Recent developments in artificial intelligence are revolutionizing how tax professionals carry out tax work. Recent reports have shown that AI will lead to a productivity increase of $6.6 trillion through 2030 in all sectors. So, how are tax teams using AI today?
Robotic Process Automation Making Repetitive Tasks Easier
Performing the same task over and over again is tedious and time-consuming. Robotic Process Automation (RPA) can automate those repetitive actions. Tax professionals can program computers to use specific legacy applications or websites to run various tasks. RPA can mimic the tax professional’s actions – setting up filters, clicking buttons, and generating reports. This is becoming a popular way to process invoice payments, handle accounting and bank reconciliation, and deal with financial closeouts.
Extracting Essential Data from Documents with Machine Learning
Machine learning accelerates the analysis of tax documentation. By identifying senders, defining critical data, and inputting it into software systems, machine learning speeds up the process.
Machine learning software can now achieve
- the classification of documents to improve data collection accuracy;
- the definition of the document’s taxonomy; and
- the extraction of essential data from tax documents.
This software can also recognize different documents, replacing human data processing with machine-generated answers.
Tax Report Scanning
For people who travel internationally during the assessment year, tax reporting can be a challenge. Tax reporting must reflect the region in which they are currently living and paying tax across different geographies. Collecting information from those other countries takes time and effort. AI can access international tax information and search tax documents more quickly. This simplifies and speeds the process of tax reporting exponentially.
Improving Accuracy of Tax Forecasting with AI
AI elevates tax forecasting methods from simple modeling techniques to highly advanced predictive analytics. Algorithms can analyze seasonal and corporate data to spot trends in tax filing cycles. Organizations can use these to forecast tax burdens and sales more accurately.
Taxation and AI – The Way of the Future
AI may be a relatively recent development, but it is already revolutionizing taxation. Artificial intelligence and robotics will reduce the burden on employees and improve accuracy in tax reporting. By speeding up the time-consuming procedures involved in the taxation system, the sector will benefit overall. As the tax return preparation process becomes more efficient due to Artificial Intelligence, tax professionals can focus more on providing consultative and advisory services to clients.
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