How can we use the Blockchain technology to calculate and manage taxes for our customers? Avalara, the well-known taxation management, and automation software company is thinking along these lines.
Like many other sectors, the taxation and compliance sections of businesses can take advantage of the blockchain technology to not only maintain proper records but also for real-time execution and automation of the whole process flow. These features will be invaluable to a company like Avalara which handles over 20000 companies across the world.
It is compulsory to file taxes, but it is not an easy task to many people. Thanks to the governments, who make the whole process complicated. When individuals can’t help but feel that their personal tax filing process is a bit too complicated for them to handle, think about big companies and corporations with long balance sheets. This has paved the way for companies like Avalara, who take care of most of the process through pre-programmed software applications that keep an account of all the revenues and expenditure. These software comes with services attached, where people are assigned to do certain operations to enable them to churn out the right numbers.
When there are numerous transactions happening each day, the comprehensive accounting information can only be obtained at certain frequencies (say, once every week, month, quarter or a year). But, by implementing blockchain technology-based solutions, the whole process can be done in real time instead of waiting until the end of the month or year to process the transactions.
Blockchain technology, originally created to record and confirm all the transactions happening over the Bitcoin network. The security and immutability associated with the blockchain technology make it ideal to store sensitive information. In addition to these features, transparency of the distributed ledger can also be controlled to ensure that only specific people have access to certain entries on it. That’s not all, it will also allow real-time access so that the entries into the company’s accounts made by anyone can be processed by tax automation software like Avalara as and when it happens. The entries don’t have to be confined to just fund transfers, it can also include asset transfers, real estate etc. The company can check the status of their tax account on the software at any time to get up-to-date information.
The adoption of blockchain technology by Avalara and its advantages was presented by the CEO of the company, Scott McFarlane at the Avalara’s Crush New Orleans Conference earlier this week. He was quoted saying –
“We live this life, a dual life… We’re one of the fastest-growing software companies out there, and we’re really pretty damned good doing sales tax and transactional tax along the way.”
Adoption of blockchain technology is part of the company’s ‘Mission to Mars’ manifesto which chalks out the plan for Avalara over the next five years. The 12-year company has a lot of big names as its customers and by using the blockchain technology, the company will be able to provide world-class service to them.
We can soon expect the digital currency technology to be included in various software solutions, just like the way Avalara is doing now.
Ref: Accounting Today Image: NewsBTC