Our 2009 study showed that the tax departments that add the most value to their companies are also the ones that paid most attention to three key areas in conducting their daily activities:
The new survey discusses the progress of tax departments in these three areas. The findings show that tax departments are markedly improving in the area of accountability, and are making some strides forward on standardization and efficiency. However, tax departments still seem to have much more work to do on increasing their connectivity, integration and alignment with other functions.
The focus on these areas makes intuitive sense. Clear accountabilities can ensure that the tax department strategy is aligning with and supporting the wider company or enterprise strategy and that tax department goals and performance measures are agreed upon with key stakeholders. Standardization of processes and technology improves consistency, quality and efficiency, allowing tax teams to spend less time on compliance and more on value adding pursuits. Connectivity and participation with all parts of the company -— from boards and senior leaders to other functions such as Finance, Treasury, M&A, Marketing, IT, HR, Sales and Procurement — are key to ensuring a company’s tax affairs are well managed while boosting the tax department’s value, profile and influence.
The survey reveals that forward-thinking tax directors face a difficult dilemma: as tax compliance burdens and disputes continue to mount, their departments will meet greater challenges in managing these obligations while improving their performance and focusing on the more value-adding aspects of the tax department’s role.
Given this dilemma, this current survey shows that the lessons of our 2009 report — transforming the performance of the tax department requires getting accountability, standardization and connectivity right — are now even more important.