Automating Tax using Google Cloud Platform, (it really can be done!) (Cloud Next '19)
My. Name is Brady, diva I'm a partner in our PwC. Practice in Australia, I've, got a colleague here who's going to be co-presenting with me today at, News to the directory, now PwC. Australia practice. Um. We're. Really excited today to, be. Given this opportunity to, talk to you all and present, here. At the Google next conference, about. A solution that, was. Really spawned off of. The same conference nine months ago where, we like, you guys were sitting Peter we see were you, know ed and I'm particularly were very lucky and fortunate to have an invite to. This same conference and we're sitting in the audience looking. At a couple of solutions. Platform. Don JCP, and using some of the ml and OCR technologies. That. Google has for. Some accounting, problems. Olds and we're, sitting there as tacks, guys thinking, gee how. Good would that be if we could take it a slight, step further and start to solve. On top of the accounting, fix some. Of the bugbears that we see in our day to day lives as advisors and also some of our clients from, a tax calculation. And classification. Perspective. In systems. And. So, that was really where we started so we started as a as an, idea as a thought bubble nine months ago in July literally. The next day we're lucky enough to have some. Of our Google partners. Catch. Up with us and we were able to then sit down and walk through some of the ideas and we were really really fortunate that Google, kind of bought in really really early into this opportunity. And. So, a very very short, but, intense. Journey kind of started, in July last year to get us to where we are today, so. Really really excited to be able to show you where we've got to so. What we're going to do today is. Just. Spend, a few moments if, okay around the business problem that this technology is aiming to solve. Conscious. Given that we're in the United States the, use case that we're talking about here is indirect tax, value-added. Taxes and GST, right, which is largely a non-us tax. So. I might just spend a little bit of time if, ok with you all just to walk through, the basics of what the business problem is in the tax problem that this solution is trying to solve. Well. Then I'll then how to cross to my colleague ed and Ed will give us a live demonstration of, the solution in action it has just come out of POC, phase, in Australia, we're really excited about the initial results and super. Keen to show you what. It looks like then. We'll talk a little bit about development. Roadmap given, that you. Know we are just out of POC and we have got big plans for this so. We'll talk a little bit about that how, we're planning to adapt it in certain, jurisdictions, given. The differences in in in tax and business problems, across the world and then. We'll spend a little bit of time on some of the future use cases and some of the questions that our clients have already started to ask us around, what the solution could potentially do outside of tax and. Then. Hopefully. If we can state a time and I know Australians, are notorious, for waffling. And talking if, we can keep the time we'll, make sure we've got a few minutes at the end for some Q&A and when we do - the Q&A. You, know the ask that will we'll just have of yours if you could just stand up and maybe just just take it microphone, in there in the aisle here to talk. Okay. So. The. Tool is called zip line. There's. A story behind the name and, some of my Google Australia colleagues, in the front seats. Here will know. I'll. Give you the official reason why we're calling it a zip line it is a no CRNA ni a combined. Solution, the. Reason why we've called it zip line and has got a meaning is. Because, we, see this piece of technology is solving, or bridging, a gap that has existed and has been a bugbear in in my world as an indirect tax advisor my clients, world trying. To cope with indirect tax automation, in systems because it's the last area, where. There. Is a manual, process that, can't until. Now have been automated and we're really excited to be able to say that we can get this automated on the Accounts Payable side. Of of the, tax ledger and so. For that reason because we're bridging this gap we call it a zip line and then. The simple reason why the. Other reason so it's got a double meaning the other reason why it's a zip line is because the p2p office and the Google office in Sydney is literally separated, by hundred yards of water and it, takes us half an hour 45 minutes to get across but, if you had a zip line we'd be there in two seconds so that, was part of the other reason so. And. So like I mentioned so so this is this is an OCR AI tool ed will talk about a bit about functionally.
And Technically how it works, I should. Just kv8. That by saying for all that the the techies in the room, we aren't techies we're, tax people we. Know enough about the tech to be dangerous. What, we've been really fortunate to have in both of our organizations in, Google and in PwC, is, a whole bunch of really really smart tech. People and engineers, that can help us bring this to life to. Solve the business problem that we have but. We will do our best to answer any of the technological. Questions, around sort of functionally how its set up and to the extent there are any of those questions. Okay. So, the business issue. So. Va te and GST, so value-added tax predominant. Tax on consumption. In. Europe and in, most of Latin America and in most of Asia Pacific, it's, called Goods and Services Tax GST ins, in some of those jurisdictions. It's. A little like sales tax in the US except. That it's two-sided, so. Not only do people, so. Businesses, that sell goods, and services, have, to collect and pay tax to the authorities, on the, things they sell so. That is a feature of the of the GST and VAT regime the, critical difference between g18 v80 and sales tax however is that and this is the two-sided nature of the tax is, that. You. As a business are. Also charged. V80 and GST. On the things that you buy, so. It's a it's an input and an output system. The. Good news is for, businesses is that for. The vast majority of, the, purchases, that businesses, make the. V8 e or the GST can be reclaimed it, can be recovered as a refund, from the Tax Office's. But. This is subject to a couple of key conditions, and this, is where the manual problems, have existed, in our world since. You know the 1970s. When the, tax was conceived, by the French. The tea the two key conditions, to be able to get that GST, or VA tea that's been incurred on your purchases, back from. The tax authorities, one, that. It is a specified. Business, eligible. Purchase, under local VA tea in GST law right. So there's a legal requirement that you need to meet and. That's based on tax rules and legislation. That. Business and tax legislation. Those. Tax rules are. Then augmented. Or qualified, by the type of business that you are so. There's a legal question is it, or isn't it recoverable, and then. The second question is based, on the business type that I am as an. Acquirer, of services, or goods how. Does that impact will change my, recoverability, of that tax so. That's the technical problem and in 150, countries around the world those rules are all different. The. Second problem is a. Document. Problem and I'm lucky, enough to kind of hear some of the the. Q&A and the interviews over, in Moscone, just before we went live and one, of the ladies was talking about dark data and. That's data that is is trapped. On a paper document in an unstructured form and that's, the problem that we having v in the VA TV world on purchases, we. Need to be able to identify. That. We hold a valid document to. Support our claim so. One we need to make sure legal in terms, of complying with the law - we need to check that against our business type and three, regardless. Of what goes into our system we need to hold a valid document in a specified, form and. So. What that is meant in terms of in terms of business process, is that typically. V80. And GST, on purchases, has. Been systemized, to a degree and that. Is effectively, once the data is input into the system, okay. So when. When a purchase is is made a Pio is struck, and an invoice is received either. A, vendor invoice or an employee expense, there's a big piece here around employee expenses. Thus. If the data goes somebody, has to actually lift the data off those invoices make, a GST, or v80 decision, what kind of expensive, is it recoverable and if, it is recoverable, what code do, I then apply to the transaction, as I'm, posting that transaction, into, the system okay. Once the transactions, in the system, systems.
Are Very very good at then automating, how, the GST, should then flow through the accounts, and then ultimately onto a return, so, that you can claim it back from from, the from, the regulator's so. That's what effectively we mean by a tax engine up on the screen so tax engines, are, really really good at, running, rules based logic to, identify, and capture GST, or VA te but. The key criterias. That we capture that data off, off of those source invoices, and that, old adage of, you. Know junk, e'en and junk out is really really true from a v18 GST perspective, on purchases. So. What we find as we've talked about is a very manual process across. A number of our clients across the world and that, could be a native Accounts Payable function, that sits on site it can be a BPO. You. Know an outsource function, but there is always inevitably, some, form of document. Checking manual, import and process, and what. We see is it costs, it. Creates, a lot of issues for our clients the. First issue is it costs money, and. I've, got to start up there from, from sa P conquer. They. Estimated, cost of EI t world GST, world there's, around 20 min 20, billion US dollars, of VAT in GST, on taxis, on hotels on flights on, meals. That. Just goes missing and, the reason why it goes missing is because, one. Businesses. See those as these as low-cost, purchases. They. But. They do add up over time obviously given, the given the number on the screen. To. The. Employees. Often. That are making reimbursement. Claims need to make those tax decisions off of the invoices, and, three. Because of that the. Risk of an employee selecting, a wrong tax code is, simply too high so, businesses choose not to engage and claim, that GST back. The. Second thing in the vendor world so outside of the the employee expense, but in the vendor purchases, world we, see a lot of problems batik in Australia, around that manual process risk on, accounts payable and you. Know some of the stats out of our Australian Tax Office, actually show that almost. 70% of, errors on the, Accounts Payable side, and this, is data collected across the whole of the Australian taxpayer base are, caused by system, and process. Deficiency. So. There's risk that, can go both ways you can i over claim or under claim because.
Of The manual gap and then three. Efficiency. Right so you're asking in this, manual world accounts. Payable and, BPOs, who, aren't often tax trained to, make tax decisions and process. Documents. For tax purposes and, that, takes time and effort that can be redeployed to other more value adding tasks, in the business. The. Last thing that. I. Just wanted to touch on in. Terms of the current state and why we saw this is a really key problem to solve is that the v80 and, the GST, world is undergoing a huge, shift, at, the moment, which is driven by technology, okay. So as. It stands in the majority, of the v80 in GST world, at the moment it's. A traditional, tax compliance, reporting system and what I mean by that is, transactions. Occur in a period in a month the. Month stops we've. Got 21 days to, then collate. All of that data out of our system put it onto a tax return and file, and in. That 21 day period between, month end and when we need to file this, time for us to run checks to extract reports, to. Do. Reconciliations. Into file returns right, so we've got time to look back over our data and check that it's right. The. Problem is where, we're now moving is to what what I call a real-time reporting, electronic. Filing regime and this. Is no more pronounced and in places like Spain where. The regulator now says we're, doing away with that that. That returned traditional, process and we're replacing it and what we're replacing it with is every. Four days I want, a direct upload out. Of your source systems as a client and I, want your AR I want your AP I want, your GL and I'll. Work out how much tax you have to pay and I'll, do it every four days and. You have to pay it every four days okay. So you can see that the mental shift from you. Know a time, lag between when a transaction occurs and when we need to report and when we need to collect and pay - now that'd be much more compressed and the, tax offices, across the world having a lot, more of your data than previously, you gave okay. So for, us what that means is it really, really enhances, this importance, of getting, those tax decisions right in the system first time and. So. We things applying does a lot of that we, think we think it fills that last mile between. Invoice. Receipt. From, third party suppliers from employees, who want their their, expenses, back into. The system to allow tax rules and classification, to work to, get your data right in the system at the time the transactions, are processed and. I might just hand over to Ed now just to give you a little bit more overview in terms of in. Terms of in terms of the solution and where we're at both as, a standalone, offering but, also some. Of the exciting opportunities that we're looking at at the moment in terms, of partnerships, and integrations, with, ERP, providers, and expense platforms, like SA P so, for example where we're in the middle of conversations. Right now with sa P concur to. Have integration, capability, to, actually have this as a as. An ongoing sub. Process within your employee expenses, system similar. Also for for. The accounts payable modules, in the in the core RP, providers, so, so at the moment a standalone solution but we're really really excited about what integration, looks like and having, this ingrained as a sub process for tax inside. Of the ERP, in, the future. Sure. Morning. Everybody. We. Got the solution overview, on the left-hand side as Brady mentioned, I'm not a tech guy either but I can talk you through basically, what the what, the technology stack. Is I think. The key points are on the right-hand side so. What are we doing we're extracting the, data from, the underlying source, invoices. Utilizing. Google's. Cloud. Vision, API and. We're. Also using a, machine. Learning base model, to, take that OCR output, and to classify the, fields, on the invoice or the receipt. As. Brady mission before we then have to validate whether what's on that invoice meets. Local requirements. So, there's a set of tax rules which we've built in, from. Each local jurisdiction, as to what fields are and are not required. Part. Three is where it starts getting really interesting, because having. Then taken those data fields, having, applied the.
Ml Logic, to, get the relevant data fields categorized, we. Can then run, PwC. Classification. Over, what that expense type is so, Brady mentioned before different, expense types are, capable, of different, tax, credits so, the. Capability, we've built in here, allows, for an expense type determination. And differentiation. Between. The expense that's been incurred where, it's relevant for for tax recovery. And. Lastly we get a validated, tax reclaim, amount per. Transaction, line-item so. If there hasn't been a booking in the underlying system, that, will be the GST reclaim amount or v80 if there. Has been then, we can reconcile, the, zip line output with, the underlying system output to, the extent that there's a difference, that can be investigated. So. If we look at the solution, itself, I think. The key point is, that we've got those two different, models so for invoices extraction. We've got an ml model that sits over the. Cloud vision API. Data. Extraction we, also use, the cloud, translate, capability. Where the invoice is not in English and we. Have that separate model for, the classification, in the bottom right hand corner of the expense type, so. For, those who are interested the, model that we're using is, a long, short-term. Memory, neural. Recurrent. Neural network, I, think. That I think I've got my memory right there. Jump. In Before we jump into the demo I think that's that's a really important. Point in terms of those four gates in. Terms, of that that, the. Business case that we started to think about nine months ago when we first saw some of this technology in use so. There, are a lot of OCR, as, you as many of you in the room would know a lot of OCR. Providers. That, look at expense posting. Data. Extraction from instruction, into structured. The. Thing that we really like about this and particularly, the Google technology, that sits behind it in the vision API on there and the deep learning models is. That unlike a number of other OCR, providers which takes a template or grid, based approach to OCR where. We teach the machine to look for things in certain quadrants, of a document the.
Benefit Of the of, the Google technology here is that because of the deep learning model that is behind it and the. Hundreds of thousands of documents that have sat, in the training data set is that, the tool keeps looking no matter where the data. Is is located, on a document, to, get the thing that we need okay. So that's the first thing that I really like about about, the about, the Google tech and and and the differentiator, that it gives the, second thing which is where I think the incremental value comes off some of the existing. OCR, processes, for tax is that not, only does it just extract, for the purposes of posting, it. Extracts. And while it's extracting, it applies smart logic to work out whether, the document, is valid from. A tax perspective to solve that that point we spoke about before and then. It also does, things like pings, you. Know you, know internet registers for tax authorities, to validate that this that the seller is who they say they are that, their that their ABN or their VAT IDs correct, so they are genuinely registered, and that matters in, a lot of jurisdictions, and. It also validates, the GST calculations, or the VAT calculations, so are. We seeing a ten, dollar GST. Amount for a hundred dollar purchase, in Australia, the vit rate is 10% so. It is doing a whole bunch of smart calcs using, the ml based, on tax rules and logic that PwC, is co-created, together with Google to, actually lift the data and do smart things to it on the invoice level so, that's gate one right, then. Once we get through the invoice validity, phase we then kick it into another airmail model which, is a tax engine which. Actually runs categorization. So. Looking at so for example if we've acquired stools. How. Is how, does the body of data that sits in the ml model categorized. Stools for that purposes, office. Equipment so, it'll say stools, equals office equipment and that, will then do the auto categorization, which, then allows the. Standardization, to occur for it for, a tax calculation. Rule set to then do the rest of the job in the system and so. You know, the smart technology that. Google has in vision API and, their deep learning models the. Tensor flow models that sit behind the tax rules engine. Augmented. And supplemented. By PwC tax content, for us is where the magic happens in this and, we're really really keen to show you kind of how this works with a few real you, know real life scenarios, but, that, I think is the key differentiator, between, this. POC. And what, other. OCR, providers, on expense side in the market do today we. Actually add some smart analysis at the time that the OCR is scanning, the invoices, and post-processing.
Those Invoices sorry. No, this one so if you we. Move on to the next process. Which, outlines, what the business process actually is at the moment if we have a look at the top, line here this. Is what's. Happening within the expense management system, so we've got started going into the system, we've, got typically, an AP Clark or an employee making those classification, decisions, where. Zip line comes in is that second line so. As Brady mentioned, the, tenta flow models, the, cloud vision API the. Translate API we're, required will kick in and that. Then that triggers, the automated, process of. That, validation. Classification. And then, tax credit calculation. Which can then feed automatically. Onto, a tax return or, in, a live reporting, environment, directions in Saxony. So. With that I'll jump, into the demo and show you. Exactly how it works. Excellent. So. You. Will notice that the UI has. Not been designed as a client facing UI at this point in time this is an internal PwC. UI we are developing a client UI but, for the purpose of the proof-of-concept, we. Kept this as an internal, one but. Certainly our anchor clients, are very interested in the visualizations, that we can take from this process. So. The first step is going to be to get the documents. Into the system, so. Here I'm going to select five. Invoices. We're. Going to upload those invoices into the system you. Can see that that happened very quickly, we, are unconstrained. By, volume. Instead. Of give you an example one, of our anchor clients has several. Hundred thousand, invoices, again. The power of the Google tech allows for the OCR to, happen in a matter of milliseconds. So. We're completely unconstrained, by my data upload. We. Are working with partners, such as s AP and sa P concur on utilizing, their ap is to go direct into their systems, because, for bulk data. Extraction, that. Using the api's is most, efficient, that. Said we, also have developed RPI, solutions, to, allow for bulk, extraction. Of data where an API is not available, so. Those. Files have now been uploaded you can see that we have each of them here to, the extent of file has been multiple, pages that's automatically, split it into individual, pages. We. Can now go in and look at a particular invoice, so. Here we've got an, Australian, invoice. It. Is a valid tax invoice so. We'll show you how the OCR process has worked. So. The OCR has identified each of the individual, text blocks on the. Invoice. Once. It goes through the tensorflow model, and applies the machine learning you'll. See. We. Have small text here but, you can see that it's identified, things like the, vendor, name the. Vendor tax registration number, the. Date of the invoice. Description. Etc, on. The, right hand side we, have all the relevant fields, for. In this case an Australian invoice, and again. Given that we had the content of the PWC global, network we, know what fields are required for what document, type in every location around the world with a BAC or GST system.
So. You'll see here that that tensorflow model, has. Taken each field and identified. Whether the value exists, within that invoice so. Here we do have the, phrase tax invoice which is requirement we've, got the date total. Amount GST. Amount included, the, vendors tax registration number etc. So. As I said before in a matter of milliseconds we've. Taken an invoice it's. Been uploaded, and then, ocr'd, the, EMA model applied and, we now have all the relevant fields, available for. Either input into the underlying system or validation. Of the underlying data, input. So. All of those invoices, have, now been uploaded. And, we're. Then going to visualize that through what we call the Swift dashboard, so, the, Swift dashboard, is where that, stage 2 ml, has happened so this is where the expense classification. And validation, is taking place. So. You see here we've got some, stats, up top we've got how many transactions, have been uploaded. Into the solution, the. Total value of transactions. That's been classified, the. Total BAC spend, on those transactions. And then, the resulting, BAC flammable, so. Going back to Brady's earlier point on live reporting, here. We can take an entire data, set for, a larger organization and. Within a matter of minutes it's. Gone through the process being validated, and it's producing, a vit claimable, amount which, can go on a return or directly to the tax authorities. We've. Got some visualization here, over, the, amounts. The vit spend, and the categorizations, and as. I mentioned before we're developing, this further with with clients, for a client user interface. But. What I want to do now is just take you through what those five invoices, were and to, show you how the classification. And validation, process, has worked. So. I'm going to start with one which, is a, valid invoice but is foreign, so. A. Foreign. Invoice is, not. Going to be subject to reclaim, in Australia, if we, have a look here this. Is an invoice from, Singapore it's, a hotel invoice this, would be a valid invoice if it was being incurred by Singaporean, company in Singapore, but, here it's been occurred incurred, by an Australian, so, it's not claimable within the Australian GST. System. So. If we click back into into Swift we'll see here that it was a valid invoice. However. It's been classified as foreign. It's. Listed the total amount it's, listed the VAT spent and here. It's made that tax, calculation, decision, that, the tax payable is zero on the basis that it's not local tax, interestingly. Enough, there are a lot of cross-border, tax credit mechanisms, so, even though it's not claimable within Australia we can then report for potentially a Singapore reclaim where, the client will be able to claim that seventy.
Three Dollars back in a separate tax return. We. Move on to the next example and this is the one that we really try and avoid this. Is where we've got a local invoice, but, it's not a valid invoice. If. We have a look at this example. This. Is an uber receipt, the. Value here is 83 dollars in, Australia, we have a rule that anything. Above eighty two dollars fifty requires, certain, requirements, that aren't required under that threshold so. One of the requirements is it must have the term tax invoice at the top you. Can see here that the term invoice, appears. But, the term taxi invoice does, not appear as. Such when we look at how the, solution, has prefilled. These fields, it is not applied a value, for, the tax invoice phrase appearing, on, that basis, when we go back into the solution you, can see that it's been deemed. To be invalid its, domestic. There. Is an amount of tax on the invoice but, it's not claimable because we have an invalid document, these. Are the types of documents that are really useful from a management reporting perspective to, then inform the control and process environment, upstream about, what type of data and invoices, is being, provided by, either vendors, or employees. Into, the relevant systems because here we've paid tax out we. Do have an implicit right to claim it if we have a valid document but for whatever reason we don't hold that document, if, we did we'd you get the tax back this, is a massive gap in our client base where, they're paying substantial, amounts of tax out but, that but the document is not valid. The. Third example is a valid one where there's no GST, on the underlying invoice, so. If we have a look here. This. Invoice formatting. Is perfect, it requires it, has all the required fields, but, if we have a look it. Was international travel, and therefore there was no GST, in the price. So. The solution has classified, that as a valid invoice as a, domestic invoice, but. With no GST, recovery, because. There was no GST spend in the first place, one. Of the risks with previous, solutions, is that when you have a category, like airfare which could potentially contain, tax or not depending. On whether it's domestic versus international travel, if, you automatically, assign a tax credit calculation. To that airfare category, that, may have imputed. A tax credit in this case where, there was no, tax paid so. By going to the source document, and validating, it we. Take out any risk that the underlying classification. Of that expense type account it may have been incorrect. And. If. I could just add so so this is for, us where the, real value occurs, so I mentioned, before around systems having rule sets to calculate GST, we. See time and time again the, system doing its job perfectly and what I mean by that is when the, code is hit that says this is a tax reclaimer will, expense, everything. Works the problem. Is if you're, leaving it to an employee or an Accounts Payable clerk to rely on that first decision to get the categorization right. Then. That's, where the risk occurs and so what this solution does is it scans the source document, and works, out from the source document, based on the ml model this is behind what, kind of expense it is and is it classified as a recoverable, expense or a non recoverable expense, so, that gap where. You're relying on a non tax trained person to make a tax call goes, away and that's, where we see the rule bit value, year and. As, business processes. Have become more and more outsourced, and more and more removed from the business that's, how the MIS classification, is having more and more often. So. I'll run you through just, the the last couple, of examples, here I want, to show you a, standard. Invoice. It's. The one we looked at before so. As I mentioned earlier on all of the relevant requirements for. A valid tax invoice are. Here so. The solution, has. Deemed the invoice to be valid, it's. A domestic invoice. It's. Capable, of full v80, or GST recovery, because here it's a hotel invoice that's a valid business spend, so.
You'll See here that the bat spend has been identified and the back claimable has been identified as, exactly the same amount, so. This is where we would expect the vast majority of our clients invoices. This, category to fall into where you do have a valid document and your auto calculating, the tax but. To brady's earlier point you're getting the surety, that on each and every occasion that. The system is working correctly rather, than applying a default rule. And. The last one I want to show you is where the real intelligent, part of that second ml model is. Coming in so. This, is where we have an, entertainment. Expense. So. Here we've got an invoice or a receipt from from a restaurant. The. Value shows that it's not subsistence. I may. Or may not have participated in that event but, like it was a good one. So. Here. That. Logic, that's applied within the ml model of looking, at the vendor type of looking, at the spend the, location. Has been able to determine that rather than being a general expense this. Is an expense of an, entertainment nature, now entertainment, typically, and most that jurisdictions. Has a restricted, recovery because. The tax office doesn't want you to be able to go out and and have a high-value lunch. Or dinner and claim, all the tax back, so. Here we've identified that, it falls within that category it, is a valid document so. When it comes to the back claimable amount we've been able to apply the relevant, local rule for, restriction, so. The VA spend amount is, double, what the VA see claimable, amount is because. We only have a 50% right, to recovery of entertainment, expenses, this. Again is one of those scenarios where if you're an AP Clark or an individual, trying to do a classification, in, an. Expense type which is not subject to full recovery that. Gives very very tricky so. The m/l model that sits behind this has been trained for years by PwC, to, do expenses type classifications. Both for indirect taxes, corporate. And other taxes, and so, we're able to apply it here to. Do that classification, and we can use the same expense classification, methodology, in any, country, that has a differentiation. On tax, credit of different. Expense types incurred. So. What we've done here in in. Australia is really just categorize down to what we would call the lowest common denominator, from a GST recovery, perspective, and we. Need to go deeper and deeper depending on kind of what the business is so for example financial services, entities in most VAT jurisdictions. Have, a really complex that. Recovery, profile, on purchases, and so. The. Swift classification. Logic the PwC classification, logic that is deployed. Into the Google ml model, enables. Us to categorize. Know. Just like what you saw on that entertainment experience, to look at the individual. Description, of the. Line on the invoice apply. Business, rules against that to understand, what, kind of expense it is and who's incurring it and in what cost centre and what department and then. Apply, categorization, logic, which then tags, to a GST, or v80 result, okay, so that's where the that's where the tax marks really kick in and where, the ml models really really serve as well because we can access hundreds. Of thousands or millions of, of similar. Transactions, posted by all of our other clients obviously. In a fully, sanitized, way to, deal with privacy to. Then effectively, come back out with our suggested. Classification. And categorization, which.
Is Really really powerful because effectively what we're now doing is moving away from rules, based tax. Decisions to model-based tax decisions, you, know which is really exciting so. That's, the end of the demo we, thought we would then take you through where. We're, going to take the solution. Over. The next couple of years. So. The product development, roadmap for the rest of 2019, as we discussed earlier we finished the proof of concept earlier this year we've. Now gone live with, this as a live client solution, within, Australia. We're. Very quickly localizing. The solution. In, additional. Jurisdictions. This, will be our global, solution, so. We're moving very quickly I'll talk about those locations, in the next slide, and, next as I mentioned earlier the API, configuration. To expensive management systems we, see as key in the short term because, typically our clients, really. Struggle with the extraction of data so, being able to have api's, into, the main expense management systems, including. The SA PSAP. Conquer Oracle. Etc, all. Those main expense systems will, be looking to configure, into. Their api's and. UI. Enhancement. As, pretty as this looks or did, look, we're. Very conscious that clients, do want value-added. Analytics, and reporting as. Brady was mentioning earlier if you think about the expense classification. Analysis, that we've been able to do some, of our clients have talked to us about using, that for broader management, reporting because a lot of them don't have visibility themselves. Over, the different classifications, of expense spend. Or potentially. Miss classifications, so. Broader use cases are we're, looking into as well. So. I'll move on to our localization. Strategy. Sorry. Just, I know these back and forth poppies and we should have really prepared it back. And forth I apologize, um the, one thing I was just going to was. The. The API and configuration, into, the erps and I kind of touched on it earlier really. Really critical for us because this. Is one part of a broader compliance, process, stream for tax so. We've got calculation. In the, system and then, that data then moves into, reporting. Suites an, SI p an oracle in. Particular are developing, their capability, around, tax reporting, and filing. Out of the ERP as opposed, to extraction, and then filing in you know via a third party, solution, and so, what. This is really really exciting about is this enables, end-to-end automation. And PBC, actually is working with SOP as, well to, build. Tax. Reporting, solutions, inside of the ERP, to do the the filing to the regulator some, of the you, know the post-filing analytics, and reconciliations. And trending, and variance testing and so, by, having back-end. You. Know backend automation, inside of the ERP to do tax, compliance, and reporting combined. With tax calculation, at the front end all inside, of the system is, a really really exciting prospect, for us and it's an it's enabled, by. GCP and google ai and ml, you. Know through, through the collaboration, that you know PVC sop, and google a you. Know partaking, in at the moment so really, really exciting, times sorry. So. Our localization, australia we've started in australia we're sort of hitting north west through, through, the world. We're. Localizing, for three different reasons. So. The strategy is driven by the complexity of tax rules so, we certainly believe that we should tackle complex, jurisdictions. Early because if you can do it in complex jurisdictions, you can do it in anywhere and the. EU and Canada are. Examples, of particularly, complex, jurisdictions. So, those localizations. Are already underway. The. Value of tax at stake clearly our clients, want us to localize, where they, have the biggest task tax risk or biggest, tax amount sitting on the table not, being collected so. An example of that in us in at the asia-pac region, is Singapore, so, Singapore, is the hub for. In the region which, have a v80 and GST Hong Kong does not so, our Singaporean, based clients are very keen to get this solution so we're localizing, there and.
India, Is an, example of where you have very complex, local, country validation, rules so, the process, for claiming, tax credits and invoice on. Invoices, in India is very complex so, we're localizing, there as well so by, localizing in those different countries which have those different complexities. And requirements. We're. Confident, that we, will then have a product, which is truly globally. Capable, based. On those first five countries and. Certainly, we're looking to replicate what. We've already done from, global v80, reporting. Automation, for. Which we've had a solution in place for a number of years into. This upstream. Source, system, classification. Validation. And calculation. So. We'll. Finish just on future use cases and, I'd be keen to hear anyone's, ideas because it always open to new ideas our. Clients were always challenging, us with, new ideas, so. The obvious one to us is any other tax applications. Where, the underlying document. Is relevant, for, for tax classification, so here we're talking about withholding, tax stamp. Taxes, sales taxes. If you're having to make an, OPEX versus capex, decision. Which has a tax impact any, of these taxes, which. Rely on a document, for. Calculation, and validation, are prime candidates, and our clients are asking us to build, those, more. Broadly in finance process automation, many. Of our clients are going through those cloudy RP upgrades, at S 400 upgrades, etc and, this, is the, perfect time for them to do that that last leg of automation, which, isn't necessarily, available within, those cloud ERP, Suites. And. Thirdly. Brought, a business. Process automation I mean, the sky's the limit anything within a business process, which. Involves someone. Having to use a document to make a decision, or a classification, or, a validation, the. Zip line can be applied to so. What, we're, keen to get the core use case bedded down, and localized across those five countries but, we really see the ability to have multiple. Streams and, multiple different use cases of zip line in. The very near future and. I think it's useful to call that in two and three in particular well, in it costs all of those three use cases with these are real examples of clients, in the, very very early embryonic, stages, of this project. That, are starting to ask us could it do this could it do that and so, we've had clients ask us about withholding taxes we've, got one client we were actually doing a an. Augmentation, of this to do accounts payable processing, so, to actually process the expense, and. Replace, the existing process altogether not just do the tax calc really, exciting stuff particular. When you see the cost of invoice. Processing which, I think we had on one of our earlier slides and around five dollars us an invoice.
The. You know the other thing that we've started to do is work together with some of our forensics. And analytics, teams outside of tax and. We're. Doing things you know in terms of complimenting some existing processes around you, know loan document, analysis, for banks, you. Know expense, fraud analysis, just. Given that the power of the data that we've got in this in this in, this, model, and. So yeah really really you, know we see this is as a you. Know a little humble indirect tax. Solution. That, has much much greater application outside, of indirect taxes and. Huge potential for client. Through our clients.
2019-04-13 06:16
