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Should Taxes Be a Factor in Strategic Decision-Making?

Business leadership should be factoring in taxes as they make strategic decisions for their organization, according to a new survey by CFO Research. A majority of the senior finance executives participating in the survey said their business would benefit substantially by thinking about tax

Strategyconsiderations in advance of making big business decisions. An improved tax function could help companies lower effective tax rates and generate higher earnings per share, ensure greater accuracy in financial reporting, and speed up the consolidation and closing process. Clearly, creating a strong relationship with the tax function can help yield valuable benefits and provide critical support services to the organization at large.

But as with any business task, it’s easier said than done. With aggressive tax enforcement policies and an increasing demand for tax functions to be more transparent, many groups are strapped for resources. Plus, they aren’t always getting the investment they need from their business – despite agreeing that tax functions are under-resourced, two-thirds of respondents said they have no plans to increase tax resources.

If companies aren’t in a position to hire additional people to support the tax function, perhaps leadership could consider investing in tax technology or automation software that can help manage the influx of tax-related data. This would help free up staff to focus on value-added activities and contribute to strategic business discussions.

We’d like to hear your thoughts on the tax function. How is it benefitting your business and helping you make better decisions? Are you making active investments in the tax function?

For more insights and resources on automating tax and HCM-related compliance functions, visit ADP’s website.


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