4 Skills Every Tax Professional Needs in Order to Thrive

by Chuck Kosal

The tax profession is notoriously complex and constantly changing. Here are the skills needed to navigate the evolving landscape.

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When the wall that physically and symbolically divided the free world from East Berlin and the Soviet Union came down in November 1989, I was serving in the United States Army and stationed in West Germany. To this day, I keep a piece of the wall on my bookshelf behind my desk. It serves as a reminder of an unforgettable experience and of the fact that change is a constant force in our lives, although it may not always be as obvious or sudden as it was on that day.

When I reflect on that evening, I have a myriad of memories of the experience including a little fear of what might happen as the wall began to crumble (and the chaos began) and the knowledge that my parents had no idea where I was or whether my unit played a role in the potential need for protection of West German citizens. That memory is vividly clear to me because I can also remember another amazing experience that evening when I first used an early model cell phone to quickly call home…it was in a bag that looked like it was full of bricks and was connected to both equipment in the trunk and the antennae on the roof the vehicle. It had its own battery back—and that 10-pound battery provided about twenty minutes of talk time. And interestingly, with all of this amazing equipment supporting my call, the reception was barely audible resulting in a lot of yelling and the ultimate five ‘good byes’ as we talked over each other.   

As I am sure you have deduced (amidst the laughs of memories of this old technology), there was no ability to take a selfie in front of the downed wall—let alone a social media account to post the photo—and no option to video chat so my parents could experience the moment with me. At the time, I felt fortunate to be able to make that call and to snap a few pictures with my 110 instamatic Kodak camera. 

When I left the Army and started my career in the tax profession more than 20 years ago, I received my phone messages on pink “while you were out” notes which included hand-written details about who had called and why. I carried a rectangular briefcase, a day planner with sections divided by color to keep me organized, and we circulated documents for review in manila folders. Tax returns were completed by hand, then often typed, copied, and driven to the client to sign and file. We kept copies in metal filing cabinets (gasp). The process of collecting data, organizing it, making sense of it, and transforming it into usable information was manual and time-consuming. Yet, this very manual process did force us to spend time understanding the data and analyzing the tax law and its interpretations. 

Fast forward to today, everyone has personal laptops, tablets, and personal data assistants, and files are shared and transferred digitally. Where once every calculation was done by plugging numbers into a calculator; now, we have the ability to do complex calculations and modeling using tools like spreadsheets, visualization tools, and issue-specific applications with calculation engines. Much of the old work has been transformed from analysis to a process. We’ve also seen shifts in the way tax professionals communicate. No longer do we need to rely solely on landline phone calls, message pads, or even emails. Now, we have file sharing services, video conferencing, instant messaging, and apps to enhance the way we work with and serve our clients. 

When I consider the changes that I have experienced in my lifetime, technology innovations might not be as dramatic as when I saw the Berlin Wall fall, but they have dramatically shifted the way we work and how we serve tax clients. Where once the data collection process took weeks or months, it is now automated in minutes or hours. The risk of errors has been significantly reduced, creating more confidence and greater efficiencies. Similarly, we no longer operate primarily with dated information, and instead have gained access to real-time data—empowering us to help our clients make strategic decisions. 

Spending time collecting, organizing, and transforming data in the years before the explosion of technology innovations such as AI, RPA, and cognitive, to name just a few, helped us understand the “why” and “what” of the tax law and reporting requirements. It helped us better understand our clients’ businesses and know how to organize and report their data. It might be fair to ask whether the introduction of these technologies drives the same result. It is my belief—although it may sound counterintuitive—that technology is actually forcing us to spend more time honing our technical skills because of the automation of many of the steps we used to rely on to answer those same “why” questions. Technology is a great thing, and it has changed how we develop as professionals.   

Just as using a cell phone in 1989 to call my family wasn’t what made that moment memorable—it was what I had to say—it’s the skills of tax professionals in addition to the technologies they employ that create value. In order to take full advantage of the symbiotic relationship between human and machine, with technology evolving constantly, I believe there are four critical skills every tax professional needs to develop or improve in order to thrive. 

First, they must have technical acumen. I cannot stress this point enough. Success is about so much more than plugging in numbers—it starts with a strong understanding of the industry, business trends, and regulations. Fundamentally, tax professionals must understand tax law in order to do tax. Tax legislation and the regulatory landscape are evolving within the United States and tax jurisdictions throughout the world – to provide the most value to their clients, tax professionals must understand what changes are occurring and why. As stated, some may observe that technology has removed the manual processes that allowed us to intimately understand the information we are analyzing. It is for this reason that technology requires tax professionals to spend the time to hone in on specifically what the law and interpretations require to be even more adept at quickly leveraging data and applying technologies successfully. I have memories of my first experience with a trial balance and tax return and trying to understand where each account mapped to the return and why. Technological advances are helping tax professionals deal with exponential changes that are reshaping the broader tax landscape – such as regulations, tax reform, and globalization, to name a few – but it has eliminated the process of learning about the why and it is crucial to never forget that the underlying technical skills will always be necessary. The implementation of great data automation is only of value if the professionals reviewing the efficiently collected and organized data have the technical skills to do something with it.  

Second, tax professionals must be willing to embrace change. The pace of change is not slowing down—it’s speeding up. Professionals must adapt, or risk being left behind. At Deloitte, we know that new technology will never replace the value of high-performing tax professionals, but it will help them deliver even greater value to our clients. Technology will change the way they work–likely many times throughout the course of their career. Professionals must embrace those changes by using new tools, or even better, helping to conceive the technologies that will influence the way we work and serve clients in the coming years. 

Third, tax professionals must be consultative. Once perceived as the robotic number crunchers in the back office, technology has allowed tax professionals to embrace expanded consultative qualities and skills. Every moment saved by technology has allowed tax professionals more time away from their desks to build relationships and consult with their teams and clients. Tax is moving to a more integrated and strategic function within an organization and tax professionals need to take a forward-looking approach by communicating effectively across the enterprise with a wide range of stakeholders. The ability to build rapport within an organization, influence decisions across business functions, and communicate complex tax issues in simple business terms will be essential skills. Technology has provided all of us the opportunity to evolve from reporters of historical events to predicters of tax impacts of potential transactions, trades, or investments. All of these examples require context and dialog, and tax professionals need to be able to utilize technology to support their planning and confidence in discussing predicted outcomes in the future versus only the taxes owed from a year ago.  

Lastly, tax professionals must be collaborative. Building teams that combine deep experience in tax laws and regulations, data and analytics, and sector knowledge opens the door to potential new solutions and opportunities for our clients. 

Technology is only one part of the equation. That is why it is crucial that tax professionals possess the foundational skills needed to succeed today and in the future. They must be focused on expanding industry knowledge, embracing change, and tapping into a wide range of experience. The time will surely come–probably sooner rather than later–when today’s tax technologies are as outdated as those early big brick mobile phones. Technology will increasingly influence the way tax professionals work and redefine how we best serve clients—now, and in the future. It will provide more insights, more time, more transparency, more accuracy, and a more dynamic experience (among other things).  

As the tax technologies become more advanced, you must ask yourself…What will you do with more?  

Chuck Kosal is Chief Transformation Officer at Deloitte Tax LLP.