Many tax department leaders hesitate to adopt advanced automation solutions for fear of disrupting the status quo. While that approach is perfectly logical, it is not a sustainable business decision. In most cases, the main reason for avoiding automation is an honest lack of understanding of technology and therefore, the fear of losing control. The reason most tax professionals favor manual processes is because anyone with limited Microsoft Excel knowledge can open a Workbook and follow the logic that produces the desired reports. On the other hand, automated procedures take away that type of visibility and in a way create a black box for those who are unfamiliar with advanced automation tools like Alteryx, Bower BI, and database concepts. Please forgive me for stating the fact that most finance and tax professionals have very limited grasp of MS Excel and technology in general. Consequently, the finance and tax leaders find it easier to shy away from automation and remain confined to the basic features of Microsoft Excel.

The fear of the unknown is understandable, but avoiding efficiency is indefensible. Tax departments can fully embrace technology by establishing long-term partnerships with professional Tax IT teams who specialize in creating and maintaining advanced automation solutions. For example, at Tax Technology Solutions LLC, we can work with any tax department to gradually introduce technology and provide the proper training for the automated solutions to be maintained by the client, if they so choose. We also offer customizable maintenance plans to ensure our clients’ investments yield great ROI for many years.

As an alternative to partnering with an external consulting firm, tax departments can of course hire their own Tax IT teams. While some departments do have an in-house Tax Technology team, unfortunately, most do not have the proper training and education to make a significant contribution in terms of process automation and efficiency. To fully leverage today’s powerful automation tools, the Tax Technology professionals need a strong IT background along with a high-level understanding of the process. An effective Tax Technology team member acts as a skilled Data Analyst, proficient in designing and maintaining advanced automation solutions using database technologies like the ETL (Extract, Transform, Load) tools mentioned above. Additionally, an effective Tax IT member should also be capable to reverse map the tax form data back to the source GL or sub-ledger details, which can be very valuable to the state and Federal audit.

In conclusion, the future of tax is digital. Replacing the high-touch status quo with high-tech solutions will make the tax profession more rewarding and less stressful. Unfortunately, process automation often triggers fears of job insecurity, leading to resistance from the very tax preparers it aims to benefit. Therefore, the first step in automation must always begin with the tax leadership’s unwavering commitment to technology. Investment in technology is futile if its adoption remains optional.