In 2012, the Sales Tax Institute prepared and distributed a survey to 1,243 companies throughout the United States. The survey was sent to tax department vice presidents, tax directors, CFO’s, treasurers and controllers.  Our goal was to identify the best practices used by tax leaders, as well as helpful tips that could be shared with others. The survey results were used to benchmark attendees at the Institute’s Tax Leader Summit held in the fall of 2012. In this post, we will share some of the key findings of the research as well as some of the key takeaways identified by the Summit participants relating to staffing the tax department.

The most important component to being a “best-in-class” tax department is having the appropriate staff.  One of the keys to this success is to maintain appropriate staffing levels.  An equal number of our survey respondents felt their department was appropriately staffed as felt that it was understaffed. However, only 20% of the companies actually have their staff track their time, and only 32% track the tasks within the department with an estimate of the effort required. It is a best practice to have these types of processes in place in order to be more confident that your employees accomplish as much as possible in a given week.

Development of your staff through training is one of the foundations of a best in class tax department.  Training should occur at every level of the tax department, and it should cover not only technical tax topics but other skills such as technology, communication and leadership as well. Only 37% of the survey respondents indicated that their companies require a set amount of training per year. Companies that don’t require their staff to expand their expertise and interact with others will have a hard time becoming a best in class organization.

Below are a few suggestions to help tax leaders staff the tax department:

•  Improve the interviewing process by incorporating behavioral questions into the process.  Consider having the individuals responsible for conducting interviews obtain training from the human resources department.

•  Develop a mentor network for all levels of personnel.  Consider asking leaders from other departments to mentor tax department staff.  The tax department leader should offer to mentor individuals in other departments.

•  Cross train employees to provide back up for key tasks to mitigate risk and ensure that that the absence of one individual cannot threaten a critical project.

Looking for the right mix of technical, communication and leadership skills will help identify quality personnel for the tax department, but they also need the passion.  Without passion for what we do every day, and the ability to make that passion visible to employees, we find it hard to encourage others to follow in our footsteps.

We hope that you can use the suggestions above to help make your tax department a best-in-class one.  We’ll be discussing the results of our survey and the above topic – along with other aspects of managing a tax department such as Budgeting and Forecasting, Data Management, and Funding the Department – in greater detail at the Sales Tax Institute’s “The Practices of a Best-in-Class Tax Department” webinar taking place on May 23.  The presentation, by Diane Yetter of the Sales Tax Institute, Kai Ranabargar of Tax Technology Group and Dr. LeAnn Luna of the University of Tennessee, will include many more takeaways and best practices that can be implemented in your tax department.  For additional details, and to register for the webinar, click here.