Insights from the 2024 EY Tax and Finance Operations Survey

In the 2024 EY Tax and Finance Operations (TFO) survey of 1,600 professionals, 87% say they believe GenAI will make finance functions more efficient.^[1]

That’s a massive shift in sentiment from just one year ago, mentioned in the same report, when only 15% saw any tangible impact from 

GenAI. What has changed? Single line answer. Breakthroughs in GenAI technology.

In this blog post, we’ll look at how GenAI is reshaping the tax and finance landscape by solving (or at least alleviating) three intensifying challenges:

1. Cost pressures
2. Talent shortages
3. Growing legislative and regulatory reporting requirements

We’ll also explore how leading companies are exploring GenAI use cases in their operating models.

GenAI-as-a-US$3.4T catalyst for transformation

According to EY, GenAI could add up to US$3.4T to the global economy over the next decade. This will impact more than half of the world’s workforce.^[2]

But the interesting thing is that we are not hearing talks of “a transformation” for the first time. Remember Machine Learning, RPAs, and other similar technologies that made their big break in finance operations?

It’s that kind of “aha moment” that GenAI has created for many ICs, managers, and executives alike, which might hold the potential to solve the talent and budget crunch. But security concerns persist.

Three-quarters of surveyed professionals say their functions are either “not using” or only “exploring” GenAI. Many intend to progress quickly to a point where GenAI is fully integrated into processes and decision-making. 

This push will likely require significant changes to data strategy, talent management, and operating models.

3.3% budget cuts expected for Tax & Finance Function in next 2 years

Budget cuts followed by high inflation and thus shrinking purchasing power of Finance teams have forced CFOs to explore co-sourcing as a solution. Just to put things in perspective, survey respondents in the report expect a 3.3% budget reduction over the next two years, with 13% anticipating freezes.

Five key finance activities are being co-sourced or considered for co-sourcing: 

1. Financial Planning and Analysis (39% current, 58% considering), 
2. Statutory reporting (63% current, 33% considering),
3. Transaction accounting (53% current, 41% considering), 
4. Controllership (21% current, 40% considering), and 
5. Payroll operations (16% current, 34% considering).

Even as budgets shrink, GenAI has entered the debate as both a solution and a new area requiring investment.

And when there’s an appetite for the introduction of a new solution in any big organization, “build vs. buy” debates emerge. But in the case of GenAI tools and capabilities, building these capabilities takes time. 

EY suggests, “buying some or all of the needed tools and services may provide a quicker transformation and better value”.

340,000 Accounting Jobs Unfilled Across United States

According to AICPA data, 75% of US CPAs became eligible for retirement in 2019. 2024 estimates from Fortune magazine show a shortage of 340,000 accountants and auditors in the US.^[3][4]

This is a crisis of epic proportions. Let us explain how:

• 53% say retaining and attracting talent is an “extensive” or “significant” struggle.
• 89% say talent-related barriers — from budget constraints to difficulty hiring critical skills — hold their functions back.
• 70% say fewer accountants entering the profession will be a “moderate” or “significant” disadvantage in the next five years.

Demographics are driving much of this challenge. 

In the US, three-quarters of CPAs reached retirement age in 2019, and the pipeline for new accountants is shrinking. Meanwhile, a parallel trend is the rising need for data scientists, tech specialists, and GenAI-savvy professionals. Organizations are beginning to shift from a “degree-first” mentality to a skills-focused approach:

• 62% say tax and finance employees without a university degree are “very” or “moderately” important to their talent strategy.
• 77% say hiring data scientists is “very” or “moderately” important.

“Tax functions need to shape their future talent model to ensure they have the right people with the right skills, including the ability to work with GenAI.” — Dave Helmer, EY Global Tax and Finance Operate Leader

Meanwhile, a significant majority of respondents expect their overall headcount to stay the same or grow, even as GenAI takes on some routine tasks. Why? Because leaders see GenAI not just as a cost-cutting machine, but as a tool that can empower professionals to focus on higher-value, strategic work that can’t easily be automated.

Emerging compliance obligations keep piling up

The global tax and finance environment grows more complex each year. Three areas that stand out:

1. Real-time filings and e-invoicing
   • More than 80 jurisdictions have implemented some form of real-time digital filings.
   • E-invoicing started in Latin America but is fast expanding into Europe and Asia-Pacific.
   • Many companies are finding the old “local solutions” model unsustainable.
2. Global minimum taxes (Pillar Two)
   • 83% of respondents say they have to make “moderate” or “significant” adjustments to source data to comply with BEPS 2.0 rules.
   • As of September 2024, 39 jurisdictions have enacted final legislation, while others are in draft stages.
   • Large multinationals must calculate potential top-up taxes where effective tax rates fall below 15%.
3. Public country-by-country reporting (CbCR)
   • Already mandated by several jurisdictions, with many others poised to follow.
   • Some 56% of respondents anticipate voluntarily disclosing details about their global tax footprint in anticipation of new regulations.

Unsurprisingly, all this additional reporting is straining tax and finance resources — precisely at a time when they’re wrestling with tighter budgets. GenAI can help by automating data extraction, classification, and analysis in near-real time. Yet integrating GenAI requires a robust data strategy and a plan for data governance and privacy.

Finance function transformation is mirroring tax

Tax professionals aren’t alone. Finance leaders are dealing with their own complexity in planning, forecasting, and reporting. More than half (54%) of finance professionals say they are also considering changing their operating models in the next two years — often as part of a combined tax and finance transformation.

Four actions to consider now

1. Operationalize GenAI for tax and finance

Move beyond pilot projects to fully integrate GenAI in day-to-day operations. Identify use cases where GenAI can provide the most value (e.g., classifying tax transactions, accelerating data analysis, or providing real-time e-invoicing insights). Train your teams to be comfortable in “prompt engineering” and chat-based AI tools.

2. Create a comprehensive data strategy

Reliable, high-quality, and secure data is the foundation for all GenAI solutions. With the rapid expansion of reporting requirements, aligning your data strategy to regulatory and strategic needs is more critical than ever.

3. Develop a strategic talent plan

Forecast the mix of traditional tax and finance professionals, data scientists, and GenAI specialists you’ll need — and plan how to acquire them (through hiring, co-sourcing, or automation). Recognize that new, tech-focused skills are at least as important as formal credentials.

4. Re-examine operating models

A “build vs. buy” choice applies not just to AI platforms but also to compliance processes, new legislative demands (e.g., Pillar Two), and other tax and finance operations. Many companies opt for a hybrid approach, consolidating with one primary provider for co-sourced services to free internal teams for higher-value work.

The bottom line

GenAI arrived just in time to help finance leaders respond to intensifying budget, talent, and compliance pressures. But capitalizing on it requires strategic vision and thoughtful execution. 

Organizations that act quickly to develop a mature GenAI strategy, address chronic talent shortages, and choose the optimal operating model will be best positioned to thrive amid the ever-evolving demands of real-time tax administration.

The 2024 EY TFO survey shows that the time for incremental changes has passed. The future belongs to the truly transformed tax and finance function, where GenAI acts as a powerful multiplier for people, processes, and technology. 

The organizations that get it right will set a new standard for efficiency, agility, and strategic value in tax and finance.