Pairing tax with artificial intelligence

Deeper insights through tax AI and analytics

Leading tax departments are generating deeper insights from the large volume of data they collect, helping business leaders identify issues and seize opportunities. They’re doing so by employing advanced AI and analytics tools that can aggregate and draw conclusions from multiple data sources and provide solutions to specific challenges faced by individual tax departments.

Cognitive technologies and advanced analytics can allow tax departments to accomplish the following tasks such as:

• Analyze global compliance data to help business leaders anticipate trends, spot anomalies, and reduce global effective tax rates
• Streamline quarterly and annual tax provision processes while leveraging the data generated for better insights for tax planning
• Verify in real time the tax treatment of individual transactions across multiple jurisdictions, for improved business operations

In the future of tax, using tax AI and analytics to unleash the full power of your data can enhance the tax function’s efficiency and value to the company while enabling other parts of the business that rely on tax data to benefit as well.

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From back office to business accelerator

To help your tax team stand out from the back-office crowd, start by identifying key value drivers and critical data points to monitor in real time. Then use advanced tax technology and data analytics to identify trends and changes over time—which you can then bring to business leaders across the organization.

Because of AI and tax analytics, you’re not just answering the question that was asked of the data. You’re building off your data sets and existing software tools to address your specific needs and generate fresh insights. Places to look may include:

• Supply chain, including organizational shifts in sourcing and movement of goods
• Tax reform changes, such as new provisions under the GILTI, BEAT, and interest expense regimes
• Global indirect tax, including VAT, sales and use taxes, customs duties, and tariffs
• Transfer pricing, recognizing the dependence on both organizational and outside data
• R&D credit, teaming with the business to analyze activities entitling the organization to tax credits

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Think big. Start small. Act fast.

When setting out to improve your tax processes, the hardest part can be knowing where to begin. These steps can help point you in the right direction.

Think big: Start by sizing up your opportunities. Talk to people in your organization to identify recurring instances across the business when significant time is spent inefficiently today—perhaps for scenario analysis or strategic planning. Be sure to include your finance colleagues in the brainstorming, as they often face similar challenges.

Start small: Next, prioritize your opportunities based on potential value added, risk, and ease of implementation. Start with things that have a wide impact and think beyond financial benefits. For instance, the value might be increased efficiency, mitigated risk, or new benefits from prior technology investments. To gauge risk and ease of implementation, consider everything needed to build and maintain your project. But don’t start from scratch. Look at what’s being done in other departments. Are there resources you can leverage?

Act fast: Once you’ve identified your one or two top priorities, develop a proof of value that outlines hurdles, risks, and available assets. Then socialize the benefits to help others understand. It’s critical at this stage to let end users react to what you’re planning so you can gauge your change management challenges and tailor the end product to users’ needs. You don’t want to get your idea to the finish line only to learn it's not being adopted because you didn't get enough input from the people who are expected to use it.

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Explore other chapters in the Age of With series

What idea links machines and people? The common answer is versus. But the true role of analytics and AI along with other tools is collaborative. The future of artificial intelligence is a future of human potential: people with machines, doing more than either could alone. Welcome to the Age of With™. Explore the other chapters in this series.

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