Data analytics technology has had a profound impact on the state of the financial industry. A growing number of financial institutions are using analytics tools to make better investing decisions and insurers are using analytics technology to improve their underwriting processes.
However, there is an area that is being shaped by analytics technology that has not gotten as much attention – tax compliance. Deloitte discussed this new trend in a report titled “Tax data analytics A new era for tax planning and compliance.”
Small businesses need to understand the role that data analytics plays in assisting with tax compliance. They will need to know how to use analytics tools to better meet tax compliance requirements.
Ways Data Analytics is Changing the Nature of Tax Compliance for Small Businesses
Tax compliance is an integral part of running a successful business. It’s challenging to stay on top of constantly changing tax policies, but it’s essential to keep your business compliant and avoid potential penalties or other consequences from non-compliance.
The good news is that staying compliant is easier than ever in an age where data analytics tools can help you manage your finances. This post will discuss five tips that will help ensure that your organization use analytics technology to meet all government regulations regarding taxes.
Big Data Tools Make it Easier to Keep Records
Newer tax management tools use sophisticated data analytics technology to help with tax compliance. tools. According to a poll by Dbriefs, 32% of businesses feel data quality issues are the biggest obstacle to successfully using analytics to address tax compliance concerns. Fortunately, new software better stores data on transactions, which makes analytics-driven tax compliance easier.
Keeping track of all financial transactions, including receipts and invoices for goods and services that your business has purchased or sold, is essential. This will make it much easier when it comes time to file taxes, as you’ll have an organized and detailed list of your expenses.
Having everything on record will also make it easier to spot any discrepancies or errors that could lead to an audit. For streamlined record keeping, you can take advantage of accounting software such as QuickBooks or Freshbooks, designed to make tracking and to organize your finances more manageable. These applications have a number of analytics tools that can help you store information about your transactions more easily.
Use Data Mining Tools to Uncover Generous Tax Credits and Deductions
Taking advantage of any available tax credits or deductions when filing taxes is always a good idea, as these benefits can help reduce your overall tax liability. There are many different types of credits and deductions available depending on your business and industry, so it’s essential to review all available options. Your accountant or tax professional can advise on which credits and deductions would benefit your business.
This is one of the areas where data mining technology can come in handy. A number of web scraper tools such as Octoparse and Parsehub use data mining algorithms to scrape data from various websites. However, more advanced tools use AI to mine data from sites the user may not have thought to look for. These tools allow companies to enter keywords about the types of tax credits that they are looking for. This is one of the ways that AI can automate tax compliance.
Hire a Professional Accountant that Knows How to Leverage Analytics Properly
It’s always a good idea to hire an accountant or tax professional to help ensure that your filings are done correctly and on time. A qualified business accountant like those from atlantabusinessaccountants.com can provide valuable advice on preparing, filing, and paying taxes efficiently. You can also ask an accountant for help with any additional tax-related tasks, such as filing information returns or claiming deductions.
They can also help you detect any potential issues before they become a problem and guide how to optimize deductions and credits so that your business pays the least tax possible. If you’re starting, they can also be an excellent resource for learning about the tax rules and regulations that apply to your business.
It is a good idea to make sure that your accountant is tech-savvy. They will have an understanding of the different analytics tools that can help streamline tax planning and ensure their clients are compliant.
There Are Still Some Challenges Analytics Can’t Help with
Data analytics technology can address a number of tax compliance issues. However, there are still some issues that it can’t solve yet. You still need to be proactive about dealing with tax problems, which involves taking the following steps.
Follow Tax Deadlines
Tax deadlines can be easy to overlook if you’re busy managing other aspects of your business, but they are essential to staying compliant with tax laws. Missing a filing deadline can lead to hefty penalties, so it’s important to know when all income and other taxes need to be paid.
You can find information on tax seasons in your state or country’s tax laws and on the websites of relevant government agencies. It would be best if you also kept an eye out for changes to tax policies throughout the year to stay updated with the latest requirements.
Stay Up to Date With Tax Laws
Tax laws are constantly changing, so it’s important to keep up with any new regulations or changes that may affect your business. Checking in regularly with the relevant government agencies and taxation experts is vital for staying updated on the tax news and ensuring compliance.
You can also subscribe to newsletters or blogs that update tax laws and check in regularly with your accountant. Keeping up with changes in the law will help you ensure that your business remains compliant and minimize the risk of any potential penalties or audits.
Tax compliance is necessary for any business, so staying informed and up-to-date on the latest rules and regulations is essential. From keeping accurate record keeping to taking advantage of available deductions and credits, there are many strategies that you can use to ensure your business remains compliant with all tax laws. With proper planning and guidance from a qualified accountant, you can ensure that your taxes are filed correctly and on time.
Analytics is Driving a Number of Changes for Tax Compliance
As this post from CPA Journal reports, analytics technology is significantly changing the state of tax compliance. You may want to learn how to use analytics tools to better comply with your tax obligations.