RPA Use Case: Lessening the State Sales Tax Filing Burden

RPA Use Case: Lessening the State Sales Tax Filing Burden

By Joe Labbé on January 31, 2020

The only guarantees in life are death and taxes. While robots can’t do a whole lot about death (though robotic surgeons may beg to differ), RPA can ease the burden of that other life guarantee. Sorry folks, you still must come up with the cash to pay your taxes. However, RPA can take some of the sting out by helping to file those taxes. Here’s a great use case of how one of our clients uses KnowledgeLake RPA to lessen the burden.

We have a client who specializes in providing tax and audit services to franchising organizations. One of the challenges our client has is preparing and filing monthly sales and use taxes for each franchise location within each state of operation. Think about that challenge. Each month, our client must collect operational financial data from hundreds of small businesses, analyze it, generate individual reports for each location, generate consolidated reports for the franchiser, and then file sales taxes with each state where a given franchisee conducts business. To complicate matters, each state has its own regulations, filing periods, and methods. To call this a herculean effort is a gross understatement.

Recognizing the repetitive and time-consuming nature of the subprocesses involved, our client elected to use RPA to gather and consolidate the data, generate monthly reports and file state sales taxes. This automation includes performing the following steps:

  • Downloading a QuickBooks .QBW file from each business location via RDP or VPN
  • Running memorized reports and exporting the data to a series of spreadsheets where the data is analyzed, and the sales taxes calculated
  • Filing the calculated sales tax for each franchisee within each applicable state
  • Capturing the onscreen receipt of filing and sending a notification of filing to all interested parties
  • Updating the analysis spreadsheets with the filing dates

The benefits of RPA automation were immediately obvious to all. For starters, after RPA was implemented, accountants were no longer responsible for performing the mind-numbing task of downloading and marshaling data into spreadsheets. Their role in the new process starts when they receive a notification that the spreadsheet for their location client is ready for review. On average, data collection and marshaling accounted for 60% of the processing time required to prepare each location’s sales taxes. That work has now been ported off to the bots thus freeing up the accountants to perform other tasks that are much more valuable to the firm.

But we’re not done. After the taxes are cleared for filing, under the old system, each spreadsheet was forwarded to a tax filing clerk who would then manually enter the sales tax data into the appropriate state filing website and send a receipt of filing back to all interested parties. This process too has been ported to RPA bots. Now, once a spreadsheet is cleared, the accountant saves the document to the firm’s document repository and flags it as “ready for state filing”. Once there, a bot picks up the document and performs the following:

  • Extracts the filing data from the spreadsheet
  • Enters the filing data into the appropriate state filing website
  • Takes a screenshot of the filing receipt and saves it to a file
  • Updates the original spreadsheet with the filing date
  • Saves both documents back to the document repository

Not only is the process significantly faster, but the error and exception rate has also been cut by 80%.

Originally, the RPA bot also generated the filing notifications. However, since the list of notification parties already resided within the document repository, it made more sense to have that system generate the notifications since it has a mechanism that allows users to subscribe to notifications of document status changes. This is a great example where the client had the discipline to let each system handle the tasks it is best equipped to handle and creating a clear separation of concerns.

So, there you have it. Sales tax filing made easy through the power of RPA. If you’d like to learn more about this solution or how RPA can help your business become more efficient, reach out to us. In the meantime, we’ll see what we can do about getting RPA to help with that other life guarantee.

About KnowledgeLake:

KnowledgeLake provides content management solutions that help busy organizations intelligently automate their most important document processes. Since 1999, we've created award-winning, Microsoft-centric solutions that have helped thousands of companies around the world focus on their mission rather than their mission-critical documents.


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