Global Compliance: Get on the Wave or Get Stuck at Sea While Sharks Circle.
Some people call it transformation, others disruption. Change is coming in the broader world and in business. The world and business environments are less certain as economies slow. Businesses need to streamline and sharpen their focus to survive. Tasks are either taken away from traditional roles and outsourced or placed on existing staff as increased demands.
With all this change and uncertainty, you may feel as if you are waiting out at sea, the sharks circling and the waves around you getting bigger and bigger, with no way to shore. Eventually, if you want to get back to stable dry land, you need to pick a wave and ride it the whole way home.
If you have ever watched a televised surfing competition, you have probably wondered how competing surfers choose which wave to ride. To get a score, surfers must commit to and ride at least two waves. Waiting around without catching a wave will mean that they score nothing at all and lose.
Elite surfers can adapt to the changing conditions presented to them, allowing them to catch the right wave and guarantee success. This contrasts with amateur surfers who may stay in one place, using the same techniques and therefore missing all the opportunities.
At the moment, the approach in the tax and accounting world is more like that of an amateur surfer than that of an elite professional. Traditionally, organizations have looked at in-house strategies for compliance in one country alone, where compliance would generally form a portion, albeit time-sensitive and intensive at times, of a broader country- or region-focused tax or accounting professional role.
What Are Other Segments of the Enterprise Doing?
Tax and accounting teams can take note of how other segments of the enterprise approach change. Departments such as IT, HR, sales, and marketing have all experienced the need for change that harmoniously aligns people, processes, data, and technology. The main strategy that has enabled this change has been the centralization of work.
Traditionally, only transactional roles have been centralized and offshored, but organizations are moving up the value chain to compliance and, eventually, decision-making as technology enables it.
Within the area of global statutory reporting, there has been a push over the last five years for organizations to centralize their accounting compliance functions through shared service centers or global business service offerings (people who specialize in that process and function globally). In the tax world, this process is still in its infancy.
Leverage Data and Technology to Streamline Your Process
The only way to scale your staff and business with one global process, oversight, and controls is to make sure you standardize the process and use technology to enable your business function. Obviously getting the right people, location, data, and process is essential, but technology is invaluable in getting these working together in harmony.
Although global statutory reporting is not usually within the purview of the tax domain, tax is a user of the local country statutory reports and information. Global statutory reporting, in most cases, needs to be submitted before local country tax returns and has already gone through the local country sensitization walk to local books. If this process is centralized and standardized globally, then globally consistent and predictable reports and data can be leveraged to streamline the follow-on tax processes, such as local corporate tax compliance and transfer pricing.
Where to Start?
It is important to have a deep understanding of your current processes, people, and data so you know what needs to be improved and how technology can make a difference.
In reaching your goals, change is an evolving process. Looking at the individual components of people, process, data, and technology is important. However, to reach the ultimate goal, examining how these interact with each other is essential.
Always keep in mind that your goal is to develop a consistent and scalable process for all regions in which you do business.
People who embrace change, and ride the wave, are at the forefront of their industries. Their ability to be strategy-minded and to drive decision-making ensures that they are part of the solution and don't get left at sea without a wave to ride back to shore.
Progress is about owning the decision to change and then adapting, not just doing the same thing because you haven't been forced to change. Adopting change through a centralized and standardized approach to compliance is the next stage in the evolution of the tax and accounting organization. Investing in and leveraging technology to harmonize your people, processes, and data are no longer just nice to have, but essential.
By Tad Simons
Tad Simons is a technology journalist for the Thomson Reuters Legal Executive Institute.
|Printer friendly Cite/link Email Feedback|
|Date:||Jul 1, 2019|
|Previous Article:||TEI Submits Comments Regarding FDII and GILTI Deductions.|
|Next Article:||MSCI Inc. and Longview Solutions Deal With a Prior Provider Unexpectedly Pulling a Product From the Market.|