Introduction to tax compliance automation
The COVID-19 crisis has accelerated the adoption of digital technologies, and companies that haven’t started their journey with tax automation are realising it’s time to leave behind static spreadsheets in favour of smarter, more innovative tools.
If your company is still biding its time, here are four reasons why it’s time to press ‘Go’ on automating your tax processes.
4 reasons to automate your tax compliance
1. The evolution of tax authorities
Revenue services across the world have started embarking on digital transformation drives with the aim of enhancing revenue collection, improving efficiency and enabling real-time reporting. They are chasing benefits including increased transparency and the ability to employ data analytics to get a much more detailed picture of taxpayers’ accounts. SARS is a case in point; the revenue service has recently invested R3 billion on technology upgrades.
This shift will increasingly require enterprises to comply with a technology enhanced environment where they will be met with smarter regulators. As a tax leader, you have to adopt the relevant technology and systems throughout your tax management and submission process.
With tax authorities earnestly embarking on digital transformation journeys, keeping pace with these changes is non-negotiable. “Digitalization makes life easier for authorities by easing the administrative burden, which gives officials more time to focus on higher-value activities.“
2. Growing compliance obligations and external pressures
The volume of burden of compliance obligations in organisations has grown drastically and automating your tax compliance function is key to effective risk reduction, real-time analysis capability and avoiding penalties for late submission. Being able to plan strategically and manage risk is top of mind for many tax leaders, in fact EY’s “Reimagining the tax and finance function” survey indicated that 94% of respondents plan to reduce the cost of their tax and finance function over the next two years.
By leveraging tax software platforms, professionals will have more time and resources to minimise tax liabilities, while reducing their risk of non-compliance.
3. Utilising resources efficiently
Technologies such as artificial intelligence and robotics are increasingly applied to tax, the outcome being that the contribution of people in the compliance process is being progressively limited to high-level review and strategic analysis functions.
The use of tax management software frees professionals to identify potential non-compliance as well as efficiency opportunities. As tax professionals engage in less routine tax compliance work, they will face new demands and efficient ways to analyse data will become essential. With accurate data on hand, they can proactively find potential non-compliance and avoid penalties and turn financial information into actionable insight. With the right tools backing them up, they can invest more time in using their tax and accounting expertise to improve their organisation’s data quality and decision making.
4. Avoiding the havoc and compliance costs of late adoption
While predicting the future is difficult, the way that revenue authorities are evolving suggests that tax filing requirements are set to only become more technology and data driven. If a company is ill prepared or late in implementing tax automation software, they could be caught off guard and the cost of catching up can quickly balloon. Its time for tax functions to start looking at automation pre-emptively rather than trying to fix issues reactively and never catching up.
With revenue services digitising their systems, companies increasingly need a platform that enables data-driven compliance checks, automates their processes, and integrates to revenue authorities. A great example of this is Konsise, which automates tax returns, compliance checks and integrates to SARS eFiling.
For multi-national companies, new reporting rules and the increased interchange of information among tax authorities accentuate the need to invest in centralised tax management software that can serve multiple jurisdictions and ensure filings across countries and business units are consistent.
Simply put, companies on manual systems will not be able to keep up with all the demands of evolving tax compliance, posing a massive risk to the business. If the recent past has shown us anything, it is the importance of staying ahead of curve, and being prepared in advance.
The pace and nature of competition is being led by the organisations with the courage and determination to solve business challenges in entirely new ways and for many, automation of processes such as tax preparation and submission are key to success.
In conclusion, tax compliance automation is a critical step for companies looking to stay ahead of the curve in today’s digital world. The increasing digital transformation drives by revenue services worldwide have made it necessary for enterprises to comply with a technology-enhanced environment where they will be met with smarter regulators.
Automating your tax processes can help reduce risk, enhance efficiency, and avoid penalties for late submissions. It allows tax professionals to engage in less routine tax compliance work, giving them more time to analyze data and find potential non-compliance. By staying ahead of the curve, companies can avoid the compliance costs and havoc of late adoption.
With a platform like Konsise, companies can automate tax returns, compliance checks and integrate with revenue authorities. By automating tax processes, businesses can not only streamline their tax compliance function, but they can also invest more time in using their tax and accounting expertise to improve their organisation’s data quality and decision-making.
Interested in learning more about Konsise? Book a demo today to get a feel of what a leading tax management system offers.
Learn how our software helps you manage your entire tax process; from structuring deadlines and managing tasks, to submission to eFiling. Get accurate insight into your company tax compliance, in a single platform.
What is tax compliance automation?
Tax compliance automation refers to the use of software or other technologies to streamline the process of tax compliance, including calculating, preparing, and submitting tax returns, as well as tracking tax-related data and ensuring compliance with tax laws and regulations.
What are the benefits of tax compliance automation?
Tax compliance automation can help to reduce errors, save time, improve accuracy, and enhance compliance with tax laws and regulations. It can also provide greater visibility into tax data and streamline communication with tax authorities.
What are some examples of tax compliance automation tools?
There are many different types of tax compliance automation tools available, including tax software, tax calculators, tax reporting tools, and tax analytics platforms. Take a look at Konsise.
How can tax compliance automation help to reduce errors?
By automating the tax compliance process, tax compliance automation tools can help to reduce the likelihood of errors in calculations, data entry, and reporting. This can help to minimise the risk of penalties and fines from tax authorities.
What are some challenges associated with implementing tax compliance automation?
Some of the main challenges associated with implementing tax compliance automation include the cost of software and training, the need to integrate with existing systems, and the need to ensure compliance with changing tax laws and regulations.