Embracing AI and closed-loop automation for tax exemption certificate management

Imagine a world where mastering taxes becomes your company’s secret weapon for boosting total revenue. As businesses aim for greater efficiency and accuracy, artificial intelligence (AI) is a game-changer in handling exemption certificates. Thomson Reuters and CERTifyTax are leading this change by providing an automated solution that simplifies exemption certificate management (ECM), elevates the entire tax function, and positively impacts the bottom line.

In a recent webinar, industry experts Ray Diaz, J.D., Chief Operating Officer at CERTIfyTax; Tom McCarthy, J.D., Chief Executive Officer at CERTifyTax; and Troy Fischnaller, Senior Solution Consultant at Thomson Reuters, brought nearly 60 years of combined experience to the table. They demonstrated how AI is helping tax professionals overcome common ECM challenges. Let’s dive into their insights and discover how your enterprise can harness these advancements to enhance its tax operations.

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Understanding exemption certificate management

Diaz explained that ECM has traditionally been a manual, error-prone process. Companies often struggle to keep certificates organized, ensure compliance with state regulations, and verify their accuracy. Tax departments have typically dealt with ECM reactively, addressing issues only during audits. Securing the right exemption certificates is crucial because it can affect profits and lead to costly assessments after an audit.

CERTifyTax’s AI-driven solution uses AI to ingest and analyze existing certificates, identifying potential risks and liabilities. This proactive approach helps you stay compliant and gives tax departments the tools they need to reduce risks and optimize their operations.

The power of artificial intelligence in ECM

McCarthy highlighted that AI is a transformative breakthrough in automating the ECM process. By analyzing exemption certificates against a comprehensive rule set, CERTifyTax solution ensures every document is complete, valid, and compliant with state regulations. This automation eliminates the need for manual review, freeing up tax professionals to focus on more strategic tasks. CERTifyTax not only collects exemption certificates but also makes sure they are complete and accurate, reducing unnecessary sales tax exposure.

The integration of AI also improves the accuracy of tax determinations. By validating government-issued numbers on certificates and ensuring that exemptions are applied correctly, the system minimizes the risk of audit exposure. This level of precision is a huge win for companies looking to reduce their tax liabilities and improve their financial performance.

Seamless integration with ONESOURCE

Fischnaller emphasized that one of the standout features of CERTifyTax’s solution is its seamless integration with the Thomson Reuters ONESOURCE platform. This closed-loop automation means that exemption certificates are automatically validated and applied within the tax engine, simplifying the entire tax determination process. This is especially important for managing the complexity of sales tax compliance across various jurisdictions, where rules and rates can vary by state, county, city, and special districts.

For companies using multiple ERP systems, this integration provides a unified approach to ECM. By connecting CERTifyTax with ONESOURCE, businesses can ensure consistency and accuracy in their tax determinations across all platforms.

Real-world impact: An ECM case study

The webinar featured a case study presented by Diaz of a company with $4 billion in annual sales that implemented CERTifyTax solution. The initial analysis revealed that 60% of their exemption certificates were invalid, which was a big audit risk. By using the AI solution to automate the review and validation process, the company was able to reduce its potential liability by 53% within a month.

This case study really shows the tangible benefits of adopting an AI-driven ECM solution. Having the ability to identify and address potential liabilities before they become audit issues gives tax departments a major advantage.

Enhancing customer experience

Beyond compliance and risk management, CERTifyTax also improves the customer experience, as explained by Fischnaller. By automating the certificate submission process and integrating it seamlessly into e-commerce platforms, businesses can ensure that their customers enjoy a smooth, hassle-free transaction experience. This customer-centric approach not only boosts satisfaction but also supports business growth by making it easier to close sales. CERTifyTax’s ability to customize and adapt to specific business needs further solidifies its role as a comprehensive solution for managing sales tax exposure.

The system’s flexibility is another big plus, as Diaz noted, allowing for customization and enabling businesses to tailor the exemption certificate process to fit their specific needs. Whether it’s embedding the solution into an existing website or using it as a standalone tool, CERTifyTax provides the adaptability that modern businesses require.

Looking ahead: The future of ECM

As the tax space continues to evolve, the need for innovative solutions like CERTifyTax becomes increasingly clear. Integrating AI and automation into ECM processes is a significant step forward in tax management, giving businesses a strategic edge in today’s competitive environment. Developed by tax attorneys with extensive experience, CERTifyTax’s comprehensive approach ensures that businesses can effectively address the financial impacts of non-compliance.

As you think of the next steps for your organization’s tax management strategy, explore the capabilities of CERTifyTax in partnership with Thomson Reuters. Discover how this innovative solution can transform your ECM and enhance your overall tax function.

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Using AI to Transform Tax Automation for ECM

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