How Is AI Used in Tax and Accounting?

Real-world applications of AI in the tax industry

Artificial intelligence (AI) leverages advanced technology to replicate human intelligence, streamlining workflows with greater efficiency and precision. Generative AI, a more specific application of AI technology designed to create content and ideas, is becoming increasingly significant in the tax sector. These tools offer substantial benefits by streamlining compliance processes, automating transactional tasks, and improving tax planning strategies.

The key benefits of AI for tax professionals include:

• Enhanced accuracy and efficiency of tax research
• Simplified compliance processes to mitigate risk
• Streamlined workflows to save time and reduce costs
• Improved insights for strategic decision-making

Generative AI in tax research

AI-powered tools significantly minimize the time required for tax research. Traditionally, locating answers to complex tax questions or navigating the tax code could take hours. Now, generative AI can scan high volumes of content instantaneously and deliver concise summaries of relevant information.

Bloomberg Tax Answers provides quick, AI-generated responses to tax questions, sourced from our industry-leading source material, including our renowned Tax Management Portfolios. This feature is integrated into our suite of solutions, so tax professionals can access trusted AI for tax questions throughout their workflow, right where they need it.

In a recent survey of senior-level tax professionals who use Bloomberg Tax regularly, 84% of respondents agreed that our AI tools help them find answers more quickly, allowing them to do more work in less time.

Get quick AI-generated responses to search questions – sourced from Bloomberg Tax’s trusted tax intelligence and integrated right at the point of application.

Automated compliance and risk management

Compliance is a critical yet resource-intensive component of tax preparation, often requiring significant time and effort to collect, monitor, and verify filing documents across multiple entities and jurisdictions. By minimizing the risk of human error, automation technology ensures that calculations and compliance filings are precise and up to date. This reduces the likelihood of costly penalties and reinforces confidence in results.

Features like the Bloomberg Tax Research Compliance Tracker can minimize the risk of missed deadlines by automating key functions such as gathering required tax forms and monitoring evolving filing obligations and deadlines.

Plus, automation tools can make it easier for tax teams to detect potential reporting discrepancies and uncover areas of potential risk, so they can be more confident in their financial reporting. Automated data transformation can optimize year-over-year comparisons to help identify anomalies or inconsistencies earlier in the process.

These advanced capabilities enable tax professionals to operate more efficiently, reduce the likelihood of human error, and maintain compliance standards without overburdening their teams.

Streamlined workflows to increase productivity

Tedious manual tasks like data entry leave room for errors and inefficiencies. AI technology can automate those repetitive tasks traditionally handled in spreadsheets and eliminate workflow bottlenecks, giving tax teams a clean, repeatable process that mitigates risk and saves time.

Automated data transformation

AI removes the need for manual data preparation by automating processes like year-over-year roll forward and validation. For example, Bloomberg Tax Workpapers offers built-in, tax-specific features to automate data processes and update calculations to reflect the latest tax laws and rates. The Data Connect function automatically updates your workpapers when new data is entered, eliminating the risk of formula errors or missteps from last-minute entries or changes to the dataset – no reformatting required.

Smarter tax calculations

Tax automation software offers a reliable solution for managing complex tax calculations with accuracy and speed. Bloomberg Tax’s AI Expression Generator demonstrates how AI can fit seamlessly into existing tax workflows: Instead of memorizing and entering various formulas into spreadsheets to perform tax calculations, the AI Expression Generator does most of the work for you. Simply enter a prompt that describes what you’re trying to do, and the tool will automatically generate and apply the formula to your workpaper.

Instantly create tax formulas using simple language in Bloomberg Tax Workpapers.

Cost savings

AI enables organizations to achieve high-quality outcomes with reduced reliance on outsourcing, resulting in significant cost savings while maintaining operational excellence. In our recent survey of Bloomberg Tax Research customers, 80% of corporate clients using our AI-backed resources say the technology allows them to do work in-house that they would have otherwise sent to outside consultants.

Improved insights for strategic decision making

These technological advancements do more than just save time; they empower tax professionals to focus on delivering higher-value outcomes. AI-powered systems continuously learn from stored information, identifying patterns and uncovering insights that might otherwise go unnoticed. With advanced data-driven intelligence, AI empowers tax professionals to identify valuable tax-saving opportunities and reallocate their time and resources to driving growth and becoming a strategic partner to the business.

The best AI software for tax professionals

For tax professionals, the most effective AI tools are those purpose-built for the industry by experts with a deep understanding of its complexities. When protective guardrails aren’t in place, implementing AI technology can come with varying levels of risk.

When selecting an AI tool, prioritize providers that deliver regular updates and maintain strict compliance with current tax laws. Ensure the software aligns with the demands of the profession, offering both accuracy and reliability.

Bloomberg Tax’s cutting-edge AI technology is built on a foundation of comprehensive primary and secondary sources as well as award-winning news and expert analysis – including our database of more than a half-million agency guidance or determination documents and our ever-growing collection of hundreds of practitioner-written Tax Management Portfolios. Our large language models are trained on this specialized content, and every answer our AI tools provide is sourced from expert-vetted materials.

[Download our guide, How to Evaluate AI Solutions for Tax, to learn how to evaluate the right AI tools for your practice.]