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Tax Tech

Innovations in accounting software help businesses streamline financial processes. Caryn Gootkin finds out how these changes help finance professionals.

COVID-19 lockdown brought technology into the limelight as finance teams had to pay salaries, and make and receive other payments remotely. “Often, this happened from home and not the office, which meant businesses had to ensure key personnel had constant stable home internet access,” says David King, finance director at CGI Creative Graphics International. “It was important for me to be able to communicate effectively with my team, which meant video-conferencing platforms like Zoom became crucial, especially features like shared screens, which allowed me to share content, demonstrate instructions and give the necessary direction.”

Optical character recognition (OCR) is another technological innovation businesses are incorporating. “We currently use OCR to convert PDF documents to Word for editing or content sharing,” says King. “We are moving towards incorporating it into other elements of our work to achieve the ‘planet’ element of the triple bottom line with reduced paper usage and storage. We look forward to the day it is integrated into accounting software to reduce the chances of human error.”

At a distance

When a finance team falls behind, it has dire consequences for the business. “Having remote access into our accounting software during lockdown enabled us to keep records up to date and reforecast for the remainder of the year,” says King. “But make no mistake, this technology does not come without challenges, as server and other IT issues can cause instability and downtime. To overcome these issues, many professionals have turned to cloud-based accounting programmes, which allow finance professionals to access financial information during these turbulent times, even from tablets and phones. This is not always possible with traditional software.” 

Lockdown also affected annual audits, as large audit teams can no longer work from clients’ premises due to social-distancing requirements. “Company staff and audit teamwork is now conducted on video-conferencing platforms,” says King. “Secure web portals allow for the sharing of confidential documents between clients and auditors. Email is not considered secure for this purpose. Using this technology, auditors can complete audits largely virtually, saving on expenses like travel.”

SARS auto assessments

SARS collects data (from medical aids, banks, insurance companies and similar institutions) and uses this to pre-populate tax returns. “When a taxpayer logs in to file a return, the information is already there, so they simply fill in the missing components, submit and receive an assessment,” explains Mark Silberman, director at Accfin Solutions. “Taxpayers receive an SMS from SARS inviting them to log in and accept the auto assessment. If they accept, there is nothing further to do, as they are assessed. If they dispute it, they simply do not accept the auto assessment. They can then download their return, complete it and submit it to be assessed in the normal way.” 

The assessments are based on the normal calculation rates for that taxpayer’s income and are most suited to lower income earners with simple tax returns. “One downside to the auto assessments is that taxpayers cannot claim out-of-pocket expenses and car allowances this way,” says Silberman. “But the concept is a good one, and does not affect any taxpayer detrimentally as they have the option to complete the return normally. The system does need to be fine-tuned to ensure that the correct taxpayers receive auto assessments; this should happen in the next year.”

 AI forecasting 

“In volatile times, the financial budget quickly ceases to be a meaningful basis to plan the business, to measure performance or to exercise management control,” says Catherine Stretton, a director at Deloitte Africa. “The introduction of artificial intelligence to prepare fully automated, dynamic rolling financial forecasts and scenarios helps to maintain a realistic benchmark for planning and management control.”

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