Beyond outsourcing: Closing the Finance, Tax, and Payroll alignment gap

Data remains fragmented across Finance, Tax, and Payroll/HR. Finance respondents were more likely than Tax respondents to identify tax-related data integration as a challenge. This can limit the ability to use tax and payroll data for reporting, forecasting, analytics, and decision-making. For business process models, the goal is often to collect data once and use it for multiple purposes, including tax, accounting, statutory reporting, workforce cost analysis, corporate secretarial obligations, and management insight. Without integration, organizations may face inefficiencies, manual workarounds, and increased risk.

The survey points to differences in how Finance and Tax perceive ownership of activities such as corporate income tax returns and payments, and statutory accounts preparation. Where ownership is unclear, organizations may face duplicated effort, manual workarounds, inconsistent controls, or tasks falling between teams. 

A connected operating model should clarify who performs each task, who owns the outcome, who controls the data, who approves exceptions, and who is accountable when issues arise.

Finance and Tax leaders recognize the benefits of outsourcing, including cost reduction, access to technology, and flexibility to scale. However, outsourcing is usually assessed beyond cost alone. The report highlights the importance of considering control, resilience, transformation capacity, service quality, regulatory coverage, and employee impact. This is particularly relevant for Payroll, where provider performance can affect compliance, continuity, data protection, issue resolution, and employee experience.

Finance and Tax leaders were aligned on the growing importance of AI skills. They also identified barriers to AI implementation, including uncertainty about accuracy and reliability, budget constraints, data security and privacy concerns, limited AI expertise, and lack of AI strategy. AI can support automation, anomaly detection, workflow routing, reconciliations, and insight generation. But it cannot compensate for poor data, weak controls, or unclear accountability. In Payroll, AI-enabled processes need particular care because they involve sensitive employee data and outcomes that affect individuals directly.

A key barrier to collaboration between Finance and Tax is misaligned ownership of technology, data, and investment decisions. The report highlights differences in how Finance and Tax view control of tax technology strategy and budget. Without clear decision rights, ERP, HRIS, payroll, tax, and finance system decisions may be optimized locally rather than for enterprise outcomes. Operating models need to define who sets strategy, funds change, owns data, approves process changes, manages providers, and remains accountable for outcomes.