Computer use in corporate tax departments.

• Author: Wells, Robert J.

Computer Use in Corporate Tax Departments

OVERVIEW

Against a background of constantly changing and increasingly complex tax reporting requirements, the tax departments of the largest U.S. corporations have become heavily automated, a trend that is likely to continue well into the 1990s. The extent of computer use, the breadth of applications, and the level of satisfaction with respect to productivity and quality of output confirm a highly successful process of computer integration into corporate tax work over the last decade.

More than 400 respondents to a survey conducted by KPMG Peat Marwick of Fortune 1000 companies confirm that computers are used by most tax departments of major corporations. Sixty percent of those companies surveyed have computerized more than half of their tax department's functions, and approximately one-third have computerized more than 70 percent of the department's work. Nearly all respondents (95 percent) use microcomputers, one-third use only microcomputers, and more than half (53 percent) use both micro- and mainframe computers. The trend toward increasing reliance on microcomputers is continuing and over the next 12 to 24 months, four in ten respondents will increase the number of microcomputers they use.

Respondents expressed strong agreement on the benefits of such broad scale computer use. The vast majority of respondents (94 percent) reported that their departments are realizing and even exceeding anticipated gains in productivity, and 97 percent say they met or exceeded anticipated gains in quality.

This study underscores just how successful and widespread the integration of computers into tax work has been. The principle reasons cited for purchasing computers are anticipated improvements in productivity (87 percent), meeting an increasing volume of work (82 percent), improving accuracy 79 percent), and keeping pace with the complexity of changing tax laws (56 percent). It is clear from the survey results that these goals are being met.

That two-thirds of the respondents have achieved ratios of one or two tax professionals per microcomputer attests both to the magnitude of productivity gains and the willingness of corporations to continue to invest in hardware as a result of initial successes. The extent of computerization is also impressive. One-third of the survey group has already computerized 70 percent of tax department functions, a greater proportion than had been expected. It is worth noting that...