How Robots and A.I. Are Revolutionizing the Tax Season

Tax season has arrived again and everyone is working crazy hours to fulfil their obligations. However, this season brings a refreshing and long-awaited wave of innovations that aim to put an end to the pain of repetitive manual data entry for good: artificial intelligence bots.

Yes, most people will read this and think “It was about time, eh?”, but for those who are a little bit more familiar with the tax environment it’s fair to say that this can be a game-changer. A.I. can bring dramatic impacts to a wide range of industries, and its effects have already begun for a considerable number of small businesses, CPA practices, and bookkeeping practices worldwide; even the White House is a big supporter of the cause.

So this is how it works: most commonly, A.I. is being brought to the tax scene in the form of automated data entry bots, which allow people to enter data from receipts and bills using their smartphone cameras. This means that information like vendor name, transaction date, transaction amount, and even tax amount will be automatically converted into digital data input in each respective field. All people have to do is review their input and approve it. Ideally, this should be a seamless process saving time and money for all parties involved. No more shoeboxes full of receipts; no more hours spent doing boring and repetitive tasks – now it’s time for making things simpler.

This means that tax professionals, business owners, freelancers, not-for-profits, and all sorts of taxpayers will be able to focus their energy on tasks that bring the most value to clients and businesses. This way, the workers don’t waste hours on tasks that demand little to no strategical skills. Some companies have already taken a step further by doing some extensive studies; they’ve concluded that automated data entry tools can save businesses an average of 4.54 hours every week. This may not seem like a lot at first glance, but it adds up to a huge sum of almost 235 hours in one year alone.

Also, despite being a new trend, these tools have already met an accuracy level high enough to mirror human precision. The numbers are not yet perfect (and probably never will be due to the countless shapes and formats of receipt’s designs), but they are solid enough to deliver a flawless outcome in 19 out of 20 inputs – that’s a 95% accuracy rate coming from a bot reading 20 documents – not too bad at all considering that these tools use machine learning technology and will continuously improve after each transaction.

The best way to benefit from such A.I. tools and streamline productivity is by using them inside their own accounting software. By doing this, it’s possible to automatically enter data from receipts and bills while syncing the information with all other financial transactions in their business. They may sync the information with financial reports, monthly expenses, or with bank reconciliation. Some accounting software have even built automated data entry tools in their core engine, such as SlickPie, a free online accounting software provider that’s offering its MagicBot A.I. tool for no cost during the tax season.

These innovations were designed to improve the way accounting and bookkeeping tasks are done, and they came to stay. Taxpayers will definitely still need tax professionals to assist them in countless ways both during the tax season and throughout the year since A.I. won’t replace tax professionals; it’ll only help them deliver even more value with their work. Even Bill Gates seems to think that these A.I. robots will be good for society; he even suggests governments should tax them like regular taxpayers.

Artificial intelligence is a fairly popular topic on many blogs and news sources out there. It’s a safe assumption to say that everyone with an internet connection has at least heard of the term by now, but that’s a far cry from claiming that the multiple and versatile uses of this technology is well-established in people’s minds. Using automation to change the way businesses do their taxes has been something close to dream for many, but now it’s a welcoming reality that promises a better and more efficient new era of automated data input.

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Yohan Varella is vice president of SlickPie, which provides easy-to-use online accounting tools for small businesses.