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According to a Deloitte survey of global finance leaders, over two-thirds of executives acknowledge that technological innovations will play a key role in the financial industry’s evolution. This is little surprise given advancements in machine learning and automation, which can now take on more and more of the tedious aspects of finance and tax. Minimizing the dependence on IT teams means freeing up time that professionals can use to focus on more strategic outcomes.
While technology has the power to change how the finance industry operates, it can’t do so alone. This transformational environment requires experts who understand both the depths of burgeoning technological advances, as well as the world of increasingly complex global tax regulations. With this in mind, how are roles in the tax office poised to change?
A New Breed: The Taxologist v. the Tax Technologist
Today, the term “taxologist” refers to professionals who are well versed in global tax policy, practices, trends and solutions. While taxologists often rely on supporting technology when making decisions, they tend have a stronger background in tax and accounting versus technology. As a result, taxologists frequently partner with IT professionals to tackle projects involving advanced compliance solutions.
Today’s businesses also need professionals with a technical knowledge of software that they can apply to address tax complexities, optimize processes and identify components that require customization. The ability to recognize and address the tax problems that automation or artificial intelligence could solve and apply these approaches is an increasingly crucial skill set, one that is not typically required of the taxologist.
Tax technologists can bridge this gap. The role requires extensive technology background in areas such as software programming and computer sciences, in addition to a deep knowledge of global tax intricacies. While taxologists often identify issues that could be solved with technology, tax technologists are tasked with using the technology to resolve those issues. These tax leaders must understand technology acquisition and have the ability to effectively evaluate vendors.
Born of Automation
The promise of artificial intelligence holds great potential for the tax function – helping to detect errors, organize data, assess audit risk and tackle repeatable processes and organize data needed for reporting and tax reform regulations. Automation and cloud computing improve efficiency for tax. Companies of all sizes can realize the potential of the tax function with automated, integrated tax processes that allow their tax teams to be strategic assets to the organization and drive business-level decisions based on tax data analytics.
This kind of efficiency is also crucial for a successful global economy. Ninety-five percent of OECD high-income economies have implemented some kind of electronic tax filing and payment system, including 21 economies in Europe and Central Asia.
Even with all that technology can provide–accuracy, greater transparency across departments, reduced risk and detailed reporting capabilities–companies still need humans to think critically and steer their tax functions into the future. Automation and the advent of machine learning make the role of human intelligence in the tax function increasingly valuable. Tax departments will have a greater need for taxologists that can build solutions within tax for tax professionals to produce strategic business insights. Data sets are merely numbers on a page without the correct interpretation.
Making Tax Technologists from Scratch
Today, tax technologists often start in a technical function and then transition into tax. While there isn’t a set path for the tax technologist, elements of a tech education from earning a computer science degree to learning programming language are crucial in this new role.
For those just starting down the path of a tax technologist, an education in computer science management information systems, or business with a minor in one of these subjects would prove useful. For those who already possess a background in tech and currently work within a tax function, working with data, learning SQL, and getting familiar with business intelligence or data prep tools can all be aids in the path to becoming a tax technologist. Understanding XML, learning a scripting language such as Python and learning to work with ETL (Extract, Transform, Load) tools can only further problem-solving capabilities.
Essentially, tax technologists need to garner the best possible understanding of tax and how to transform the data that it yields – as well as how you can report against it, for things like audit trails.
Meeting of the Minds
Tax technologists bridge the realms of tax and technology and can create and execute solutions to enable others to navigate tax complexity; taxologists are there to leverage those solutions to address tax complexity. With the growing and momentum-gaining prevalence of AI and cloud, tax experts who understand the function and roles of automation are growing more useful to their companies and the industry overall. In the business world, companies are increasingly going digital – and as a result, we are seeing a new kind of professional emerge. The financial industry’s needs now extend far past an affinity for numbers. In order to guarantee future success, tax departments should be ready to embrace the newest tax professional – the tax technologist.
Jen Kurtz is chief technology officer and resident tax technologist at Vertex, Inc.