I recently had lunch with a leader of a tax department, and as we were talking, it struck me as to the many challenges tax departments face.
Challenges may include:
- Finding the right people (level of experience, personality, culture fit)
- Knowing how many people the tax department needs to provide value
- Justifying and getting approval for how many people the tax department needs
- Determining how to structure the tax department (by tax type, by company, by some other mix)
- Getting buy-in from other company departments to obtain information at the right time, and complete special projects to provide value (i.e., implementing smart ideas that reduce taxes without creating a high level of controversy risk, and positively impacting other business functions (i.e., finding ideas that align with business objectives))
- Outlining and determining the best process for compliance, audits, provision and planning functions
- Implementing and utilizing the right-fit software and technology solutions
- Managing external consultants and determining which ideas to use and which ideas to ignore
- Not getting stuck in the 'analysis paralysis' zone
- Not 'dying by meeting'
- Doing more with less
These are just a few of the challenges. I know there are more. Tell me by leaving a comment or send me an e-mail at strahle@leveragesalt.com.
Key Points
The point is, tax departments must keep moving forward. They must feel like they are providing value and are respected within the company. Compliance cannot be the only thing.
Also, people within the tax department will always know more about the company than external consultants. Consequently, regardless of the pre-packed or customized planning ideas - some that may be risky, or some that, as they would say, are 'low-hanging' fruit - the company must follow their own risk compass.
External consultants should not act like the hero. They should help tax departments become the hero.