What if digitisation changes your tax function?

Artificial intelligence, far-reaching automation, digital platforms, ERP cloud systems and one data innovation after another; the many changes we see around us make it clear that digitalisation is deeply affecting the way we work. For many tax and compliance professionals, technology is therefore at the top of the agenda. At the same time, they find implementing new technology one of the biggest challenges. What does it take for a successful digital transformation? PwC experts Stan Berings and Sabine Barlage outline three prerequisites.

Finance departments are processing increasing amounts of data. These are often of strategic importance to the organisation. Especially with the growing compliance burden, technological solutions can make a big difference. To continue performing compliance tasks optimally, technology that reduces manual work and increases automation is therefore more important than ever. 

However, the deployment of technology , the so-called ‘digital transformation’, does not always go smoothly. For instance, we hear from many customers about unsuccessful implementation processes. These are often associated with excessive costs, low returns and unfinished change processes. The transformation to and adoption of a new, more automated way of working proves to be a major challenge.

An increase in risks

Whereas until recently technology was adapted to the customer's needs and working methods as much as possible with all kinds of additional modules, today's tools increasingly work according to standardised processes and set-up. This requires adapting existing processes to the tool. Unfamiliarity and uncertainty can lead to the thought: this is too complicated, let's stick with the old familiar spreadsheets. However, with the rapid growth of compliance obligations and data usage, this will lead to an increase in risks.

Outcomes PwC's Future of Tax Survey 2023

Tools offer many opportunities, but maximum achievable potential is not being exploited

• A third of respondents in our survey make no or very little use of technology tools specifically for tax and reporting requirements. Almost half use no or very few smart automation solutions.
• 45 per cent of respondents believe that better alignment between financial change and tax and compliance processes is the best way to add more value to their organisation. 
• Implementing new technology is seen as one of the five biggest challenges for the tax function in companies.

Success condition 1: Start with a strong digitisation strategy

How can technological innovations actually contribute to your company's tax function? In our view, a clear digitisation strategy, supporting your tax strategy and organisational goals, is indispensable in this respect. That is why, in our so-called Connected Tax Compliance approach, we always start by formulating a vision on how to integrate technology in your tax and compliance department. Together with you, the client, we draw up a clear data strategy, followed by a concrete implementation and digitalisation plan. In doing so, we identify the current problems, map the opportunities for improvement and outline a route to achieve them. Of course, we also assess the risks and consequences of your company not taking action. That way, you can move towards digital transformation with confidence. 

Success condition 2: Ask for support from an implementation partner

In the tax function of the future, data are instantly translated into relevant insights. Based on these, a company can make better and faster strategic and operational decisions. An implementation partner with the necessary expertise can help you achieve this future-proof situation. You will then have greater certainty that your organisation can make full use of the opportunities around digital innovation. This implementation partner can help your company draw up a convincing business case with a clear budget and return on investment. This is important because support from stakeholders - both internal and external - is essential for the long-term success of new technology in your business.

The right partner is also crucial in meeting implementation deadlines, so you don't suffer from endless change processes. This partner will ensure that the new technology is actually used. 

Success condition 3: Consciously choose the right digital tools

With a clear strategy and a good implementation partner, you will find it a lot easier to choose the right digital tools. Which data and technology solutions will help you create a future-ready tax function? Do you need smart automation solutions so you can comply with all reporting obligations? Or tools that contribute to a more efficient tax process? Together with your implementation partner, choose the solution that really moves your business forward.:

Experience in technology, data processing and transformation

Finally, it is important to realise that to apply technology well, your employees need both tax and data skills. That combination will only become more important. Eventually, almost every tax function will require experience in technology, data processing and transformation. If your organisation has and can deploy all these skills, you will have a much better chance of successfully implementing new, relevant technology.