Whether you’re leading a Fortune 500 company or a family business, you’ve probably seen peers and competitors moving to a tax managed services (TMS) model for their tax needs. Given the difficulties of staffing a skilled internal accounting team, plus expanding regulatory complexity, it’s no wonder many organizations are adopting this newer approach, where one outsourced provider handles the full gamut of your tax obligations, including software.
Yet despite its many advantages, TMS isn’t right for every business. Is your company better off sticking with an in-house tax strategy? This quiz can help you assess whether TMS is a good fit for your organization.
Do you already have a trusted staff tax team? Having knowledgeable, highly productive tax professionals you can depend on and who know your business gives you an edge over competitors who lack access to top tax expert insights.
Does your current tax technology minimize off-cycle spreadsheet processing, manual data entry and duplicative work? Besides taking extra time, having more manual data entry and updates creates more opportunities for errors.
Can you scale up staffing during tax season and scale down when things are slow? Year-round staffing to meet peak need for tax services often means you’re paying for unnecessary human capital during most of the fiscal year. However, competing for temporary tax workers typically leaves skill gaps that can hurt your business.
Do you have consistent tax forecasting and open communication that lets you see what’s coming? No one wants a tax surprise, and a tax team that’s constantly in flux can lead to poor communication, creating additional opportunities for mistakes and oversights. Outdated processes and obsolete technology can make it even harder to know where you stand.
Can you avoid high turnover and skill gaps in your tax team? Employee churn can leave you short-staffed or overly dependent on staff who lack crucial skills and experience. This puts your organization at higher risk of regulatory noncompliance, penalties and financial loss due to missed tax savings opportunities.
Do you consistently meet tax filing and mandatory reporting deadlines? In addition to the penalties and other negative consequences of missed deadlines, tardy tax returns and reporting could signify that your tax department lacks the critical human or knowledge capital it needs.
Do you have a failsafe succession plan if key staff leave? Employee turnover is a fact of life for every business. Could your tax team continue functioning successfully if the most highly skilled and experienced tax employee unexpectedly left?
Are you capturing all the tax credits, deductions and savings you’re qualified to claim? Evaluating all the credits and deductions you could potentially qualify for requires company- and industry-specific guidance. Are you eligible? Which path offers the most benefit? Mistakes here mean you could be leaving money on the table.
Does your tax strategy incorporate the newest tax legislation and respond to evolving regulatory conditions? A flexible, responsive tax strategy informed by expert insights and up-to-date knowledge is crucial to minimize your overall liability.
Do your current tax experts have the detailed understanding necessary to ensure compliance with constantly expanding regulatory pressures? Missing out on tax savings is a serious problem, but the potential consequences of failing to comply with new regulatory requirements could pose an existential threat for your organization.
If you answered “yes” to all 10 questions, congratulations! Your business is in good shape tax-wise and positioned well to carry on with your internal tax team.
Have one to four “no” answers? You’re still better off than most organizations, but you might want to explore TMS as an alternative to your current approach. It’s possible that you could find meaningful cost savings, process improvements and enhanced tax performance by replacing your in-house tax functions with TMS.
Did you respond “no” five or more times? Don’t feel bad; you’re among the majority of business leaders. Handling the increasingly complex and demanding burden of tax management internally isn’t always attainable — or practical for the organization when there’s an alternative that can potentially yield better results at a lower cost.
What happens when you wing it with taxes versus bringing on experienced experts and advanced technologies? Choose your path below and see where you land.
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Want to learn more about how TMS works and gain a better understanding of its potential benefits for your business (they go far beyond cost savings)? Get answers with our Tax Managed Services Guide, and reach out to our Tax Managed Services experts to talk about your tax challenges and how this flexible solution can boost business performance as your company grows.
Offload your tax burden. Contact our experts today to learn how we can transform your tax function while you focus on the strategies that grow your business.
