The Role of AI in Streamlining Tax Filing for Small Businesses
Many tax professionals spend an inordinate amount of time performing tedious, manual tasks. AI technology can streamline these processes and free them up for more valuable work.
Campbell notes that most data isn’t being managed in an AI-friendly manner due to teams and practitioners collecting it independently with no standardised processes in place.
1. AI-Powered Compliance Checks
AI excels at processing large volumes of information quickly, making it a useful tool for double-checking work – particularly compliance processes.
Therefore, it’s possible to significantly lower the risk of costly mistakes — an ever-present danger in financial services — which will save money and also protect reputational damage from noncompliance issues.
As regulations continue to shift, many organizations must spend considerable time and resources tracking changes and updating processes accordingly. Unfortunately, regulators often issue large fines when organizations do not adhere to regulations.
AI can assist businesses by automating and analyzing the process of gathering, collating and classifying data — freeing up human resources for more complex or sensitive matters. AI will also speed up data collection to boost efficiency while quickly detecting errors or areas of risk more rapidly.
2. AI-Powered Forecasting
Companies are increasingly turning to artificial intelligence (AI) tools to forecast business needs. These AI tools analyze customer behavior patterns and make predictions about future needs based on those patterns. AI’s forecasting abilities can help businesses reduce costs, increase profitability, optimize workforce planning, mitigate cyber attacks on national databases and make smarter decisions in other internal functions such as risk evaluation, capital expense planning or profit margin analysis (Alexsoft 2019).
Unstructured data poses one of the main barriers to wider AI adoption, as its predictability is restricted by unstandardized forms of analysis. But thanks to advances in computing power, this barrier is slowly disappearing as organizations use AI tools for tax functions. Campbell suggests companies starting their journey should focus on document intelligence and classification tasks that provide “low-hanging fruit.” This frees tax teams up from repetitive manual processing tasks as they concentrate more on business strategy development while eliminating repetitive and error-prone manual processing tasks that detract from overall tax strategy development.
3. AI-Powered Tax Planning
TaxGPT can make life simpler for individuals and businesses by streamlining tax compliance processes and financial operations, automating time-consuming repetitive tasks in accounting such as data entry, document validation, withholding rate calculations, complex report generation.
AI tools can also aid tax planning by offering valuable financial insights and recommendations. For example, tax AI could identify changes to regulatory laws and suggest ways to adapt accordingly or highlight opportunities such as paying vendors early for discounts.
At the core of an AI-driven tax function lies streamlining processes and making data AI-ready, according to Campbell. He says a lack of standard data collection practices among teams poses the biggest roadblock to AI adoption within tax functions; as most collect and handle their information differently and lack established processes or governance protocols in place.
4. AI-Powered Tax Return Preparation
AI can help keep up with changing tax regulations and ensure you file accurately by compiling information from different sources such as spreadsheets, bank statements, receipts and invoices.
Scanning documents and photos for text allows users to ensure data has been classified accurately, allowing them to focus on more pressing tasks. It’s an ideal solution for processing large volumes of paperwork such as passports, invoices, business cards and papers as well as subtitle texts superimposed onto video broadcasts or TV broadcasts.
AI systems can save both time and effort by automatically producing reports for clients and filing them on their behalf. But it’s crucial that you take time out to review any report produced by such systems in order to check for errors – this way, any future issues may be avoided!