Why Do Tax Automations Fail? Tax Process Automation Is A Journey, Not A Destination

s we’ve witnessed in the last two years, the global labor shortage is a post-pandemic new reality that businesses of all sizes must deal with. One of the areas where labor shortage is a real challenge is the field of Tax. As more senior Tax professionals opt for early retirement and not many college grads are willing to put in the long hours on repetitious spreadsheets, Tax has a real problem. To make the issue worse, while Tax Technology has advanced many Tax Departments are still relying on the old and time-consuming manual procedures performed by the Tax preparers. Why? Honestly, a sustainable transition to technology and automation is not that easy. Simply hiring a consultant to automate a Tax process is not a realistic and sustainable solution if your Tax professionals who use the new solution cannot maintain it for future use. This is why most Tax Technology investments either fail after the 1st cycle or do not yield the expected ROI.

Designing rewarding automated solutions require some basic understanding and best practices of technology concepts. Therefore, we believe it is unreasonable to expect a Tax professional to develop or maintain complex scripted solutions that are normally developed by professional IT staff.

To guarantee automation success and to protect investment in automation we recommend the following:
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Common mistakes made in tax automation process

Lack of preparation: Failing to properly prepare for automation, such as not thoroughly understanding current processes and not having clear goals, can lead to implementation problems and slow progress.

Inadequate data management: Poor data management practices, such as failing to validate and clean data, can result in inaccurate results and delayed processes.

Neglecting security and privacy: Neglecting to implement appropriate security and privacy measures can lead to data breaches and loss of sensitive information.

Underestimating complexity: Underestimating the complexity of tax processes and failing to adequately address all process components can lead to errors and inefficiencies.

Ignoring feedback: Failing to gather and incorporate feedback from stakeholders, including tax professionals and business owners, can limit the effectiveness and success of automation.
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