As the demand for quality entry-level finance and accounting talent remains high, the hopes of technology supplementing labor gaps caused by talent shortages, constrained budgets and growing data pools are becoming a greater challenge for CFOs and their teams to address.
In areas like tax, where experts have suggested CFOs and their teams should focus, new data from tax technology solutions provider Vertex indicates this function is leading the way in technology implementation within finance. More than three-quarters (77%) of the 600 respondents to the 2024 Global Tax Transformation report said they believe their tax teams are at the forefront of digital transformations.
Big talk, less action around automation
While 80% of respondents said digital transformations are key to business optimization, only half (50%) said they are making significant progress on the automation front. Barriers holding finance leaders back include IT support (34%), budget constraints (31%) and talent shortages (28%).
Trailing behind the tax function in automation progress are indirect tax processes (56%) and finance processes (52%). Thirty-nine percent of respondents highlighted internal efficiencies as the primary driver for tax and finance transformation efforts, but cost savings and data-leveraging benefits from successful technology implementations are also significant motivators. These efforts often involve taking risks such as major ERP transitions or adopting advanced analytics for data processing.
Collaboration and ROI
With CFOs taking on growing responsibilities in areas like cross-departmental collaboration and decision-making processes across their organizations, technology offers opportunities to alleviate some of the pressure. More than half of finance leaders said automation could help with these challenges, and 57% reported that automation has made it easier to collaborate with different teams within finance.
While the end goal of digital transformation varies across businesses, there is widespread agreement on the importance of keeping systems accurate during the transformation process. More than three-quarters (79%) of respondents said ensuring systems remain up to date with current tax rates and rule changes is the most critical task during any type of technology implementation.
ROI in technology, historically an area of pressure for CFOs to demonstrate, is being forecasted positively by survey participants. Nearly half (49%) said they expect to achieve ROI in their technology investments by improving forecasting and decision-making, building a more cost-effective and future-proof technology architecture and reducing or redeploying staff in finance and tax teams through process automation.
