How Can Intelligent Automation Aid Tax Operations and Functions?

Midhun Menon P


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    Tax operations are expected to make better use of scarce resources to generate value and enhance business insights for better decision-making, all while cutting costs and meeting the demands of an ever-increasing compliance and reporting load. Tax departments are increasingly relying on technology, particularly intelligent automation, to help them do their jobs.

    We can look at how intelligent automation is becoming the industry standard and how it is assisting tax and tax function departments in providing more value and weathering the current upheaval. The question is no longer “if,” but “where,” “how,” and “when” it can be implemented.

    Before we get into how intelligent automation can help tax operations and functions, let’s take a look at the various types of automation that businesses are using these days.

    1. Routine Task Automation

      This category of systems (including robotic process automation tools), also known as “bots,” digitalize mundane, repetitive tasks and significantly increase productivity. The term “robotic process automation” (RPA) refers to a software “robot” that mimics human behavior when interacting with a computer. Following the completion of the necessary settings, the software robot may handle routine, rule-based tasks, freeing up tax experts for higher-value work. Three of the most promising areas for robotic process automation are data collection, data entry, and data reconciliation. However, these applications are only the tip of the iceberg in terms of what RPA can do.

    2. Automation of Advanced Processes

      This class of systems employs NLP and machine learning to handle complex transactions involving both structured and unstructured data.

    3. Intelligent Automation

      Because they mimic human abilities such as perception, evidence gathering, and decision-making, cognitive automation systems are the most talked-about and potentially useful type of AI. Rather than being classically coded, these systems are trained to work in specific knowledge domains, such as a set of tax laws. The strength of cognitive computing is its ability to process large datasets to conclude. We simply do not have the capacity in our brains to process and assimilate this much information.

    Intelligent Tax Automation 

    Intelligent automation is achieved by rethinking and improving processes, expanding the capacities of underlying data systems, and testing out new technological approaches. When we talk about intelligent automation in tax, we look at processes through an automation lens to see where human intervention can be reduced without sacrificing efficiency or output quality.

    There are numerous technologies available today that could facilitate intelligent automation and benefit the tax department. Some of the most popular ITA technologies now being deployed in the market as part of tax function transformation are robotic process automation (RPA), extract, transform, and load (ETL) tools, and data analytics tools.

    In this context, technology is critical in facilitating the delivery of process improvements and efficiencies, but it is far from the only factor. It is critical to begin discussions about ITA by focusing on its objectives: what are the organization’s basic requirements and needs? Once a plan of action has been determined, the focus can shift to the technologies that will carry it out.

    How RPA can help you save time?

    RPA can automate the majority of the steps in filing an indirect tax return. The tax robot is intended to access and combine data from a wide range of source applications (ERPs, consolidation systems, SharePoint sites, and so on) with other inputs (excel templates, emails, tax authorities’ websites, and so on) before generating the necessary tax reports for inspection by tax professionals. Another example is the time and effort expended by multinational corporations with complex group structures on tax provision and return-to-provision operations as part of the group tax reporting process. Robotic process automation (RPA) can be a lifesaver, assisting in the collection of data in the appropriate format from critical systems, followed by the execution of the prescribed checks and reconciliations and the identification of any discrepancies. There are safeguards in place to ensure the integrity of the collected detection of data in the appropriate format from critical systems, followed by the execution of the prescribed checks and reconciliations and the identification of any discrepancies. There are safeguards in place to ensure the integrity of the collected data. Now that tax return computation and other reports are handled automatically rather than manually, more time is available for inspection and study. It is especially important during critical reporting cycles to have an automated solution that can help reduce contractor reliance, increase process transparency, and tighten quality control.

    Data analytics is a critical tool for Intelligent Automation

    Several businesses struggle with even the most basic analytics reporting capabilities, even though many businesses are working to integrate more advanced analytics into their core operations. So, how can tax authorities leverage data analytics? Before delving into more advanced topics in data analytics, it’s best to get your foot in the door by mastering the fundamentals on your own. When tax professionals have mastered the fundamentals, they can progress to more complex analytics, allowing for more precise and up-to-date reporting. Improved data integration can help with data availability.

    A fresh start for Data Integration 

    Too much data in too many silos is a common problem for corporations, and it is frequently caused by the use of multiple enterprise resource planning (ERP)  systems. The amount of time tax professionals spend gathering, cleansing, and visualizing data grows in direct proportion to the number of ERPs in use. Most data collection, cleaning, and visualization tasks are still done manually, which means tax departments are missing out on the efficiency gains that automation provides. If there are different spreadsheets for each step, which indicates that there are multiple data source points, there is the potential for process standardization. The use of intelligent automation to facilitate data gathering and purification processes can improve resource availability in the tax function. Data integration automation can shorten reporting timelines and increase transparency for traceability.

    Education in Tax Technology 

    To adapt and change tax operations for the future, traditional tax and finance expertise, as well as data and technology expertise, is required. Intelligent tax automation is a top priority for businesses that offer both in-house and external tax technology training programs. Tax professionals can learn about intelligent automation technologies and, more importantly, consider and eventually apply them in their work to improve efficiency and risk management if they take advantage of the available resources.

    For more inquiries contact our experts today!



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