Indirect Tax Compliance: Process Automation or Process Transformation?
Aleksandra Bal discusses the importance of processes in indirect tax compliance and considers how taxpayers can use technology to improve their functions.
Read Time 10 Mins
Do you want to automate your current process – or transform it? How would you like to do both? Whatever your goals, there are tools that can help.
It’s something of a truism these days to say that the success of any technology initiative largely depends on paying careful attention to the processes that it automates. Yet, that’s an especially important principle to keep in mind in today’s world of artificial intelligence (AI) and advanced automation, where the technologies can directly shape the processes themselves.
As my colleague Michelle Engro mentions in her post, I recently looked at two technologies that can improve sales tax operations in a Tax Notes International article.
You’ve likely heard about robotic process automation (RPA), a technology that automates repetitive, labor-intensive business processes by transferring data among disparate software systems in ways that could previously only be performed by humans. As I wrote in the article, “RPA is like an employee who can work effectively 24/7 while maintaining a high level of accuracy in repetitive tasks.” It’s a superb tool for ensuring consistency in tax compliance operations.
Perhaps less well known is process mining, a technology that analyzes event data – the actual behavior recorded in audit logs – to give companies a better understanding of their processes as well as insights into ways to improve them. In the article, I discuss three types of process mining activities:
I see these tools as complementary to each other – you can leverage process mining to transform your indirect tax processes, and RPA to accelerate them. It’s no wonder these technologies are of growing interest to tax managers.
Please remember that the Tax Matters provides information for educational purposes, not specific tax or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information.
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