Case Study #5: Use of Data Automation and RPA for Tax Functions (Grant Thornton)

Background

At Grant Thornton LLP, data automation is used for a variety of tax applications, such as estimating tax provisions, calculating sales tax, and reporting for state and federal income taxes, according to Christopher Spratt⁶, Senior Manager of the Tax Digital Consulting practice. “We assist companies in using data transformation tools to connect directly to the data that they need to use to drive various tax functions,” said Spratt.

Spratt recognizes that there are different perspectives on whether data automation and RPA constitute AL “Perhaps it’s open to interpretation as to what Al is, but 1 view artificial intelligence through the lens of ... automating data transformation, it’s being able to drive visualization and results based off of data and leveraging of a technology or software,” explained Spratt. “It’s the ability to automate a process that possibly is even replacing the keystroke levels in an individual.”

Spratt explained that one of the first use cases for deploying data automation was to assist a client with challenges with their monthly close. This company maintained a monthly tax provision, and they were having difficulty obtaining timely data from the accounting group to drive the tax calculations that were necessary to close out the month. Because there was not a universal chart of accounts or a companywide ERP system, “they were literally waiting on an individual in an office, in another state to be responsive and actually provide them with the financial data that they needed to start doing their tax calculations,” said Spratt. “Because this company had to do some hierarchy reporting to a parent company overseas, they had a six-day close period every month. So, by the sixth business day, everything had to be recorded ... they were not receiving good information until probably sometime during day five of the close, which wasn’t giving them much time.”

As a result, this company had to make estimates ahead of time and then quickly adjust those estimates to ensure the proper amounts were recorded in the accounting period. “Not terrible, but not ideal by any means,” said Spratt. By working collaboratively with the company’s IT team, “we helped them deploy a cloud-based data transformation tool,” explained Spratt.

Results

The data automation solution effectively reduced the number of days for the tax team to receive necessary information from five days to about one to two days. “We were able to work with them on the various ERP and data sources to drive a scheduled file drop starting on day one of the close,” said Spratt. “And there we set it up so that there was a scheduled data drop from their ERP systems, all of the disparate systems to one location with a standardized file name and we were able to schedule that to run automatically twice a day through their ERP configurations with IT. And then, we were able to implement the cloud-based data transformation tool to look to that file destination and pull in the data every time it reran or updated. So, by doing that, we were able to pull in all the disparate data that they had. Now the tax team had access to this in day one or day two of the close.”

Lessons Learned

For Spratt, obtaining valid data from the client is essential to a successful automation implementation. “I think the one lesson that I’ve always learned is to try and get to the source data and understand what is ultimately producing that data and what’s the quickest way to get to that data,” said Spratt. “And that stands true with RPA as well ... understanding specifically ... what is the keystroke level that needs to be deployed? Because if you don’t get to the starting point ... the proper starting point, I think that is what can drive inefficiency, and possibly increased risk in what it is that you’re looking to produce and automate.”

Finally, Spratt explained the importance of firm culture and employee attitude for successful RPA implementations. “Because at the end of the day, whether it’s somebody pressing start on an RPA solution or reviewing the reports that you're automating out of an analytics solution, it’s really the personal experience that 1 think we’re looking to improve. Whether it’s simplifying our structure or - in most cases, it’s being able to redeploy the staff to perform higher-value tasks for the organization or perform the tasks that they’re more interested in spending their time on versus spending their time on mundane tasks that they may be overqualified to do based on their education and their skillset.”