No matter what area of tax you work in, one thing has been inescapable over the past few years—the constant talk and promotion of process automation.  These buzzwords have steadily picked up momentum (and use cases) in recent years and now seem to be the focus of every webinar, conference, and consultant demo.  One caveat is often left out of these presentations, however,automation projects are only as effective as the underlying processes.  To maximize the time and cost savings realized through robotic process automation (RPA) and other new technologies, tax departments must ensure that they have consistent and repeatable processes in place for the tasks they intend to automate.

In nearly every tax department, processes have evolved over time on a user-by-user or as-needed basis.  This has generally happened because of changes in either tax law or department personnel, as well as the urgency of quarterly and annual tax deadlines.  The end products are difficult to replicate and are completed in a slightly different (yet still manual) manner during each reporting period. The cornerstone of current RPA tools, however, is that the steps taken must be documented and repeatable to maximize the benefits realized.  To successfully undertake any automation project, you must have these processes in place beforehand.

In advance of implementing any RPA tools, departments must work towards processes that are consistent and repeatable.  Tax professionals are often already working long hours and stretching themselves thin just to complete the existing work on their plate.  One way to alleviate this pain is for tax departments to have dedicated resources focused solely on technology and process improvement.  By allocating full-time team members to these tasks, departments make the resource investment necessary to achieve tangible improvement in processes and, subsequently, the technology implementations.

There are several improvements that any department can implement in relatively short order.  One is using consistent naming across platforms, whether in the general ledger, tax provision software, tax compliance software, or excel workbooks.  This will allow users (and later RPA software) to reliably retrieve and manipulate data across different programs by entity name, tax adjustment, location, or any other required information. Real world use cases of this idea include moving tax provision data into your compliance software and performing internal controls comparing tax amounts booked to the general ledger against provision supporting documents.

A second improvement is to ensure that workbooks encompass the necessary information for all users.  This will allow the entire department to use consistent templates for tax reporting, compliance, and most other processes.  Avoiding workarounds and format changes in this template will allow for repetitive processes to be completed by the user.  This helps avoid manual manipulation and adjustment to data, which is crucial for any process automation project.  Examples where this could be easily implemented include workbooks for compliance taxable income calculations and state apportionment.

RPA is certainly an exciting opportunity for tax departments today and in the future.  Despite the excitement and promise of automation, however, tax departments need to be sure to shore up their processes before turning attention to RPA.  Undertaking this initiative beforehand will save tax departments time by avoiding duplicative manual processes and money by ensuring that the RPA implementations go smoothly and produce the desired results.