Undoubtedly, the pandemic continues to be top of mind across all organizations and sectors. But for some departments, such as the tax function, the passing of the CARES Act of 2020, which includes tax-specific changes, means that tax operations will be impacted long after the pandemic is over.
To that end, Bloomberg Tax surveyed tax professionals and received 1,202 responses from those at public and private corporations with at least $500 million in annual revenue to explore the impact that Covid-19 has had and continues to have on corporate tax departments. The surveys were conducted prior to the pandemic, at the beginning of the pandemic, and in Q4 2020.
Here is what we found.
More Work, Less Staff to Do It
The majority agree that Covid-19 has significantly increased workloads, while decreasing team size. This narrative was consistent among all industries, with nearly one-third of respondents stating they have reduced staff since the start of the pandemic. However, there is a light at the end of the tunnel, with nearly a quarter of respondents indicating that they plan on hiring in January 2021. These numbers are similar to pre-pandemic survey findings, indicating the hope for a quick post-Covid-19 recovery.
76% of respondents said their workload has increased because of Covid-19.
Dive Deeper Into Covid-19’s Impact on Tax Departments
Explore more survey results from before and during the pandemic.
In 2020, business initiatives have shifted to reflect Covid-19 realities. Not surprisingly, cash management was the top-rated business initiative, followed by workforce changes. Despite staff reductions, technology investments remain high, suggesting the use of technology to keep pace with increased workload demands.
This was particularly true in the areas of planning, with the majority of businesses (91%) saying they are using tax planning to achieve cash management goals.
77% continue to invest in automation technology.
61% continue to invest in tax software/ERP integration.
Covid-19 Spurs Remote Working Now and Into the Future
As expected, remote working has skyrocketed during the pandemic. However, it was surprising to discover that 91% of those surveyed expect remote working to become a norm for tax departments.
The Tax Department Remote Worker Timeline
Remote working comes with notable challenges. Collaboration and coordination of activity ranked as the most challenging aspects of remote working. Again, tax departments are turning to technology to address remote working setbacks. The use of cloud- and web-based tax software was consistently cited as a key strategy to combat collaboration and coordination challenges.
With more staff working at home, keeping team members engaged and motivated has also been pushed to the top of the priority list. Some of the ways tax departments are keeping staff motivated include:
Maintaining regular, honest communication with their team
Offering flexible work hours
Keeping their team up to date on staffing, company financial health, and return-to-work safety plans
Continuing to recognize and highlight employees’ exceptional efforts
Tax Law Clarity Key to Future Success
With a litany of tax law changes ushered in by the CARES Act of 2020, the majority of tax departments (63%) are clamoring for the simplification and clarity of U.S. and international tax laws and regulations.
Until that happens, many companies are turning to tax research and news software to stay up to date on Covid-19 regulations. They are also looking to tax workflow and task management software to model changes due to the CARES Act.
Covid-19 survival strategies and tactics implemented today will ensure that corporate tax teams are able to weather any storm, even a once-in-a-lifetime pandemic.