insight magazine

Corporate Minded | Winter 2018

4 Tips for Translating Tax Jargon Into Business Success

The art of communicating technical topics to your corporate colleagues takes practice and tact.
Amanda L. Gavin, CPA, MBA Manager, Global Tax & Trade, Caterpillar Inc.

Have you ever been in a meeting where a technically savvy accounting or finance pro throws around technical jargon as easily as promises on a campaign trail? That person is likely respected in their field, but unfortunately, the intended audience has probably either tuned out or been left out. Time and again I’ve seen enthusiastic business professionals — both in accounting and finance and other organizational areas — who are eager to learn and grow and dive into analysis and discussion become discouraged and frustrated because they’re unable to follow the conversation.

It’s incredibly important for us accounting and finance professionals to speak in understandable business terms, especially in a post-Tax Cuts and Jobs Act climate where tax is a hot topic in all aspects of the corporate world. So, here are some tips for communicating technical topics I have learned along the way (and sometimes the hard way).

Tip #1 – Cash Is King

When it comes to talking shop, cash is king! During my days in public accounting, we would often start a conversation with our clients in terms of cash impact. Ultimately, that is why they agreed to the meeting and why they are in business. So, if you are talking about the impact of the new revenue recognition standards or depreciation methods, for instance, be sure to understand how each decision will impact cash flow and know ahead of time how to illustrate it to your audience.

Tip #2 – Avoid Technical Jargon

We’ve all been in classrooms, conferences, and meetings where everyone’s eyes have glazed over and nothing useful has been absorbed by anyone. Don’t let this happen to you. It’s incredibly important to translate technical jargon, especially from the tax world, into everyday language your peers will understand. Decision makers particularly need to be able to follow the issues and proposed solutions you’re presenting.

A couple of years ago, I started working on compliance in the U.S. International Tax space at Caterpillar. At that time, I found myself focusing on the words and code sections so closely that I couldn’t participate in the discussion as effectively as I would have liked. I often liken that experience to being dropped off in a foreign country where I can’t speak the language.

When advising on the tax consequences of certain business transactions, I find it most effective to drop all references to code sections and stick to terms everyone can follow. For instance, if you’re trying to explain the new provision for the limitation on interest deduction, don’t start out by saying, “The IRS and Treasury released Notice 2018-28 announcing their intent to issue proposed regulations under Section 163(j) as amended by the TCJA.” Instead, simply inform your client that you are waiting on proposed regulations which might impact what they can deduct on their tax return. Give them an example: “For instance, every $10,000 of expense over the limit could increase your liability by more than $2,000.”

Tip #3 – Talk About Risks

When you talk about the potential impact of a proposed change or strategy, be sure to discuss the potential risks and costs. State why the proposal makes sense for the business. For instance, if you’re on the tax side talking about how a cost segregation study would improve cash flow by accelerating depreciation deductions, the business side is going to want to know how that would impact the financial statements. It is very impactful, and it boosts your credibility, when you can articulate the risks and costs and do so before needing to be asked.

Tip #4 – Become a Trusted Advisor

Developing good relationships between tax, finance, and other business segments is critical for the enterprise’s success as well as your own. Being cordial and collaborative is only a fraction of the equation. Key to becoming a trusted advisor is being open, honest, and willing to have the difficult conversations.

I have known several great tax advisors who openly acknowledge when management or other stakeholders will not like the tax answer but then they simultaneously promise to work together to find the best outcome for the enterprise. This approach automatically pulls everyone into the conversation and encourages engagement in seeking solutions — it inspires trust and confidence.

To successfully translate tax jargon into business success, you need to know your audience, be able to talk about the enterprise impact, and learn to simplify your verbiage so you can spend more time on the analysis and less time translating the issue.

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