How CPAs can solve tax operations and technology puzzles

The answer is at the intersection of strategy and technology.


Video transcript:

The interesting part about the tax operating environment from a technology perspective is that you have tax systems and then you have source systems. So most CPAs and accountants will be familiar with systems such as your ERP or your general ledger, your FP&A systems, and other management systems that are in place that collect and provide information downstream to the tax process. Technology becomes a challenge in the operations of your tax department because (a) it’s multiple systems that are not integrated, and no matter how integrated you can make your tax systems or your source systems, there is still often a disparity between where the data is originated and where the data needs to go to produce a tax result. When you take into account some of the larger organizations that have thousands of entities globally that you are trying to collect this information from, it becomes a problem that’s often difficult to solve. With reduced man-hours and professionals who are actually responsible for producing the tax results, the technology burden becomes much bigger.

The spend for the company, our clients, or the corporation is much larger and until you really get organized and understand the other elements of the framework, the technology can spin out of control, and either you have a bunch of systems that don’t really solve the problem for you or you have extra spend. Maybe you have some great systems, but you have spent way more than you can afford to spend on that, and so that’s where the strategy, the controls, the people, the process, all of that comes in together to really create the right operational and optimal model.

So let’s take this scenario or an example of two companies that will merge together. From a tax perspective, tax actually affects everything, and oftentimes the companies will have two completely and unique operating models for how they are preparing different elements of their taxes. And when I say different elements, I mean you have income tax, you have property tax, you have other indirect taxes like sales and use tax, and there are even ones beyond that. But just to give the example that there are multiple tax considerations, multiple systems in play, and now you have multiple companies that are potentially operating in multiple countries and jurisdictions around the world, and you have to find a way to bring that together.

So the way that we want to focus our attention, especially as advisers to businesses that have these needs, is we need to understand the foundation that will help get us from point A to point Z. And if in this particular example, the objective is to successfully merge two separate entities into one common set of tax strategy, tax technology, and frankly, tax operations across the board to achieve the best result.


The AICPA Tax Information and Operations Management (TIOM) Task Force strives to educate and bring needed focus to the areas of tax operations, including information management, process optimization, and the technologies and strategies that support all tax professionals.

The members of this task force are senior-level tax professionals from diverse backgrounds (public practice, consulting, and business and industry) who have built their careers by fostering innovation—constantly working to enhance the future of tax-related processes and technology in an age where business interests are increasingly taking on global dimensions.

We write articles, speak at high-profile conferences, host webcasts, and publish other guidance to help businesses and firms—of all sizes—improve tax-related information management and processes and, as a result, maximize their bottom line. We promote the CPA name and the esteemed CITP and CGMA credentials, and ensure CPA tax professionals remain the premier provider of tax services.

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