How to choose a third-party tax technology consultant

← Blog home

Are you on the brink of a digital transformation in your tax department, but feeling overwhelmed by the challenges ahead? What if you had an industry expert by your side, guiding you through the process? Their expertise could transform your vulnerable tax team into a reliable, sustainable, and competitive powerhouse.

According to our recent 2025 Corporate Tax Technology Report, 74% of organizations with revenues over $1 billion are engaging third parties for technology purchasing and implementation. This trend highlights the need for corporate tax professionals to develop strong collaboration and vendor management skills.

The financial investment in third-party consultants requires justifying costs through improved outcomes, emphasizing the shift towards external collaboration for more efficient tax operations. As tech budgets increase in the next 3-5 years, implementing new technology will become even more critical. This process is like assembling a complex puzzle, requiring careful planning, attention to detail, and a clear vision. This is where consultants shine, ensuring your tax technology integration is both seamless and compliant.

Jump to ↓

Identifying common corporate tax challenges

Before integrating a third-party consultant into your tax processes, it is crucial to identify your department’s specific issues. Common corporate tax challenges include:

1. Complexity of tax regulations: Navigating the ever-changing landscape of tax laws and regulations can be overwhelming. Staying compliant while optimizing tax positions is a significant challenge for many organizations.
2. Resource constraints: Many tax departments operate with limited resources, both in terms of personnel and technology. This can lead to inefficiencies and a higher risk of errors.
3. Data management issues: Managing vast amounts of financial data across various jurisdictions can be cumbersome. Ensuring data accuracy and accessibility is essential for effective tax management.
4. Risk management: Identifying and mitigating tax-related risks is crucial. Without proper processes in place, companies might face financial penalties or reputational damage.
5. Technology gaps: Outdated or insufficient technology can hinder the ability to streamline tax processes and generate timely insights.
6. E-invoicing: The shift towards mandatory e-invoicing in many jurisdictions requires businesses to adapt their invoicing processes. This can involve significant changes to existing systems and workflows to ensure compliance and efficiency.
7. ERP cloud migration: Transitioning to cloud-based ERP systems can present challenges in data integration, system compatibility, and staff training. Ensuring a smooth migration is essential to maintaining accurate and efficient tax operations.

Other tax operation challenges can include managing cross-border transactions, handling transfer pricing complexities, and adapting to digital tax initiatives. Each of these areas requires careful attention to ensure compliance and optimize tax outcomes.

Ideal tax department outcomes with technology integration

Partnering with a third-party consultant who brings cutting-edge technology can transform your corporate tax department and lead to operational improvements. Set your sights on achieving these key outcomes:

• Enhanced compliance and accuracy: Leverage advanced software solutions to automate tax compliance tasks, ensuring accuracy and reducing the risk of human error.
• Improved efficiency and productivity: Consolidate processes through technology, allowing your team to focus on strategic activities rather than manual data entry and repetitive tasks.
• Better data management: Implement robust data management systems that facilitate easy access to accurate and real-time financial information across all jurisdictions.
• Risk mitigation: Use predictive analytics and other advanced tools to identify potential risks early and develop strategies to mitigate them effectively.
• Scalability and flexibility: Adopt scalable solutions that can grow with your organization and adapt to new regulations and business needs.
• Cost savings: By optimizing tax processes and reducing manual workload, your department can achieve significant cost savings in the long run.

Key considerations for selecting a third-party consultant

When hiring a new employee, you usually take the time to ask insightful questions and assess their fit for your business. The same approach should be applied when selecting a third-party consultant. There are four key areas to consider:

1. Define your company objectives: Communicate your objectives to find consultants who specialize in your organization’s needs. Defined goals, such as reducing manual workload, enhancing data analytics, or improving compliance reporting, ensure the consultant’s expertise aligns with your expectations.
2. Evaluate expertise and experience: Assess their technical skills, industry experience, and past project successes to ensure they can address your organization’s challenges. If automating tax return preparation is a goal, find consultants with successful experience in implementing robotic process automation (RPA) in similar situations. They should be capable of demonstrating how RPA can reduce errors and improve efficiency, offering clear benefits to your tax operations.
3. Ask for client references: Validation of expertise provides confidence that the consultant can deliver effective solutions tailored to your industry’s demands. An experienced consultant will have case studies or references from past clients, showcasing their ability to handle complex tax issues.
4. Assess business compatibility: Cultural compatibility is crucial for a project’s success. A consultant who aligns with your company’s values and culture enhances collaboration and innovation. For example, if transparency and open communication are important, seek consultants who emphasize regular updates and feedback, fostering effective teamwork towards common goals.

How to build a successful partnership with your tax technology consultant

Effective communication is the backbone of any successful project. Start by defining clear points of contact and setting regular meeting frequencies. Decide on the best format for discussing important changes to avoid any miscommunication. Leverage project management tools like Trello or Asana to track progress and share real-time updates. These steps ensure that both your team and the consultant remain informed about ongoing projects and pending tasks.

Set realistic partnership expectations and milestones early on to keep the project moving forward. Next, break the project into phases: planning, development, testing, and deployment. Set specific milestones for each step of the project. This strategy provides essential benchmarks for evaluating the consultant’s time management and performance. This approach helps maintain project schedules while keeping your business objectives front and center.

Perform due diligence and secure compliance

When building a successful partnership with a third-party technology consultant, conduct thorough due diligence. This involves vetting the consultant’s qualifications, checking their compliance with industry standards, and assessing their market reputation. This step helps mitigate risks associated with data breaches or non-compliance. A thorough evaluation process ensures that you select a reliable and competent consultant.

Next, establish clear data security protocols. Data security is paramount when handling sensitive financial information. Establish clear protocols and ensure the consultant adheres to them, using tools like encryption and secure access controls. Verify that the consultant has a robust data management policy and complies with regulations such as General Data Protection Regulation (GDPR) or California Consumer Privacy Act (CCPA). This proactive approach safeguards your organization’s information and ensures legal compliance.

Strategic partnerships for tax transformation

By following these insightful guidelines, your tax department can evolve into a stable, adaptable, and highly regarded force, ready to confidently maneuver the developments of modern tax operations. With this foundation in place and a clear understanding of the value of vetting your third-party tax technology consultants to leverage their expertise, you are well-prepared to embark on the next phase.

Discover how corporate tax departments are utilizing advanced technology and third-party consultants for a competitive edge. Dive into our 2025 Corporate Tax Department Technology Report for key insights.