According to a report issued by BNA, corporate tax departments are evolving into higher risk environments. A majority of corporate tax executives surveyed said that tracking the legislative changes is one of the biggest challenges they face this year; in addition to the burden of compliance and the challenges of implementing technology and automated tax systems. On top of all of these current challenges are the difficulties companies experience in hiring and retaining technically qualified tax professionals to complete work timely to meet tax deadlines. While corporate management teams continue to place more pressure on tax leadership, something has to give in this type of business environment. It is imperative C-suite executives provide tax leadership with what they need to mitigate the increased risks facing companies today.

Here is what management can do to support tax executives working in this very high risk environment.

1. Increase your tax department budget so the executives can get the help they need. The changes in tax legislative have been so pervasive nationally and internationally it is impossible to keep informed of it all. This is a herculean task for even the very best tax technicians out there. Significantly increase the budgets of your tax organization to add staff and use of full-time, part-time and remote tax help. By doing so, your tax organizations will identify tax savings that far exceed what you allocated to tax department budgets. Tax executives thrive on saving you tax dollars when given the proper resources to do so.
2. Tax reform created a lot more complexity. Federal, State and Local Tax auditors are very aware of low hanging fruit given most companies are unprepared for all of these changes. The amount of complexity corporate tax executive’s deal with today is not anything like they have ever faced previously. Corporate tax executives are concerned about handling multiple tax jurisdictions in the very aggressive enforcement environment. You should plan to have a dedicated tax professional to handle tax audits and another tax professional dedicated to tax automation. Otherwise you will pay the price down the road and it is costly. Get tax the help they need now.
3. Companies should always have tax leaders reporting to the CFO; they need them close. A lead tax executive reporting to anyone other than the CFO is a big mistake companies make as it removes tax leadership a step away from the business operations. When tax leadership is kept informed by the CFO and CEO of the business objectives, organizations increase tax savings and minimize overall tax risks. In order to access the very best tax executive talent, you need to know most tax executives will not want to interview for a leadership tax role unless it reports directly to the CFO. If you have tax leadership reporting to anyone other than the CFO, you have minimized tax leadership and will create a higher risk for your overall business operations. CFOs should always work hand in hand with tax leadership as they will learn a lot from them. The question is “Will they listen?”
4. Rapidly changing technology is another challenge facing tax executives today. Many corporate tax professionals are working with homemade excel spreadsheets that are unknowingly spitting out errors and miscalculations. This important issue was addressed in a previous blog titled “Big Mistakes Companies Make Using Homemade Excel Spreadsheets: Accounting For Income Taxes . If you do not have a technology strategy for your tax organization, invest in getting started now. Many organizations are now putting a technology strategy in place; and if you do not have a strategy in place yet start with the tax provision software Tax Prodigy and/or get organized with the Tax Calendar by Akore. These are easy software to implement and affordable for all organizations big, medium and small.
5. Companies will need to give their tax leaders and staff more compensation to compete in this market. If you have been searching for a tax executive it is not that easy as many of you are not receiving the number of applicants you once did on tax roles. The current tax talent pool is shrinking while the technical sophistication required in corporate of tax roles is increasing. If you are offering below market compensation you will have greater difficulty in retaining your current tax leaders and even more difficulty in attracting technically trained tax executive talent. Talk to an expert on tax executive compensation to make certain you are paying appropriately to keep the valuable and technically trained corporate tax experts you currently employ. We can help you on the subject matter since we are experts on the topic of tax executive compensation.
6. Companies have been wishfully thinking they could find the tax executive talent they need easily through advertising but this is not what really happens. We see many companies waste valuable time searching for a tax executive for months only to lose them at the offer stage. Save yourself and your human resources a lot of time by working with an expert in the highly trained field of executive tax search. Tax executives bring a unique set of technical tax skills built through years of highly technical training. Tax professionals are risk averse and generally not comfortable sending their resume into resume portal to unknown people collecting their personal employment data with no understanding of what they really do. We experience many companies trying to locate tax professionals they need on their own; however, they have been unsuccessful in locating tax executive talent. These companies could have saved themselves a lot of time and mitigated the company risk had they hired an expert in tax executive search to handle the search from the start. The risks to a corporation increases the longer these tax roles remain open. Over three decades, our executive search services division has been assisting organizations staffing their tax organizations nationally and internationally. We can help you.

Have a question? Contact Kat Jennings