The Evolution of Tax Workflow: Cognitive Capabilities Define Latest Era

Michael Herlihy, Head of Firm Edition Solutions & Delivery, Thomson Reuters
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In today’s global tax landscape, the challenges of complying with constantly evolving regulations are becoming more and more complex. For tax professionals, the way work is routed, standardized, and streamlined is critical in remaining compliant, meeting filing deadlines, and minimizing tax exposure. Whether it’s a CPA in a small to mid-sized accounting firm, an accountant at one of the Big 4, or an analyst within a multinational corporate tax department, an efficient and effective way to route tasks and automate repetitive processes is of the utmost importance—especially during tax season.

Over the years, major advances in technology have significantly improved the daily workflow of tax professionals. Ten years ago, “paperless” trends in tax were everywhere. The move away from manual processes (like binders filled with tasks that were passed from person to person) to managing documents electronically transformed the way tax professionals worked. Slowly but surely, papers, pens and filing cabinets were replaced with electronic inputs and computerized document management systems.

A few years later, web-based workflow offerings took hold, creating even more efficiencies in terms of access, collaboration, and automation. From online portals to automatic tax rate updates, tax professionals could manage provision, compliance, and reporting processes like never before. And, staying up-to-date with the latest research and guidance became light years easier as the latest tax regulation information was available 24/7. The most beneficial outcome of web-based workflow offerings, however, was the ability to collaborate simultaneously with clients and team members, no matter where they were located.

While the past 15 years or so has brought tremendous advances, the latest era of tax workflow is perhaps the most exciting yet. Cognitive capabilities are enabling today’s tax professionals to gain understanding of their data like never before. Tax workflow systems can now interpret patterns and generate reports in real-time by marrying content and data together as one. These predictive engines produce much more consistent and reliable outputs—and provide clients and stakeholders with detailed tax insight that can aid in strategic planning and analysis. This ability is invaluable for tax teams looking to up their game with high-value clients and senior management teams.

Workflow is much more than just routing work. It’s about truly understanding your processes, gaining insight about them 

What’s more is that this latest advancement couldn’t have come at a better time. With globalization at an all-time high and mounting global and national tax regulation to comply with, tax professionals are forced to do much more with less time. With larger firms and multinational tax departments dealing with thousands of repeatable tax processes and numerous stringent deadlines, every second matters. Workflow systems that can interpret processes help drive out inefficiencies, saving much needed time. By looking at the patterns in processes and data, these cognitive systems have the ability to suggest that a tax team bypass certain steps in a process or recommend they bring in more specialized help in certain areas.

Consider this example. By looking at patterns in source data, a tax workflow system with cognitive capabilities can determine a complexity score for a tax return and recommend an optimized workflow process for that particular use case. If the complexity score is low, then the workflow system will bypass specialist reviews, essentially following an “EZ Pass” lane to final review and signature. If the complexity score is high, the workflow process will adapt and recommend reviews by a state and local tax expert or other technical tax specialists.

Cognitive systems can also offer the latest tax content and advice when needed. For example, as a tax return progresses through a workflow process, a cognitive system can interpret both the source data and the related step in the process. At the appropriate time, pertinent tax content is surfaced to aid the accountant with the most relevant tax guidance, thus significantly enhancing the quality of their tax advice. So, if a company conducts business overseas, the cognitive engine can call up information regarding a specific country’s tax laws and treaties. This information can then be used to lower the company’s overall effective tax rate, among other strategic tax initiatives. This type of guidance is instrumental for a multinational company operating in numerous countries and jurisdictions around the world.

The importance of an optimized workflow

As technology advances, there is no doubt workflow processes will continue to evolve as well. No matter your profession, it’s critical to embrace the latest workflow technology and use it to your advantage. While maximizing the way you work is an on-going process, it is well worth the time and effort.

In the end, workflow is much more than just routing work. It’s about truly understanding your processes, gaining insight about them, and being much more thoughtful and strategic about how you’re using your resources. An optimized workflow powered by the latest technology not only allows you to work more efficiently, but also gives you the ability to pivot quickly to address challenges. And in today’s complex business landscape, that’s certainly time well-spent.

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