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How Automation Software Is Reshaping the Future of Tax Compliance
What if your tax department could move from a deliverable-centric approach, with all its bottlenecks and inefficiencies, to a calculation-first mindset that streamlines workflows and enhances accuracy? For decades, tax professionals have been weighed down by manual processes, disjointed systems, and constantly shifting regulations. But with tax automation software, we’re entering a new era – not just of efficiency but also of agility and precision.
For tax professionals and departments struggling to keep up with increasing complexities, automation is no longer a luxury; it’s a necessity. Here’s how automation can revolutionize your tax workflow while addressing the most pressing challenges facing the industry today.
Current challenges in tax workflows
Tax departments often rely on outdated systems, manual processes, and tools not tailored for tax-specific needs. These inefficiencies can create disjointed workflows, duplicated efforts, and an increasing risk of human error. Compounding the issue, tax professionals are grappling with factors such as shrinking talent pools, rapidly changing tax regulations, and the rising need for real-time data accuracy.
High volumes of data processing, the ongoing challenge of navigating multiple ERP systems, and adjustments driven by tax law changes – such as certain provisions of the 2017 Tax Cuts and Jobs Act expiring at the end of 2025 – only intensify the pressure. These challenges highlight the need for solutions that go beyond surface-level deliverable objectives and tackle the root of inefficiencies.
[On-demand webinar: Transforming the Tax Workflow. Learn about the value of moving toward a calculation-centric process focused on optimizing the part of the tax process where the core tax work is performed: your workpapers.]
A calculation-centric approach
Every tax department aspires to be agile, accurate, and prepared for change. The key to achieving this lies in adopting a calculation-centric approach to tax processes. Rather than focusing solely on final deliverables like compliance forms, this approach optimizes the core tax calculation workflow – where your most critical data preparation and adjustments occur.
Bloomberg Tax’s integrated suite of solutions exemplifies this shift. Made for tax professionals by tax professionals, our platform eliminates manual redundancies by automating data transformation processes, simplifies research with automatic tax law updates, and offers full control of your workpapers with cell-level reviews and tracking. It ensures reduced risk, better accuracy, and faster responses to regulatory changes.
How tax automation software solves compliance challenges
Tax automation software provides a host of benefits that extend far beyond simply saving time. By streamlining workflows and prioritizing accuracy, automated software solutions provide robust compliance support that empowers tax professionals to move beyond repetitive compliance and reporting tasks and instead focus on strategic decision-making.
Ultimately, tax automation drives efficiency, accuracy, and compliance – positioning tax departments not just as operational units but as strategic contributors to organizational success.
Improved data integrity and management
Handling tax data often involves reconciling inputs from multiple ERP systems and disparate sources, leading to time-consuming tasks prone to human error. With automated solutions, the risk of manual errors is significantly reduced, ensuring that your calculations and reporting are precise and compliant with evolving regulations.
With Bloomberg Tax Workpapers, for instance, data from multiple sources is automatically collected, standardized, and prepped for calculations. This automation minimizes manual entries, reduces inconsistencies, and ensures smooth processing of even the most complex data.
Roll forwards, which traditionally consume substantial time and resources, become effortless through automation. With just a click, your workpapers are refreshed and updated for the next reporting period. That’s time saved for your department and a significant reduction in manual reconciliation errors.
Additionally, automation enhances scalability. Tax departments can efficiently manage increasing data volumes without proportionally increasing resource requirements. This ensures that as businesses grow or new regulations are introduced, their tax processes can adapt seamlessly.
Accurate and up-to-date calculations
Tax automation software ensures your calculations are always aligned with the latest federal, state, and international tax laws. By incorporating automatic updates for regulatory changes, software solutions help organizations stay ahead of the curve. For example, if regulatory changes adjust your taxable rates midyear, this software automatically incorporates the correct rates into your calculations. This not only reduces the likelihood of costly penalties, but also boosts confidence in audit readiness.
Imagine needing to recalculate state taxable income after a law change. Bloomberg Tax Workpapers simplifies this process using customizable formulas that automatically weigh and apply applicable tax rates for each state. For multinational companies, it even integrates foreign tax rates across multiple jurisdictions.
Customized alerts for changing obligations and requirements
Meeting compliance deadlines and minimizing risk is paramount. This often involves managing extensive financial data, annual roll forward processes, and detailed reporting requirements. Compliance tools like Bloomberg Tax Research’s Compliance Tracker automate these steps, ensuring that forms, due dates, and requirements are generated and monitored within a single, efficient platform.
Seamlessly gather tax forms and track deadlines with Compliance Tracker, a feature of Bloomberg Tax Research.
Integrated and intelligent tax solutions
One of the most common pain points for professionals is the fragmentation of their tools. Researching tax code in one platform, performing calculations in another, and manually inputting data into reports creates silos that slow down workflows.
Automation tools enable real-time collaboration and visibility across teams, fostering a more proactive approach to tax management. Bloomberg Tax takes an integrated approach by connecting our tools solutions into one ecosystem, including Workpapers, Provision, Fixed Assets, and Research.
For example, using integrated features, M-adjustments calculated in Workpapers can seamlessly sync to Provision without requiring reentry. The result? Streamlined calculations, fewer errors, and more time for strategic planning.
Empowering decision-making with AI
The role of AI in tax workflows is expanding rapidly. Bloomberg Tax’s AI-powered Answers, embedded directly within its tools, offers tax professionals instant insights into complex queries. Instead of leaving their workpaper to comb through lengthy analyses, users receive summarized, actionable answers right where they need them, complete with source material references.
With AI handling routine data analysis, tax professionals can shift their focus to the strategic aspects of their work – navigating compliance risks, forecasting future liabilities, and advising their organizations.
Real-world example: transforming a tax department of one with timesaving automation
Take, for instance, a mid-sized pharmacy services company struggling to meet tight compliance deadlines while grappling with outdated tools. Their tax department consists of just one person, but by implementing Bloomberg Tax’s automated solutions, the manual data entry and preparation that used to take days was done in seconds – without any manual copying and pasting.
Roll forward processes that once took days were completed in just hours, while integrated workflows minimized the need for error-prone manual inputs. In particular, the company estimates that automation has cut the time spent on M-adjustment calculations by at least 60%.
Not only did this address acute compliance and reporting needs, but it also positioned the company for long-term scalability as they achieved faster turnaround times with growing data complexities.
[Case Study: See how one company adds new entities to their provision in seconds using Bloomberg Tax.]
You deserve tax automation software that works as hard as you do
Tax automation is more than a tool; it’s a catalyst for transformation. By moving away from manual processes and fragmented systems, organizations can move away from a compliance-first approach to instead focus on high-value activities such as risk management, scenario modeling, and long-term forecasting.
Maintaining compliance while navigating a rapidly evolving tax landscape is no easy task, but you don’t have to do it alone. Bloomberg Tax’s suite of solutions offers an unmatched combination of robust automation, globally trusted tax intelligence, and thoughtful integration – making it a must-have in any modern tax professional’s toolkit.
Request a demo to see how Bloomberg Tax can revolutionize your workflows and help you achieve smarter, faster, and easier tax compliance.