Significance of Automating Tax Compliance with AP

Significance of Automating Tax Compliance with AP

By CFO Tech Outlook | Wednesday, August 28, 2019

It is time to discover cloud-native, flexible platforms that can help businesses in addressing tax reporting reforms. Moreover, they allow seamless integration with the existing ERPs as well as with the changing rules of countries.

FREMONT, CA: Over the past years, enterprise finance departments focused steadily on automation processes. Organizations have cut down on paperwork and the significant expenses attached to it, by transforming accounts payable (AP) techniques. In modern times, being eco-friendly and lending a hand to the bottom line are considered positive attributes. But it is also equally essential to protect companies from getting exposed to severe audit risks.

Every government across the globe is modifying its respective tax-reporting and financial methods by inculcating digital processes. A few governmental bodies have designed different processes, which solely deal with the value-added tax (VAT) gaps. Moreover, the advanced technologies look into every invoice to validate the VAT allowance in real-time.

The digitalized corporate procurement methods are now overlapping with the digital revolution of the public revenue collection. Organizations have made it convenient for governments around the globe to demand electronic data as well as tax regimes. The tax regimes currently have technology tools at their service to deliver scanned transactions, documents, etc. Invoices that have been digitized by companies in the past are now audit targets. Tax authorities can enforce penalties if they find any lack in conformity by referring to the audits, dated years ago. The penalties can include high fines and probable shutdown of the company.

The cloud makes it convenient for the AP platforms to audit-proof the invoices and helps in going beyond the primary methods of tax-rate calculation and invoice organization. The cloud-based purchase systems can help in accessing a vast number of APIs to aid invoice approval, carry out tax checks, and adjust with the continually changing rules. Besides, it does not disturb the daily operations to perform. But there are fair chances of the cloud-driven solution to overlook the significance of the ERP integration in steering better internal efficiencies and prevention from noncompliance.

It is anticipated that organizations in the emerging industrialized economy might exchange more than 75 percent of e-invoices in the tax industry in real-time. Companies are now prioritizing tax compliance in their strategies and cloud-based solutions. The wide-ranging cloud-based apps are considered as the key for enterprises, functioning along with different trading parties beyond the borders.

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