Many tax department leaders hesitate to adopt advanced automation solutions that their tax preparers can’t handle. Essentially, they fear creating a black box that lacks transparency for updates. While we respect this cautious approach, it’s important to acknowledge that most tax preparers have only a limited grasp of MS Excel and technology in general. Consequently, their automation choices often remain confined to the basic features of Microsoft Excel. 

Tax departments can fully embrace technology by collaborating with professional Tax IT teams who specialize in creating and maintaining advanced automation solutions. These specialized teams (e.g. Tax Technology Solutions LLC) can design and maintain sophisticated automation tools such as Alteryx, Power Query, Power BI, and Robotic Process Automation (RPA). Additionally, they play a crucial role in elevating the overall understanding of technology within the tax department. By partnering with such experts tax departments can unlock the benefits of automation while ensuring efficient and effective processes.

While the concept of Tax Technology has been around for quite some time, most tax departments lack a dedicated Tax Technology staff. In some cases where technology teams do exist, they often consist of tax preparers who handle third-party vendor applications for data import and user access management. To fully leverage today’s powerful automation tools, today’s Tax Technology professionals need a strong IT background along with a high-level understanding of tax provision and compliance processes. An effective Tax Technology team member acts as a skilled Data Analyst, proficient in designing and maintaining advanced automation solutions using database technologies and the ETL (Extract, Transform, Load) tools mentioned above. Additionally, an effective Tax IT member should be adept at mapping tax form amounts back to the source GL or sub-ledger invoice details, which is crucial for audits.

Lastly, to be successful in incorporating technology in the tax process, the tax department leaders must be involved and supportive of the process automation changes that often encounter resistance by those who will ultimately benefit from it the most.