Latest news and insight financial professionals in the corporate world must be aware of to stay abreast of the constantly changing sector.
AI is advancing to finance and tax departments close to you 59% of businesses that have annual revenue of more than one billion dollar use “using emerging AI technology” in these areas according to an recently conducted study of 500 executives in the C-suite by KPMG. Other companies aren’t too as far off: 29% said that they “have plans to in the next 12 months,” and the remaining said to KPMG “we are interested in doing so.” Zero executives indicated they were not keen on engaging with the latest AI technology, as per the survey.
Companies are placing the money in their pockets as well: Of the executives who were surveyed, 70% stated that they would put more than one million into AI this year. 40% are planning to spend more than 10 million.
What exactly companies are doing in AI initiatives isn’t covered in the study, and efforts to implement AI technologies may be a wide range and range from teaching employees how to utilize Excel in different ways as well as adding new cloud tools and personnel and installing new software.
Disclosure can lead to. KPMG found that “increased pressure from regulators and other stakeholders to make more transparent the ways that companies fulfill their obligations to pay taxes. In the end, the report concludes “The intersection of tax and ESG has risen to the top of the C-suite agenda.”
However, while the majority of companies want to publish their information their tax contributions, many are not equipped to make that disclosure according to KPMG. “Almost all (95%) indicate a willingness to disclose their total tax contributions publicly, but 85% also admit they are unprepared to do so,” the report states.
The majority of respondents stated that the reason why their company isn’t yet ready to make this type of disclosure is the difficulty of gathering the required details across a vast array of states and a third of respondents say that they “don’t have the technology capabilities” to accomplish this and over one quarter of respondents claim they “don’t have the talent to make sense of the data.” Only 10% say they’re willing to reveal tax contributions.
Talent gap. The tax departments feel the squeeze hard. Chief tax officers and CFOs are looking at talent different this time around, as well as are looking to outside their companies for help filling the gaps, as per the survey. If asked if they’ve gotten “more willing to outsource or co-source your tax function” in the last year 94% of those who responded agreed, a substantial increase over 43% in the previous year and 66% in 2021.
The companies have implemented various strategies to address this gap in the last three years, with anywhere from 36%-55 percent of executives saying that they’re experimenting with a variety of methods, from changing perceptions of tax careers, to retraining current employees, to hiring data scientists.
They’re also developing the tax talent pipeline, with similar proportions taking one of three approaches: changing educational prerequisites, recruiting from “nontraditional” colleges and universities, and “setting goals around outreach to BIPOC/underrepresented minorities.”