IMGCAP(1)]As a business grows, tax issues become more complex and absolutely critical. Growing companies cannot get tied down and caught up by tax penalties that could have been avoided with simple due diligence.
While many businesses defer to an external tax solution provider, the cost of outsourcing the workload can definitely add up quickly. When a business’s tax situation increases in complexity, it often makes more sense, and is more cost effective, to invest in the greater in-house knowledge and expertise of an internal tax professional.
Three Reasons to Bring in an Internal Tax Professional
According to a recent survey measuring the hiring outlook, the main reason why companies added new internal tax positions was corporate growth. Corporate growth can complicate tax matters in many ways; from overseas expansions to complex projects that involve multiple entities, your business must remain in compliance with all tax codes. Often a company’s tax liability reaches across many states and possibly even several countries. This kind of growth means that your people need to be extremely knowledgeable about a plethora of tax topics. One tax error could lead to penalties that can unnecessarily cost your company major dollars.
Another reason to bring in a full-time internal tax professional is that your organization’s controller or CFO simply doesn’t have the time available to focus on tax issues. Let’s face it: controllers and CFOs have a very full plate. Between providing financial oversight for your organization and managing strategic direction, your controller or CFO is already stretched thin. Tax issues are often not a realm of expertise for your company’s finance team. Hiring an internal tax professional will relieve your finance team from a burden and ensure that tax matters are getting the dedicated attention they need.
If your business recently went public, or is in the process of doing so, it may be wise to consider hiring a full-time internal tax professional. The process of going public requires very complicated and stringent auditing. Oftentimes, the current finance team isn’t equipped for the high level of detailed knowledge required for such a task.
In addition to the audit, publicly traded companies are subject to higher scrutiny by regulatory agencies. With details like profitability and executive salaries subject to disclosure, it’s paramount that proper tax and accounting calculations match what is on the books. An internal tax professional is fully dedicated to compliance and can be a vital source of knowledge within the organization.
What Can Internal Tax Professionals Do?
While your controller or CFO handle big picture finance issues, your internal tax professional is completely dedicated to keeping your company on the right side of the tax code.
In addition to freeing up your finance team and alleviating the workload of your controller or CFO, the internal tax professional will be able to answer tax questions from your executive team. Because of the internal nature of their work, these tax pros are up to speed on your company’s strategies, goals and values.
Their in-house knowledge of your company’s projects will ensure continuity and a smooth ride when preparing taxes. Not only that, but as an internal employee their only client is their employer, so their time will not be split across several customers the way an outsourced firm needs to operate.
The financial benefits of an in-house professional also cannot be understated. An in-house tax person will likely reduce the need to turn to costly outside providers. Many issues that an internal tax professional discovers and troubleshoots could end up saving your company well beyond the cost of hiring him or her.
Selecting the Right Internal Tax Professional
The advantages of having an internal tax person are numerous, but it’s important to focus on selecting the right candidate. Tax laws and regulations are a constantly changing facet of business and it’s important that your organization be nimble enough to meet these changes head on.
Make sure that your hire has a mix of skills and expertise, and that you know what kind of tax law he or she specializes in. Your internal tax professional should have a broad yet comprehensive understanding of tax issues and how they relate to your particular industry.
Also, hiring an internal tax professional doesn’t mean that your company’s tax needs will be fulfilled in perpetuity. If your company sees a rapid upswing in business, the workload might be overwhelming for one internal tax person to handle all alone. It’s wise to consider using your internal tax professional to lead a temporary outsourced tax group when your business needs require more hands on deck.
Easing Workflow
At the end of the day, the purpose of hiring an internal tax professional is to ease the workflow in your company while also effectively tackling potentially high-cost tax issues. When budgeting for your next round of hires, stop and consider the utility of bringing an internal tax professional onto your team. The front-end investment could potentially save plenty of headaches down the road.
Julia Holian, director of consulting at
