Do You Want To See Process Improvements in Your Tax Department?

Posted by Traci WheelercloseAuthor: Traci Wheeler Name: Traci Wheeler
Email: traci@redmoonsolutions.com
Site: http://blog.redmoonsolutions.com
About: Traci is a member of the executive leadership team and leads our sales and marketing efforts at Red Moon Solutions. She has over ten years of software business experience serving small and large clients in a variety of industries.See Authors Posts (120) on Dec 7, 2011 | 0 comments

You are not alone. Like most people in corporate tax departments today, there is mounting pressure to complete a growing amount of work more efficiently with fewer resources and less risk.   This will continue to be a struggle for tax departments in coming years and explains why at last month’s Corptax conference John Fiore and Ann Giffels from Ryan and their clients, Abott Laboratories and Bausch and Lomb had standing room only when they presented a case study, Process Improvement Calendar: What to Do & When to Do It.

Prior to starting the session, tax professionals in attendance were asked why they had decided to come. Answers included:

• Ability to tackle what’s next and how are we going to get there in the tax department
• Looking for better ways to scale what we are doing
• Need better ways to promote process improvement within the tax department
• Doing a lot of things two times or more and not implementing good processes

All of the above are frequently mentioned by folks in tax as they search for ways to make their tax departments better.  So what can you do to begin moving forward on tax improvements in your department?

Know Your Starting Point

What are the things that need improving?  Where do you want to focus your efforts?  John emphasized that all tax process improvement projects fall into three buckets, as follows:

• Compliance Driven – e.g., non-integrated systems or manual reconciliation
• Strategically Focused – e.g., integrated provision, compliance & planning processes or some M-1 automation
• Leading Practice – e.g., tax-sensitized source data or efficient org structure

Evaluate your own tax department and think about these buckets when deciding which project should be undertaken.  Once you have identified the some of the areas you want to tackle, you can start developing the plan for getting there.

Elements of a Good Plan

John went on to explain that a solid tax process improvement plan should include the following elements:

1. Vision – What is it the tax department is driving toward?  Define the goal, refine it and then communicate it to all stakeholders.  Collaboration and buy-in from all interested and impacted parties will be key to the success of your project!
2. Challenges – What kind of challenges could get in the way of your success?  Get them out in the open.  Focus on the areas of people, process and technology.
3. Solutions – What are possible solutions for the problem you have identified?  Research all possible ways you can tackle the problem.  Hold brainstorming sessions in the tax department to uncover solutions you may not have previously considered.  Look at other initiatives within the organization and the department that you might be able to piggy back your project on.
4. Summarize – Communicate your results and discuss recommendations.

Regardless of the type of process improvement initiative you decide to undertake in the tax department, it should present sustainable results, move you toward an integrated & total solution, facilitate capability & knowledge transfer and generate meaningful change.  For larger tax departments, John suggested that just getting visibility into all process improvement initiatives across each functional area (tax provision, compliance and audit) can flesh out the most important project to undertake.  Where will you get the most impact?

So, When Is The Best Time?

For calendar filers, November and December provide the best window for accomplishing any type of tax process improvement project.  However, John’s point was well taken in that the planning must start well in advance if a tax department hopes to have measurable results in a short period of time.  Focusing on quick wins that show measurable results is often the quickest way to ensure acceptance (and budget) for future projects.

Jim Ryan from Bausch & Lomb shared how their tax department has a continuous cycle of improvement.  They include process improvement as part of an indivdiual’s performance evaluation because they want to make it people’s responsibility not just an opportunity.  As Ann Giffels so aptly put it, “What gets measured, gets done.”

How do you determine the tax process improvement projects to undertake in your tax department?  Do you have a set time during which you can accomplish these projects?  Or does your tax department focus on continuous improvement like Bausch & Lomb?  I would love to hear from you in the comments below.