Harnessing AI's potential: Transforming digital tax workflows for the modern era

Acquiring & organizing documents 

In the early stages of automation, the primary focus was on digitizing paper documents. This involved scanning physical documents and converting them into digital formats. However, firms quickly realized that simply digitizing documents was not enough to achieve optimal efficiency. 

Document processing was one of the first widely accepted uses for automation in tax workflows. In addition to digitizing paper-based source documents, firms began to streamline processes with rule-based document routing and classification. For example, CCH Axcess™ Document will automatically assign default metadata to documents based on class and subclass.

Today, scanning has evolved beyond simple document imaging. Advances in scanning technology have transformed the way documents are processed in tax workflows. Smart scanning solutions now employ computer vision algorithms to analyze documents and identify crucial characteristics. This enables the extraction of key data, going beyond simple digitization.

CCH® ProSystem fx® Scan, for example, identifies and groups related pages of multi-page documents. It can then flow that information into a tax return. This intelligent grouping allows for seamless integration of the extracted information into a tax return, eliminating the need for manual data entry and reducing the chances of errors.

Inputting and working with data

Automation has also transformed the way data is inputted and manipulated in tax workflows. Once tax data is digitized and identified, the focus shifts towards seamlessly transferring that data into the tax return. 

Using APIs, some software providers enable data automation between disparate systems. Firms can simply map data from one solution into the tax return to achieve basic data ingestion. Using CCH Axcess™ APIs with Microsoft Excel, CCH Axcess™ Tax users can automatically import data like K-1 activity from a spreadsheet into the tax return. This integration streamlines the data input process, saving time and reducing the risk of manual errors.

However, more advanced technology has emerged to further enhance data ingestion. Machine learning algorithms have been employed to augment rule-based data mapping. CCH Axcess™ Engagement Essentials, for example, uses learned tax grouping patterns to automatically match customer-specific tax groupings for entries in imported trial balance sheets. This intelligent application of machine learning ensures that the data is accurately categorized, reducing the need for manual intervention and improving overall data accuracy.

The effectiveness of these advanced technologies has not gone unnoticed, as CCH Axcess Engagement solutions were recognized in 2022 and 2023 with Artificial Excellence Awards for Machine Learning. These accolades highlight the significant impact of machine learning in enhancing data mapping processes and leveraging advanced technologies for data manipulation in tax workflows.

Gain deeper insights with actionable intelligence

When every minute counts, AI-enabled tax software reduces disruptions by offering information when and where it’s needed. CCH Axcess Tax brings real-time guidance into the tax workflow process. A virtual support representative answers commonly asked questions using natural language. More than a simple chatbot, the virtual support agent provides expert answers from the extensive knowledge base, and it is accessible from nearly anywhere in the software.

The CCH Axcess Tax 1040 Return Dashboard is another AI-enabled feature that helps firms augment their tax workflows. It incorporates predictive intelligence to identify client service opportunities, with complexity scoring to inform the decision-making process. Relevant CCH Axcess™ iQ events provide insight into areas that need extra attention and identify opportunities for more value-added client service. In addition, clickable complexity scores enable preparers to dive deeper into complex issues.

Tax research used to involve searching through pages and pages of journals, binders and reference books. Digitization improved the process by offering more comprehensive searching, including federated, 360-degree search across multiple sources of information. 

Now, GenAI has the potential to further support tax research and compliance work. For example, CCH® AnswerConnect can provide trusted answers with powerful AI-enabled search functionality. Natural language “Ask a Question” search and AI-augmented results in addition to CCH Editorial curation help staff find answers in less time. As the technology matures, firms will use GenAI-powered research tools to summarize research and offer tax strategies in plain language that clients can understand.

Looking to the future

There are exciting prospects on the AI horizon that will further enhance efficiency and accuracy for tax professionals. In the context of tax compliance, GenAI can be utilized to automate complex decision-making processes, provide real-time guidance on tax regulations, and offer predictive recommendations to save time and mitigate risk. By harnessing the power of AI, tax compliance software will be able to handle intricate scenarios with ease, reducing the burden on tax professionals and ensuring compliance with ever-changing tax laws.

In summary, technologies that might have been considered visionary ten years ago are now considered everyday standard features and functionality today. As AI and machine learning technologies evolve, it’s important for firms to embrace these technologies to stay on the leading edge of innovation and efficiency.