Sonia Randhawa

The systems used by tax authorities to monitor transactions, report on transactions, and secure tax revenue are increasingly built for the purpose of transparent exchange of information in real time. Governments are therefore seeking faster access to transaction data to reduce tax disparities, reduce fraud and boost economic activity.

Compliance therefore becomes central as chief financial officers realize that the wealth of real-time transactional data that is the result of this government demand is a strategic asset that unlocks tremendous enterprise value.

So what role should a CFO play in an organization's tax compliance strategy? And how can they ensure it's treated as a driver of business growth and not just a functional requirement?

CFOs can and should take the lead in modernizing the fundamentals of tax technology and compliance, taking into account team responsibility, technology, trust, and innovation.

team

In a survey conducted at the CFO Leadership Conference in October, Sobos asked a select group of attendees how they staffed their tax departments. Only 10% of respondents said they had a dedicated tax team, but more than half said they divided tax functions among finance team members.

This begs the question: How can finance teams navigate the tax and regulatory compliance landscape without a dedicated tax team?

To assemble an effective tax technology team, the CFO must first work with the chief information officer or chief technology officer. But you also need to look at all departments affected by tax compliance and related regulatory requirements across the enterprise, including legal, sales, marketing, billing, and accounts receivable.

Having a dedicated tax team can improve your organization's efficiency, adaptability, security, and data insights while reducing risk.

technology

CFOs surveyed indicated that their employees want to be able to spend less time on compliance management tasks.

Using technology to visualize transactional data can help inform decision-making, increase efficiency, and reduce compliance risk, especially when all tax and compliance data can be viewed in a single view. Masu.

trust

When managing tax processes, CFOs and CIOs often prioritize values such as time savings, infrastructure costs, and reduced audit risk. These are all important considerations when looking for more value from technology.

CFOs must also focus on the organization's vision and growth strategy, as well as the activities of up to 19,000 tax authorities around the world. As regulatory changes such as e-invoicing mandates and ongoing transaction management strengthen compliance at the heart of transactions, enterprise resource planning and other corporate finance systems become just one piece of the puzzle.

Modern compliance demands require four basic standards:

It connects to an ecosystem of partners, financial technology, and government agencies to help create an accurate, real-time ledger of transactions, inventory, fixed assets, and payroll information.
In addition to identifying and verifying each party to a transaction or obligation, you must accurately judge every transaction and ensure that every transaction is compliant in real-time.
This should ensure that you can report immediately, file correctly, and maintain fidelity between your company's records and the various tax authorities.
You need to support your ability to use compliance data to reduce future risks, optimize business processes, and use it as a strategic advantage to drive business growth.

conversion

As generative artificial intelligence advances, the latest tax technology and the companies that adopt it have the potential to realize extraordinary business value. Such innovations have the potential to reduce risk, streamline financial operations, and improve insight.

Generative AI allows you to examine past performance to predict future regulations and use those changes to generate scenarios to evaluate potential business outcomes. CFOs will benefit from this increased ability to prepare for changes before they are announced.