Preparing for Tax Transformation – The starting point
Attempting to transform the tax function without knowing exactly where you’re starting from will prove fruitless or frustrating at best.
Focused on creating a streamlined and efficient approach to tax management, tax leaders need to secure executive buy-in for an audit of the current system – the people, processes and technology.
The first step is to break down the tax function across direct taxes, indirect taxes, transfer pricing, employment taxes and financial and statutory reporting. This will help you sketch a map of the current tax landscape.
It’s critical to know where you are starting from – and providing a high level view of current practices will highlight any risks associated with the current regime as well as point to the strategic benefits of a streamlined, modern and sustainable solution. Shared with the CFO, CEO and board, this assessment will communicate to them what is at stake and what you are trying to achieve.
There will be minimal costs involved in the initial audit and mapping phase – but having senior executive buy in at this stage gives you a firm foundation for future discussions.
An initial audit also provides valuable baseline metrics against which improvements can be measured. How many people are involved in creating a report? How long does the reconciliation phase currently take? What review bottlenecks exist? How long does it take to complete the BAS?
This analysis phase should not be rushed. Proper preparation for reform is critical to the transformation’s success and sustainability.