In today’s dynamic business landscape, the use of emerging technologies has made business processes simpler. Life has become easier for accountants as they are able to automate routine tasks and focus on strategic business challenges. Digital tools can be used to automate accounting processes like expense management, processing of invoices, customer queries, supplier onboarding etc. Some of the emerging technologies that can facilitate accounting processes include Blockchain technology, Artificial Intelligence, Machine Learning and Cloud Computing.
Blockchain is a shared ledger that helps in the process of recording transactions and tracking them in a business network. Once the transaction is recorded and verified, it is irreversible. This provides 100% data integrity and authentic real-time information can be accessed easily. This is especially useful for accounting and auditing as it leaves behind a clear trail of initiation, processing, authorization, recording and reporting of transactions.
Artificial Intelligence is used to facilitate the automation of accounts, analysis of data and problem-solving by sifting through humongous amounts of data rapidly.Machine learning is used to automate accounts payable and risk assessments. Artificial Intelligence chatbots are used to address customer queries. AI and ML are used to interpret large amounts of data and arrive at interpretations that can be used to make smarter decisions.
Cloud-based accounting has eliminated the constraints of time and distance. Now accountants can work remotely, collaborate with clients and work more efficiently by accessing real-time information from the same source. Moreover, there is no compromise on data integrity and security.
The use of technology is not limited to accounting. It is also being extended to meet tax compliances including GST. The government has made the GST administration completely digital from the stage of applying for GST registration to the filing of GST returns. There is a high level of technology applied by tax authorities to GST administration. They use data analytics to compare humongous amounts of data across the GST filings of buyers and sellers. Companies are also finding it necessary to use technology to manage their tax function efficiently and minimise risks of inaccurate reporting.
Most entities spend significant time and effort to collate data from multiple systems for tax compliance and reconciliations. If tax reconciliations are automated within or outside the ERP system, it will simplify the task and expedite the process. Data Analytics allow the correct interpretation of tax data and help to identify gaps, inconsistencies and leakages at a transactional level which can be used to improve the tax process.
Adoption of technology can assist in the 26AS reconciliation for TDS and Tax Collected at Source. This can help with quick tracking of tax leakages due to incorrect TDS/TCS entries by customers/suppliers. Enterprises spend a lot of time on tax-related manual actions. Process automation software can cut down the time taken for such tasks tremendously. These bots can work through piles of data and complete high-volume manual actions in minutes. This can reduce labour and save considerable overhead costs while allowing adherence to deadlines which is essential for tax compliance.
If enterprises are not keen to invest and maintain technology for tax services, they can choose to outsource the same to professional service providers . This works out cheaper while ensuring the completion of time-bound tasks effectively and efficiently. It is essential to focus on improving accuracy and simplifying processes as a whole to ensure that tax compliances are prompt as well as accurate.
In today’s fast-paced environment where time is of the essence, it is prudent to adopt technology wherever feasible to automate routine tasks and focus on more value-added activities that can contribute to better business outcomes. There are several professional service providers who can provide all these services remotely so that small growing enterprises that cannot afford a full-fledged accounting function can benefit from the same.
(The author is Mr. CA Jitendra Jain, Director, Tapanshi Finanziell Pvt Ltd, and the views expressed in this article are his own)