See how optimization and AI can transform your indirect tax function. Connect with our tax technology experts to learn how we can help.
Written by: Molly Oesterling – Senior AI Engineer
Tax departments today face increasing pressure to do more with fewer resources while navigating constant regulatory changes and heightened audit scrutiny. Manual reconciliations, disparate systems, and repetitive tasks often consume valuable time, leading to inefficiencies, inaccurate tax determinations, and heightened compliance risks.
However, advancing technology and AI tools are providing tax teams with new opportunities to optimize their processes, improve accuracy, and shift their focus to other strategic priorities.
Why indirect tax Optimization Matters Now
Many organizations have already invested in automation, but without regular re-evaluation and optimization, gaps quickly emerge. Month-end reviews are often slowed by inconsistent data and manual adjustments, creating a cycle of inefficiency that frustrates teams and introduces unnecessary risk. Overpayments, underpayments, and inaccurate reporting can all result from outdated configurations or processes that no longer align with business objectives and goals.
By regularly stepping back to reassess systems, workflows, and data management strategies, companies can ensure that their automation investments deliver the intended value—reducing errors, strengthening compliance, and giving tax teams greater confidence in their reporting.
Technology-Enabled Enhancements
Optimization often begins with process refinement and system adjustments. Updating tax configurations and aligning them with business logic can immediately reduce inaccuracies, while automation technologies help minimize repetitive, manual tasks that slow down month-end work. Data wrangling and advanced analytics tools provide better visibility into transactions and enable tax professionals to address issues proactively rather than react after errors have already occurred. Centralized data warehousing ensures that detailed transactional information is always available, not only for streamlined month-end reporting but also for robust audit support. Together, these enhancements give tax teams the accuracy, efficiency, and transparency they need to keep pace with business demands.
The Role of TaxARC™
At the heart of DMA’s automation approach is TaxARC™, a web-based accrual analysis and data warehouse solution designed specifically for tax professionals. TaxARC™ simplifies the month-end process by automating accrual calculations and providing a centralized data repository on purchasing and sales activity. Its intuitive dashboards offer a clear view of tax activity and trends, while Object Character Recognition (OCR) capabilities pull key details directly from invoices to enhance accuracy and reduce manual intervention.
To enable fast deployment and reduce IT burden, TaxARC™ operates independently of client ERP systems. Key security features include:
- No direct ERP integration, minimizing system exposure
- Secure data transfer via credentialed SFTP
- Isolated architecture reduces attack surface
Uploaded data is accessible in the TaxARC™ UI for review, adjustment, and finalization. At close, users download a detailed adjustment report and manually upload it to the ERP, preserving system separation.
This setup ensures alignment with ERP GL balances while maintaining a secure, auditable, and efficient workflow. And, with the TaxARC™ cloud-based model, clients gain continuous access to the latest enhancements and functionality, delivered seamlessly and without disruption to existing workflows.
AI: The Next Frontier
Artificial intelligence (AI) is now expanding the frontier of possibilities in indirect tax automation. Optical Character Recognition (OCR) can convert raw invoices into structured, line level, tax-ready data, dramatically reducing manual entry. Large language models (LLMs) help make sense of cryptic invoice descriptions and assist with taxability research, providing faster, more accurate insights. Predictive machine learning models take automation a step further by classifying taxability with remarkable accuracy. By combining these AI-driven tools with proven institutional tax expertise, companies can transform their tax departments from reactive compliance centers into strategic drivers of efficiency and insight.
Why DMA
Optimizing indirect tax automation requires more than technology—it requires a partner that understands the intersection of tax, business operations, and emerging technologies. DMA brings deep expertise in indirect tax, proven success in automation and AI, and a commitment to delivering practical solutions that evolve with client needs. From streamlining processes and enhancing accuracy to implementing tools like TaxARC™ and AI-powered models, DMA helps companies maximize the return on their automation investments while ensuring their tax functions are prepared for the future.
Smarter Indirect Tax Starts Here
| This website content should be used for general informational purposes only, and not as a substitute for consultation with professional tax, legal, or other competent advisors. Before making any decision or taking any action based upon information contained on this website, you should consult with a DMA professional. |