State of finance

How global tax and finance teams are using automation to transform challenges into opportunities

We’ll cover:


Who we talked to


What we learned


How companies are coping


Where finance teams spend time


Why adopting automation is key

Economic disruption is impacting companies worldwide. We asked finance and tax teams about the challenges they’re facing and how technology is helping them be more efficient and compliant.


Who we talked to

Nearly 400 managers, directors, vice presidents, and C-suite executives at companies based in Canada, Denmark, Finland, Iceland, Norway, Sweden, the United Kingdom, and the United States responded to the survey. They represent more than 30 industries, including retail, manufacturing, software, financial services, telecommunications, food and beverage, and oil and gas.

percentage of surveyed professionals in job roles: manager 38%, director 33%, VP 22%, C-suite executive 7%
Chart showing the percentage of survey respondents by country: US 38%, UK 26%, Northern European countries 24%, Canada 12%
Chart showing the percentage of survey respondents by company size in terms of employee count.

What we learned

69% of companies

surveyed are investing in more solutions to close efficiency gaps directly related to tax management.



How companies are coping

External factors are putting pressure on accounting, finance, and tax professionals to increase efficiency. The study found 45% of global businesses surveyed say inflation, recession concerns, and economic disruption had a major or moderate effect on their teams during the 12 months prior to the 2023 survey.

And it’s not over. A separate study by Avalara and Reuters Events found that 62% of European businesses and 52% of North American businesses surveyed expect effects of the recession to worsen, while 55% of European companies and 54% of North American organizations cite inflation as a growing problem.

Chart showing the effect of economic disruptions on survey respondents.Minor 42%, Moderate 36%, Major 95, No effect 12%

According to respondents of the Hanover Research study, while the worst of the COVID-19 pandemic may be behind us, it remains a significant disruptor for North American businesses (79%) and enterprises (68%). European companies (43%) and small and medium-sized businesses (52%) were less likely to say their teams have been majorly or moderately impacted by the ongoing pandemic.

Supply chain disruptions also continue to take a toll, with half of European businesses and 39% of companies in the U.S. and Canada reporting their accounting, finance, and tax teams have been majorly or moderately impacted.

Chart showing the impact of the pandemic on survey respondents. Minor 28%, Moderate 30%, Major 31%, No effect 11%

Supply chain disruptions

44% of companies surveyed in North America and Europe have been moderately or majorly impacted by supply chain disruptions.


Technology is helping companies respond to external pressures and increase efficiency

The study found 75% of organizations surveyed are investing in new technology and 50% are increasing their use of automation in response to these and other external factors. Only 26% of companies indicated they are executing tasks with fewer people in reaction to external factors and many have prioritized hiring in the coming year, which suggests automation is not threatening jobs.

An IDC report reinforces these findings, “The fact that these [significant macroeconomic] events have occurred rapidly and collectively makes the need for financial organizational transformation more important than ever. This transformation is happening everywhere in business but perhaps the biggest impact can be seen in how the role of the CFO continues to evolve.”

Similar results can be seen among companies taking actions to become more efficient. Hanover Research found 71% of companies are investing in more tools and solutions. About half are automating and optimizing processes, offering skills training, and increasing collaboration across tax and finance departments and teams.

Finance and tax teams are also relying more heavily on technology to close efficiency gaps related to tax management specifically. To achieve this, 69% of teams surveyed are investing in more technology and 45% are automating and optimizing processes. Departments are also increasing collaboration, conducting skills training, increasing their use of internal data, and outsourcing work.

Businesses aren’t waiting idly

More than two-thirds of tax and finance teams surveyed are investing in technology to close efficiency gaps.



Where finance teams spend time

Given the need to remain nimble in the face of economic uncertainty, many organizations are focused on planning for the future. When asked to identify their main priorities over the next 12 months, companies surveyed most frequently cited a need to improve budgeting and forecasting. Two-thirds of small and medium-sized businesses and half of enterprises say this is a top priority.

Forty-two percent of finance and tax teams surveyed have made risk management a top priority. Tax compliance can play a significant role in reducing risk. However, the study found European companies (14%) are substantially less likely to prioritize transactional tax management and compliance than North American businesses (41%). In addition, only 18% of businesses say regulatory readiness is a main priority, suggesting that accounting, finance, and tax professionals may be overlooking a critical compliance area.

Chart showing the top ten priorities for tax and finance teams based on survey responses.

Finance and tax teams are spending considerable time on priority tasks

Thirty-one percent of organizations surveyed struggle with how much time they spend on budgeting and forecasting. Twenty-nine percent of finance and tax teams in the U.S. and Canada described tax management as time-consuming, ranking it third among the areas where they devote the most time. 

Some notable differences were found between the tasks that companies in the U.S. and Canada are likely to find the most time-consuming compared to those in Europe. For instance, 38% of North American businesses find financial planning and analysis time-consuming compared to 21% of European organizations.

Chart showing the top five areas where finance and tax teams say they spend the most time.

Why adopting automation is key

Businesses were asked to evaluate how efficiently their finance and tax teams handle a variety of responsibilities. Companies were most likely to report they’re efficient at activities they’ve automated.

Producing financial statements topped the list, with 87% of North American companies and 61% of European businesses believing they are very or extremely efficient. Companies also feel they are particularly efficient at managing payroll (69%) and managing accounts payable and accounts receivable processes (68%).

Research also shows there’s room for improvement. This is especially true for some aspects of tax compliance. Many businesses are still relying on manual processes despite increased risk of errors and potential audit costs. 

Although businesses feel confident about their ability to manage receivables and payables, only 7% of organizations surveyed have fully automated their processes. A separate study by Avalara from 2023 shows that while 63% of global companies surveyed have made e-invoicing and real-time reporting a top priority, only 10% of businesses have a truly global e-invoicing solution in place. The survey included 100 responses from primarily senior finance and tax professionals in Europe and North America. 

As more countries make e-invoicing mandatory and real-time tax reporting becomes the norm, digitizing accounts payable and accounts receivable processes will be vital to maximizing efficiency and staying compliant.

The Hanover study found that more than half (53%) of companies surveyed still handle exemption certificates manually or mostly manually. Just 3% of accounting, finance, and tax professionals have fully automated their process. This could explain why companies were least likely to describe themselves as efficient at managing exemption certificates, which is especially true for teams in North America — just 37% surveyed believe they are very or extremely efficient.

Only 3% of companies have completely automated researching and calculating tax rates by jurisdiction, while 36% are still relying on all manual or mostly manual processes. In addition, 46% of organizations rely on all manual or mostly manual processes to prepare and file sales and use tax returns, while just 4% of departments have fully automated these activities.

Many businesses still manage tax manually

Global finance and tax teams recognize a need to automate

While 59% of businesses surveyed rely on all manual or mostly manual processes for managing audits, 31% are initiating automation. North American businesses are more likely to initiate automation for essential functions, including tax compliance, than those in Europe. 

Thirty percent of businesses in North America and 26% of businesses in European countries are initiating automation for preparing and filing sales and use tax returns. Many North American businesses are also initiating automation for researching and calculating tax rates by jurisdiction (34%) and managing exemption certificates (32%). Other areas where accounting, finance, and tax professionals are initiating their use of automation include budgeting and forecasting and implementing financial controls. 

Increased use of automation can help finance and tax teams be more efficient and reduce compliance risk.

Chart showing the top tasks that survey respondents say their global finance and tax teams are automating.

Who’s doing it right


How we can help

Finance and tax departments can save time, improve accuracy, and reduce costs when they automate tax compliance. Avalara provides end-to-end tax compliance solutions that help global businesses of all sizes be more efficient. With more than 1,200 signed partner integrations, our cloud-based solutions seamlessly connect with your accounting, CRM, POS, and shopping cart systems.

Automate tax compliance with Avalara

Get your copy of the State of finance report

More details and data from the survey, including respondent demographics, can be found in the full State of finance report.

View report

Tax rates, rules, and regulations change frequently. Although we hope you’ll find this information helpful, this report is for informational purposes only and does not provide legal or tax advice.

Connect with Avalara

Find out how we can help your business improve tax compliance and reduce risk.

Connect with Avalara

Find out how we can help your business improve tax compliance and reduce risk.