Companies aim to cut costs of finance related tasks
Companies would like to slash their expenses related to tax and financial activities, EYʼs global survey involving 1,700 company heads says, with decision makers having to rethink finances due to digital developments, and the increasingly more intertwined international tax system.
According to the research, there is increasing pressure in the corporate sector to decrease costs. In the next two years, 94% of those surveyed would like to decrease the cost of tax and finance related activities by an average of 8.4%.
Meanwhile, dynamic changes in the regulatory environment will mean extra tasks in the future, according to the respondents. As a result, financial functions must achieve more while using less resources.
A large portion (84%) of companies have already started taking steps to eliminate shortcomings in their current model, EYʼs research found. Slightly more than one-third of companies decided for a full revamp or rebuild of their tax and financial tasks. This may require a new digital platform, people expert not only in finances but technology, as well as the establishment or expansion of a service center.
The full reorganization of tasks provides most control for companies, but this is also the most expensive solution. The situation is further worsened by the fact that nine out of ten responders claimed that they had great difficulties in finding the proper experts.
"Organizations recognized that, without changes, their financial directorate could not successfully tackle new challenges," says Botond Rencz, EYʼs country managing partner for Hungary. "The directors must decide whether they will go through with the constant transformations themselves, or relinquish a part of their control, assigning the task to an external party."
A quarter of decision makers believe in the latter method, the complete outsourcing of tax and financial tasks. In this case, the IT costs and risks appear at the supplierʼs side, but it also comes with significant structural refurbishments, as it requires a new leadership and control model.
A third option, supported by 24% of participating companies, is the combination of the first two. Companies are mostly looking for automatized or robotic solutions to given tasks, hence efficiency can be improved while costs are decreased.
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