Robotic Process Automation(RPA) and the automation of everyday Tax tasks

BalajiBalaji    12 March 2020
Robotic Process Automation(RPA) and the automation of everyday Tax tasks

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Technology is never stagnant. As the years pass, computers get more and more inseparable from the tasks of our everyday lives. We as humans develop complex economies and build complicated structures within our companies, and the advances in computers help us manage all of these structures with ease. This is how we evolve, and one such emerging advancement is RPA.

RPA stands for Robotic Process Automation. The word ‘robot’ might make you think of an actual physical robot replacing a human on the desk, but that is not the case at all. Robotic Process Automation is a system where software is built and implemented to automate repetitive tasks such as filing or sorting. To replace a human, the software must be able to take decisions on important matters. But the software is designed for high-volume simple tasks that take up too much time if done manually.

The software, also called bots, work on repetitive tasks that can easily get boring for a human due to the task’s unchanging nature. A solid example for such a task would be manually checking for new email, which has now become a thing of the past thanks to push-notifications. Since the bots take care of such unnecessary tasks, the human can now focus on matters that are important, such as business decisions.

Such manual tasks are common in the tax department of any company. This is augmented in the VAT compliance process, since VAT is a tax which touches most transactions (buying and selling) undertaken by a company. While ERP’s/ core accounting systems play a major role in VAT compliance- bots & RPA can be great enablers to automate all manual tasks done as part of the VAT return preparation and filing process.

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Using RPA to solve pain points in Tax departments

The Tax function is rampant with many areas where manual, repeatable and time-consuming processes are still being performed to prepare and file information required by the tax authorities. Disparate financial systems and processes often pose significant challenges in gathering and reconciling tax related data.

Robotic Process Automation can be used to put bots in charge of repetitive tasks such as calculating the tax payable. Bots are programmable and work great with instructions for a certain task that needs to be carried out the same way every time, i.e, the tasks are repetitive and unchanging.

RPA in tax can handle the following:

  • Transactional (Bills)
  • Repetitive (Calculations)
  • Electronic (Filing)
  • High Volume (Collecting data from different source systems)

A few areas where there are tax RPA opportunities exist are:

  • Gathering data for computing tax provisions and accounting
  • Gathering data from accounting systems to prepare schedules need for tax returns (Eg: Fixed asset schedules)
  • Compiling input VAT claimable from Employee food and travel related expense submissions
  • Consolidating data from multiple ERP systems/ BOLT on software to prepare for VAT Return filing
  • Populating tax and VAT return forms online, submit tax returns and related payments

RPA for Invoices

Invoices from various suppliers come in a variety of formats, i.e., Word, PDF, or even a hard-copy. With technologies such as Optical Character Recognition and Natural Language Processing, the bots are enabled to scan and scrape the necessary information from each invoice. After the scanning, the bots can automatically reconcile this information on the organization’s database.

Since bots are real-time, they can be used to reduce any error made by a human. For example, for invoice processing or tax-returns filing, a set of rules can be programmed into the bot, ordering it to check for any discrepancies. Whenever data is manually entered or edited in any database, the bot would monitor and can alert the user if they make a mistake.

This real-time correction can save a lot of time and can avert monetary losses. Erroneous filing is detected on the onset and thus the organization continues to remain compliant as well.

RPA and audits

Auditing is yet another tax function that requires a lot of human attention. When it comes to auditing, there are a lot of nuances that cannot be programmed or codified as rules and so, it isn’t wise to delegate and automate every task related to auditing using RPA. But, simple, high-volume, and repetitive tasks can be delegated to a bot. For example, reviewing simple clauses within contractual documents to ensure that there aren’t any grammatical errors is a task that can be codified for and effectively handled by a bot.

By implementing the standard Robotic Process Automation Solutions, a tremendous leap in productivity can be triggered due to their real-time nature. From documents that need to be reviewed frequently, to tax-filing templates that need to be updated or checked before being approved for usage for the next fiscal year, a bot can perform a wide range of conditional (“if/then”) tasks and generously bring forth tax automation within an organization with legacy software.

RPA: Best practices for implementation

Robotic Process Automation solutions can transform businesses as they tend to overtake and maintain all mundane activities, leaving only the most important and intellectually stimulating tasks and decisions for humans. However, merely programming and deploying a bot that not solve problems. Further, if the bot is not properly programmed, it can introduce a new set of problems instead of solving existing ones.

The technical details aside, a bot is introduced within a certain process/task to not just solve a problem, but to also perform as equally as a human employee. Therefore, defining the role of a bot within your organisation is very important. It is similar to hiring a new employee and defining their role; what would their responsibilities be, how would you monitor their performance, etc.

Firstly, the bot and its roles need to be aligned to the goals and long term plans of your company. This is to ensure that the activities that are delegated to the bot are the ones that are suitable for its programmable and rules-following nature. Secondly, having a clear vision of a successful implementation of a bot is necessary. While placing and monitoring daily productivity targets for bots is fairly simple, as they’d automatically work on the assigned tasks without any manual triggering; analyzing whether their tasks contribute to the overall progress to the organisation isn’t.

There are some simple conditions that a bot can fulfill to become successful:

  1. Robotic Process Automation solutions should augment human capability.
  2. RPA should smoothly connect different departments within an organisation.
  3. RPA should be consistently accurate at reconciling data and averting errors.
  4. RPA should better the efficiency of the processes on which the bots are assigned.

Conclusion

Robotic Process Automation solutions can be used to automate Tax tasks. The bots do not replace humans; they enhance the working environment by taking care of repetitive tasks so that the human can focus on more creative tasks that cannot be automated and that needs to be strategized. From filing to calculating, RPA can handle it all, leading you toward better tax-compliance. Deploying bots to minimize manual labour is something every corporate entity should look into.

Using software tools to simplify and enhance your workflow and tax automation is never a losing proposition as the money spent on such tools always pays off in terms of more productive hours and a manageable system.

If you have read this far, hopefully, you know realize how imperative RPA is for Tax departments.

Stay compliant with www.emtaxtech.com

Disclaimer : Content posted is for informational & knowledge sharing purposes only, and is not intended to be a substitute for professional advice related to tax, finance or accounting. Each article/view/comment posted by third party readers/subscribers of our website on topics of tax and accounting is their personal opinion and due professional care should be taken by you before you act after reading the contents of that article/post. No warranty whatsoever is made that any of the articles are accurate. and is not intended to provide, and should not be relied on for tax or accounting advice.

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