Generally, we would be talking about how A.I and tax automation processes would help businesses develop an edge, but this time we will take into consideration the pandemic, and how everything has gone digital. This calls for a streamlined tax account, payment, and reporting process.
Tax compliance and reporting play a crucial role in the betterment of tax administrations, but businesses need to look beyond that. In this time of e-learning, work from home, and the fall of many businesses, companies should look into driving innovation beyond & tax functions beyond the basics. Instead, companies are looking for accounting outsourcing service providers.
Manual tax functions and outdated processes have not just an inadequate effect, but a detrimental one. Companies may not be ready for an audit, human errors can result in discrepancies, and that can further lead to delays in reporting. Where companies are looking for accounting outsourcing services, they could be looking within to streamline things.
So, how can technology help?
Let’s first understand the challenges being faced today…
- Lack of update on changing laws
- Shortage of resources
- High overtime incidences & low morale
- Poor data quality
- Outdated processes
- Inefficient work pattern
The above-stated problems are exacerbated because of the world wide lockdown. With almost every business jumping online, Governments have started to ask for almost real-time information from businesses. With transactions happening online, the inbound flow of data is heavy and managing that has become a challenge for employees. One way that companies are tackling this issue is by hiring onsite accounting and tax services. How else does real time data affect the companies?
The demand for real-time data has changed the manner of reporting, filling, collecting; which is something that the traditional manner of tax management can’t cope up with. Companies need to adopt digital mediums & frameworks, tax automation software and eliminate silos in their departments to tackle human errors and delays.
Repetitive tasks, day in – day out processes can be made faster, cheaper and more accurately. Replacing manual labour with robotic systems frees the professionals to add more value to the tax management process. The professionals can spend more time on eliminating silos, educating other departments on submission, and focus more on planning.
To summarize it better, the below are the benefits of automation & digitization in tax management
- Accurate calculations
- Lower TAT
- High data quality
- Streamlined efficiency
- No human errors
- Less stress & less overtime
- Readiness for tax assessments and submissions
Proactive or reactive?
Online businesses running on tight margins need to realize the lower cost & higher efficiency of digitization. Human resources need to be freed so that the subjective areas like analysis and risk management can get their due attention. Every company needs to now focus on being audit-ready. Digital tax management helps the companies become audit-ready – especially for electronic audit.
Businesses are going online and whether the company has an in-house accounting and tax planning team, or hires accounting outsourcing services, the companies need to be digitally sound.
Since automation will help early in the tax management lifecycle, human assets need to be put for accounting and planning, and since there’s an information overload, the human resources need to be experts in accounting and planning. Thereby, hiring would have to be very strategic and very well planned. Even the accounting outsourcing companies need to step up their game.
The question is, should the companies wait to react when audited by the Government, or be proactive and audit-ready? With companies going global, automation is the need of the hour, but even the human assets will have to step up.
Need experts to evaluate your tax management? Contact us at Finsmart.co.in
