involved with multiple tax process improvement endeavors would heartily second: “The tax function is like other areas of the business. If there is sufficient ROI, or risk reduction (avoidance of unfavorable outcomes), then the investment would be approved. Perhaps it is fair to say that there is minimal appetite for investing in tax-related process improvement until it has been cost-justified.”

In upcoming posts, I’ll share process improvement strategies, examples of process improvement goals and tactics that leading tax departments are using to realize impressive returns on their investments in tax data management improvements.