5 RPA Use Cases in Finance - Revolutionizing Taxation with RPA
Robotic Process Automation (RPA) has evolved as a game-changing technology, capable of automating repetitive and rule-based processes in a variety of industries. RPA has recently gained popularity in the taxation division to automate every conceivable task.
The article highlights five potential applications of Robotic Process Automation (RPA) in the taxation department. The first application is the extraction of Movement in Receipt Out (MIRO) invoices from SAP to track vendor invoices and provide key tax-related information. The second is to generate and check E-invoices and E-way bills required for the movements of goods in India's Goods and Services Tax system. The third application is to calculate the projected GST payable for the month ahead, allowing for informed decisions on cash flow management, budgeting, and tax planning. The fourth application is to automate tasks in Stock Transfer Order (STO) and Stock in Transit (SIT) processes, including tax computations, reconciliation, and reporting, to improve supply chain efficiency and tax compliance. Lastly, RPA can automate report compilations for tax audits, reducing manual labour and the potential for errors. Overall, RPA can increase efficiency, accuracy, and compliance in the taxation department, resulting in cost savings for organizations dealing with complex tax legislation.
Movement In Receipt Out (MIRO) invoice extraction.
The first use case of RPA in Taxation is the Extraction of MIRO invoices from SAP.
The vendor invoices are entered in the accounts payable module using the MIRO transaction code. Organizations can track vendor invoices, match purchase orders and goods receipts, and confirm that the invoice matches the items or services received, and the amount invoiced matches the amount expected, by using MIRO documents, also known as vendor invoices.
When it comes to tax calculations and reporting, the MIRO documents provide key tax-related information, such as VAT or sales tax, which is essential for dealing with tax legislation. These records are used by the taxation department to verify the correctness of tax estimates and to make sure that tax laws are being followed. A thorough audit trail of vendor invoices, approvals, and payments is also provided by MIRO documents, which can be utilized to support audit efforts.
Downloading MIRO documents/invoices - It is not difficult to download and organize a few invoices that are created occasionally. However, obtaining and organizing these invoices can be a time-consuming operation for a large organization that receives numerous invoices each day. RPA may be used in this situation to download the invoices every day, sort them, and store them in a systematic location so that they can be efficiently utilized for tax audits in the long run.
E-Invoice & E-way bill generation checking
E-way bills and E-invoices are two essential components of India's Goods and Services Tax (GST) system for the majority of FMCG (Fast-Moving Consumer Goods) firms.
E-invoices are generated and uploaded to the IRP (Invoice Registration Portal) for validation using the unique IRN (Invoice Reference Number). An e-way bill is also required for the movement of goods worth more than INR 50,000 within India. In this scenario, the organization's taxation department processes multiple e-invoices, IRNs, and e-way bills daily.
RPA can play a significant role in determining whether e-invoices and e-way bills are generated for a specific movement. The difference between IRN and e-way bills for movements above INR 50,000 must be examined and reported. SAP records all the movements. Using RPA, all information connected to e-way bills and e-invoices can be retrieved from SAP and thoroughly reviewed for inaccuracies. As a result, a report with complete details of the movements with valid e-invoices, invalid e-invoices, and movements with no e-way bills can be prepared. The taxation team can then use this information to fill in any gaps.
GST Payable calculations (India)
The third application of RPA in taxation is calculating the monthly expected GST payment. In the Indian market, large organizations with a high volume of sales and transactions potentially result in significant amounts of GST payable.
Calculating the projected GST payable for the month ahead ensures that the firm has the finances to pay GST liability on time. It is critical to have an accurate estimate of the GST payable for the month ahead as it depicts the organization's tax liabilities in detail and can be used to make informed decisions about cash flow management, budgeting, and tax planning.
The GST estimation requires numerous formulas, calculations, and hours of work. In this instance, RPA can be used because it can automate repetitive, rule-based operations involved in the tax calculation process, saving time, and reducing errors. To maintain compliance with tax legislation, tax calculations require exact and accurate data. These operations can be automated with RPA, allowing tax experts to focus on more complicated jobs and strategic analyses.
Stock Transfer Order (STO) reconciliation
Stock Transport Orders (STO) and Stock in Transit (SIT) are critical supply chain management operations that involve the transportation of items from one location to another. These processes must adhere to the applicable tax laws and regulations, including GST (Goods and Services Tax) and other indirect taxes, to be tax compliant. Noncompliance can result in penalties, interest charges, and legal proceedings.
Businesses can utilize RPA to automate jobs in STO and SIT processes including tax computations, reconciliation, and reporting. Overall, using RPA to automate STO and SIT tasks can help businesses achieve tax compliance, improve supply chain efficiency, and save money while reducing manual labour and inefficiencies.
Report compilations helpful for tax audits
Tax audits require the submission of many reports to the tax authorities for verification and compliance. In India particularly, GST returns, GST audit reports, reconciliation statements, income tax returns, and many others are all crucial reports.
Typically, gathering these data requires manual labour, since someone in the taxation department must log in to various systems, download reports, and then compile them into a single document. This procedure can be time-consuming and error prone.
In this scenario, RPA can automate the process by automatically logging into the various systems, downloading the reports, and compiling them into a single document.
The RPA bot can be set to run at a certain time or triggered by an event, such as the conclusion of a financial quarter. This guarantees that reports are collected on time and accurately. Furthermore, RPA can be configured to check the accuracy of gathered reports by comparing them to a set of predetermined rules. This can help guarantee that the reports are correct and free of mistakes or inconsistencies that could lead to audit difficulties.
Conclusion
The implementation of RPA in the taxation department can increase the efficiency and accuracy of tax-related jobs dramatically. Overall, using RPA in the taxes department can result in cost savings, increased accuracy, and compliance, making it a beneficial tool for organizations dealing with tricky tax legislation.