Data Management and Outsourcing Are Essential to Future of Corporate Tax Department
Tax executives at three international corporations share how their teams are handling evolving technology.
In an increasingly automated workplace, data management has become a top concern – not just among the IT professionals entrusted with keeping it safe, but also for tax and accounting professionals. At the Nov. 19 Bloomberg Tax Leadership Forum in Washington D.C., executives at several international corporations spoke about the changing responsibilities of the corporate tax department.
Paige Brown, general manager of property and sales and use tax at Delta Air Lines, said her team has meetings about data manipulation and related tools nearly every day. “It’s been a real eye opener,” she said. “It’s exciting to see what it can do and how it can improve our ability to be more successful.”
After Delta’s bankruptcy and merger with Northwest Airlines, the airline’s tax department struggled to meet data requests due to the sheer volume of information it handles. Just in the catering department alone, Brown said, there are 4,000 codes for what passengers can order on flights.
When they would pull data for a sales and use tax audit, “most of the extractions of our data would just time out all of the software systems that we tried to use,” Brown said. “It became very clear very quickly that we had to change our focus and understand our data more, which meant we had to then move out of tax and into the IT department.”
WW International (formerly Weight Watchers International), is automating processes whenever possible, said Rebecca Anavim, tax counsel vice president of global tax reporting and planning. She explained that her department is, “looking at what we’re spending a lot of hours on,” such as fixed assets and state apportionment, and learning ways to streamline those processes.
Though the company has a clear need for innovative software, finding an optimal system is a challenge.
“Tax compliance software has just been incredibly frustrating. I’ve gone through two different seasons of compliance using two different vendors, and I’m not happy with either one,” Anavim said. “We’re just really getting at that tipping point – with the amount of forms that need doing and not having a lot of value-add there with tax compliance, is it time to think about outsourcing?”
Paul Kohout, vice president of tax at Lionbridge, and his team have also been using outside contractors, largely to help the department implement new systems and learn how to use them efficiently.
“When you’re trying to build out that first Excel model, and you’re trying to understand the calculation,” he said, outside experts are helpful. “There are a lot of very detailed questions that go out back and forth to the people we use mostly as subject matter experts to help us build those models out.”
Meanwhile, at Delta, outsourcing tasks like monthly and annual compliance frees up the tax team for higher-level work that comes with new challenges, such as tax law changes, new subsidiaries, and mergers, Brown said.
“It made sense to partner with someone who could take that off our plates,” she explained. “Outsourcing is really filling those needs.”