2023 is expected to bring many new challenges to tax professionals, ranging from increased regulatory scrutiny to ever-changing tax laws and regulations. To stay ahead of the curve, tax professionals need to leverage the power of technology to overcome these challenges.
A recent article from Thomson Reuters, “Baker Tilly’s Michele Donohue Makes the case for Automation in Tax Practice,” discusses the benefits of automation in tax practice, as well as the role of artificial intelligence. In the article, Michele Donohue, a partner at accounting firm Baker Tilly, highlights why embracing automation and AI is crucial for tax practices to remain competitive and meet the evolving needs of their clients in an increasingly digital world.
Let’s take a look.
Benefits of automation in tax practice
Throughout the article, Donohue explains the need for technological advancements in tax practice and how those needs stem from modern challenges, such as increased regulatory complexity and the explosion of digital data. With these challenges come new opportunities for firms to streamline processes, reduce errors, and free up time for tax professionals to focus on higher-level tasks.
“From a tax professional standpoint, we’re always trying to shoehorn that data into some system … there’s always an input that’s required in a certain format,” said Donohue. “[There is] so much opportunity for automating natural processes.”
Some of these opportunities include:
- Increased efficiency and accuracy: Automation allows tax professionals to perform tasks more quickly and accurately than manual methods, reducing the risk of errors and saving time.
- Reduction in manual errors: Automation can help eliminate the risk of human error that can occur with manual data entry, leading to more accurate financial statements.
- Streamlining of audit processes: Automation can help tax professionals to identify and prioritize high-risk areas, allowing them to focus on areas that require attention and reduce time spent on low-risk areas.
- Real-time data access and analysis: Automation can provide tax professionals with real-time access to financial data, allowing them to identify trends and insights as they emerge.
The role of AI in tax practice
For tax and accounting firms, artificial intelligence (AI) can help professionals automate data extraction and analysis, enhance risk assessment, and improve fraud detection.
Donohue highlighted the role of artificial intelligence (AI) in her interview, noting that AI can be used to analyze large amounts of data and identify patterns that may not be immediately apparent to humans.
For example, one benefit of AI for tax and accounting firms is predictive analytics — AI can help tax professionals analyze large amounts of data quickly and accurately, providing insights into trends and patterns that would be difficult to identify using traditional methods.
Additionally, AI can help tax professionals to automate the process of extracting data from financial statements, reducing the time and effort required to perform manual data entry.
The future of tax preparation with automation and AI
Automation and AI offer numerous benefits to tax professionals, helping them to overcome the challenges of the changing tax landscape. The future of tax and accounting with automation and AI is bright, with the potential to transform the profession and provide better value-added services to clients.
When thinking about clients, Donohue explains in the article:
“It is ‘critical’ that technology be built in a way that is interactive with clients, who should be engaged with it and involved. ‘It becomes an experience for them and honestly, organizations are looking for that,’ she said. ‘They are no longer looking to just work with a firm where they toss data over a fence and then the next thing that they see is a finalized tax return. Every organization wants to be a part of it.’”
Overall, Donohue’s message is clear: automation and AI have the potential to revolutionize tax practice by improving accuracy, efficiency, and the quality of service provided to clients. If you’re a tax professional or a firm looking to improve your operations and provide more value to your clients, then it’s time to explore the benefits of automation.