“I can calculate the decaying orbit of a dying moon to within one-tenth of an inch. Why can’t I calculate the subtotal of line 59A?” complained an alien imposter struggling with human taxes in ‘90s sitcom, 3rd Rock from The Sun.

It is a truth universally acknowledged that tax payments can be difficult to manage. As standards evolve over time and vary across borders, diligent organisations may scramble to keep up. However, automation promises to address this challenge.

Mark Wilfred, Head of Solutions Consulting (SEA), SAP Concur shares three ways in which automation can help government agencies proactively manage, rather than react to, expense matters.

Reclaim travel taxes

Companies forgo an estimated US$20 billion in unclaimed travel tax refunds yearly, according to Finance Monthly. Public agencies tend to steer away from the hassle of tax reclaims for expenses incurred on overseas trips, shares Wilfred. Many don’t have the resources to keep up with myriad and ever-changing regulations.

However, if managed properly, meticulously filing tax refunds can reduce overall spending and actually bring in revenue. “If you spend 10 million overseas, you can reclaim around 18 to 20%, which is a significant amount of money,” shares Wilfred.

AI and machine learning can do away with the hassle and maximise tax returns. These tools can eliminate human errors and automatically identify opportunities for tax refunds. These technologies also manage risk by ensuring that the system adheres to current tax regulations, regardless of the country an agency is spending in.

Manage travel spending

When Covid-19 first hit in 2020, Gonzaga University was able to use its automated travel expenses software to quickly inform and recall students traveling abroad, shares SAP Concur. This is one example of how automation can help organisations to flexibly respond to travel emergencies.

Automation can also help manage and control travel spending effortlessly. Public sectors may rely on cumbersome legacy systems that depend on manual input, frustrating employees, shares Wilfred. When finance teams rely on individuals to manually record their expenses, there is a higher risk of human error.

An automated system can smoothly adjust allowance rates depending on travel itineraries, accounting for both full and partial workdays. For instance, public servants may be entitled to a lower travel allowance rate if they arrive at their destination later in the day, explains Wilfred. When reliant on manual reporting, this may not be accounted for.

With a third party system, employees and finance teams no longer need to keep track of these unique situations. In fact, the system can manage every aspect of travel allowance, freeing up time and energy for finance teams to focus on other tasks.

For example, these systems can maintain separate travel allowance rates for different countries. This means the allowance available for employees will automatically change to comply with internal spending regulations.

Furthermore, agencies can also place spending caps to limit travel costs in advance and quickly approve further requests if and when they come in. A streamlined system creates a clear audit trail of the entire process whenever an employee requests further funds.

Review budget spending frequently

Finally, automation enables public agencies to more regularly review budget spending in realtime. Without automated systems, budget reviews are restricted to periodic reports, shares Wilfred.

When these reports are released, they tend to be accessible only to senior leaders of specific departments, with mid-level staff lacking access to these reports.. This lack of visibility may result in more complacent spending among staff or mid-level managers, he explains.

An automated system can immediately display spending as a percentage of budget, encouraging a proactive approach to budget management. When data on employee expenses can be viewed by all, it enables agencies to quickly adjust spending patterns in response.

When automated systems track purchases, this can make overall spending visible to everyone in a department. In fact, automation can even display spending on an individual level, notes Wilfred. This can encourage staff members to take more ownership of spending.

Managers can also track budget use with automated intelligence reports that the system generates. This meets the needs of most organisations. However, some organisations may have more complex needs or specific reporting requirements. They can engage our experts to build custom reports that can be viewed in the future, notes Wilfred.

These reports can also highlight instances of questionable spending. With AI technology, reports can immediately flag up possible cases of budget misuse or even fraudulent activities for review.

Not only can intelligent automation help the public sector meticulously track and reduce spending, but it can also even be a source of new funds. For government agencies running on tight budgets, automation may be key to transforming financial performance.