How AI Tax Software Is Redefining The Accounting Industry
If you are an accountant or a tax professional, you know how challenging and time-consuming it can be to keep up with the ever-changing tax rules and regulations, especially in the current economic climate.
You also know how important it is to provide accurate and timely services to your clients while staying competitive and profitable in the market.
But what if there was a way to make your work easier, faster, and more efficient?
What if you could leverage the power of artificial intelligence (AI) to automate and streamline your tax accounting processes while gaining valuable insights and recommendations for your business?
In this blog post, we will explore how AI tools for accounting can help you achieve these goals, and what are some of the best AI tax software for accountants available in 2023.
How is AI used in tax?
You may have noticed that tax software has dramatically evolved over the years.
And while Traditional tax software has some limitations, namely:
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- It often requires manual input of data, which can be tedious and prone to mistakes.
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- It may not be able to handle complex tax situations or provide personalized advice.
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- It may also become outdated as tax laws and regulations change frequently.
Today, artificial intelligence (AI) is revolutionizing the field, streamlining and enhancing processes like never before!
Now, you might be wondering, what exactly is AI tax software, and how does it work?
AI tax software uses artificial intelligence technology to automate and optimize tax-related tasks. It can sift through vast amounts of financial data, identify tax deductions, calculate tax liabilities, and even predict tax outcomes, all in a fraction of the time it would take a human.
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Benefits of AI Tax Software for Accountants
The use of AI in tax software comes with numerous benefits. Some of the benefits are:
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- Increase in efficiency: Automating repetitive tasks, allowing you to focus on higher-value activities.
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- Faster invoice processing: AI tools can automatically extract and validate data from invoices, receipts, and other documents, reducing manual errors and speeding up the workflow.
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- Higher accuracy: AI tools can perform complex calculations and validations with high precision and reliability, ensuring compliance with tax rules and regulations.
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- Scalability: AI tools can handle large volumes of data and transactions without compromising on quality or performance, allowing accountants to scale their services according to their client’s needs.
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- Real-time insights: AI tools can analyze data and provide real-time insights and reports on various aspects of the business, such as cash flow, profitability, risk assessment, and tax planning.
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- Data prediction: AI tools can use historical data and machine learning algorithms to predict future trends and behaviors, such as customer churn, revenue growth, tax liabilities, and audit outcomes.
Examples of AI Tax Software for Accountants
There are many AI tools for accounting available in the market today, each with its own features and functionalities.
Let’s quickly take a brief look at some of the AI tax software available for accountants in 2023:
Blue dot
Blue dot is a company that provides tax compliance and VAT reclamation solutions for modern spend across the enterprise.
Some of its features are:
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- It can automatically track, report and calculate taxable employee benefits hidden in expense reports for effortless compliance.
- It can provide a 360° view into all employee-driven transactions, ensuring tax compliance and reducing tax vulnerabilities for modern spend across the enterprise.
- It can improve compliance with global tax regulations and maximize VAT reclamation through the world’s leading digitalised VAT Compliance Platform.
- It can leverage an automated AI and ML-powered application to analyze the spend that is subject to wage taxation or specific pay-as-you-earn reporting.
- It has received positive testimonials from its customers, who praise its technology, results, compliance, and process transformation.
- It can automatically track, report and calculate taxable employee benefits hidden in expense reports for effortless compliance.
The pricing plan of Blue dot is gotten upon request.
You can use Blue dot in your practice to streamline your tax compliance and VAT reclamation processes, save time and money, and reduce risk and errors.
April
April is a company that provides tax automation software for e-commerce businesses, such as Shopify, Amazon, and Etsy.
Some of its features are:
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- It can automatically calculate and collect sales tax for every order across multiple channels and jurisdictions.
- It can file and remit sales tax returns to the relevant authorities on time and accurately.
- It can sync and reconcile sales data from different sources and platforms, and generate detailed reports and analytics.
- It can handle complex tax scenarios, such as nexus, product taxability, exemptions, discounts, refunds, and more.
- It has received positive reviews from its customers, who praise its simplicity, reliability, affordability, and customer support.
- It can automatically calculate and collect sales tax for every order across multiple channels and jurisdictions.
The pricing plan for April is gotten upon request.
You can use Apri in your accounting practice to automate and simplify your e-commerce tax compliance work, save time and money, and avoid penalties and audits.
Thomson Reuters
Thomson Reuters is a company that provides information, insights, and solutions for various industries and professionals, such as legal, tax, accounting, media, risk, compliance, and government.
Some of its features are:
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- It can deliver trusted news and intelligence that power businesses and markets.
- It can provide expert analysis and commentary on the latest trends and developments in various domains.
- It can offer innovative technology and software solutions that enable users to work smarter and faster.
- It can connect users with a global network of customers, partners, experts, and peers.
- It has received positive recognition from various awards and rankings, such as the Fortune Global 500, the World’s Most Innovative Companies, the World’s Most Admired Companies, and more.
- It can deliver trusted news and intelligence that power businesses and markets.
The pricing plan for Thomas Reuters is gotten upon request. And it offers a free trial and a contact us option for some of its products and services.
You can use Thomson Reuters to access reliable and comprehensive information, insights, and solutions for your tax, accounting, audit, and finance needs.
Implementing AI Tax Software in Accounting Firms
Getting started with AI tax software may seem challenging, but it’s a lot simpler than you might think.
Here’s a detailed guide on how to proceed:
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- Identify your tax-related needs and objectives: The first step is understanding your firm’s needs. What are the tax-related tasks that take up most of your time? Where do errors most often occur? Identifying these areas can help you pinpoint the functions you want in your AI tax software.
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- Research the market: There are several AI tax software options available on the market. Research each software’s features, capabilities, and pricing models. Consider platforms that integrate with your existing systems for a seamless transition.
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- Choose the right software: After you have an understanding of what’s available, make a decision based on your firm’s specific needs, budget, and long-term goals. Keep in mind that the most expensive software isn’t necessarily the best for your firm.
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- Plan for implementation: Once you’ve chosen your software, create an implementation plan. This should include a timeline, key tasks and responsibilities, and any necessary staff training.
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- Training and support: Ensure your team is adequately trained to use the new software. Many providers offer training as part of the package. Additionally, make sure support is available should you encounter any issues during the implementation process.
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- Test and optimize: Finally, it’s essential to test the software with a small set of data before going live. This will allow you to iron out any issues. Once you’re confident that the system is running smoothly, you can start using the software fully.
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- Monitor and adapt: Once your AI tax software is up and running, continue monitoring its performance and be ready to adapt as necessary. Remember, technology is ever-evolving, and so are the needs of your firm.
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Future Trends in AI Tax Software
AI tax software is still in its early stages of development and adoption, but it has the potential to revolutionize the tax industry.
Some examples of AI tax software that are already available or in development in that respect include:
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- TurboTax Live: A service that connects users with live certified public accountants (CPAs) or enrolled agents (EAs) who can review their tax returns and provide advice via video chat. The service also uses AI to scan documents and extract relevant information.
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- H&R Block Tax Pro Go: A service that allows users to upload their documents online and have them prepared by a tax professional. The service also uses AI to match users with the best tax professional for their needs and to check their returns for accuracy and completeness.
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- Taxfyle: A platform that connects users with licensed tax professionals who can prepare their returns on demand. The platform also uses AI to estimate the cost and time of the service and to optimize the user’s tax outcome.
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- KPMG Tax Reimagined: A suite of solutions that leverages AI to help businesses manage their global tax obligations. The solutions include KPMG Clara, an AI-powered audit platform that analyzes data and identifies risks; KPMG Ignition Tax, a cloud-based platform that automates tax processes and provides insights; and KPMG Tax Intelligence Solution, a platform that uses natural language processing and machine learning to monitor and interpret tax regulations.
Looking ahead, it’s clear that AI will continue to play a critical role in tax preparation and compliance.
Technologies such as machine learning and natural language processing will further enhance the capabilities of tax software.
AI tax software could become more intelligent, personalized, proactive, and conversational. This could potentially lead to fully automated tax filing, saving accountants even more time and effort!
It could also integrate with other platforms and services, such as accounting software, financial planning tools, e-commerce platforms, and digital wallets.
AI tax software could ultimately transform the way people and businesses manage their taxes.
Conclusion
In conclusion, AI tax software presents a significant opportunity for accountants to boost efficiency, accuracy, and cost-effectiveness.
And as technology continues to evolve, it’s crucial to stay ahead of the curve and embrace these advancements.
So, are you ready to take your tax operations to the next level with AI? I hope so.
You can take a look at the top 10 AI accounting software we believe are a must-have in your practice
I can’t help but feel wary about any program that does all the thinking for you. I’ve always used software that updates automatically as tax liabilities change and at this point do not see the benefits of AI software outweighing more traditional, secure software for accountants.
I can see the benefits, but many of these features already exist with traditional software for accountants. My firm has used AMS software for years and the scalability and higher accuracy are key. The other good thing is the security that traditional disc-based software offers that AI lacks.