Finance and tax teams are entering a new era of AI and automation

AI and automation are not just tools for improving efficiency, but key forces for ensuring compliance in an increasingly complex regulatory environment.

Currently, companies face growing pressure from global e-invoicing and real-time reporting mandates, which are layered on top of heavy domestic and international tax compliance obligations.

Although AI and automation are accelerating in adoption, progress varies by country, and many companies remain exposed to risk.

The latest survey by Hanover Research and Avalara reveals the following key findings:

  • AI and automation are now a must-have:84% of surveyed finance and tax teams are heavy users of AI.
  • Companies claim they are ready for e-invoicing, but reality is questionable:Nearly nine in ten respondents say they are prepared for e-invoicing and real-time reporting, but only one-third have standardized global processes.
  • Privacy and security concerns remain prominent:57% of organizations say privacy and security are major barriers when choosing AI solutions.

Survey highlights at a glance

  • AI and automation are now mainstream:84% of respondents are heavy users of AI (up from 47% in 2024).
  • Efficiency gaps remain:86% of companies outsource or automate tax functions.
  • E-invoicing still has room for improvement:Only 33% have globally standardized processes.
  • Technology investment is surging:86% expect to increase AI investment in the next 12 months.
  • Regional differences are significant:North American companies (66%) lag behind Australia (87%) and the UK (82%) in prioritizing automation.
  • AI concerns persist:63% cite privacy and security as the top barrier to adoption.

AI and automation are accelerating

Artificial intelligence and automation have completely transformed the way finance and tax teams work.

More than a quarter (26%) of respondents say that internal adoption of AI and automation has had a significant impact on their finance and tax teams over the past 12 months—57% report a moderate impact.

Nearly all respondents (99%) believe AI is particularly well-suited to improving the day-to-day operational efficiency of finance and tax teams. Furthermore, the proportion of companies strongly agreeing with this in 2025 (86%) is more than double that in 2024 (41%).

Most tax and finance teams (84%) say they are heavy users of AI in 2025, compared to 47% in 2024. This jump indicates that AI is now standard, and companies not using AI for compliance or efficiency may already be falling behind their peers.

Organizations use AI for a variety of tasks, including financial analysis and reporting (72%), audit management (54%), and accounts receivable/payable management (45%). AI also assists in monitoring tax regulation changes (51%), preparing and filing tax returns (47%), and researching and calculating sales tax and VAT (37%).

Companies have already realized tangible benefits from AI, including improved operational efficiency (63%), better decision-making (60%), and increased accuracy (58%). Respondents also mention that AI brings operational scalability (39%), cost savings (38%), and better compliance and risk management (28%).

Teams seek external help to bridge efficiency gaps

In the AI era, to work smarter, many organizations turn to external experts and technology. Companies bridge overall efficiency gaps through outsourcing (86%), increased technology investment (80%), and automation and process optimization (80%). They also take specific actions regarding tax management and responding to internal and external factors.

The survey found that nine in ten respondents say their company outsources tax functions. But many companies also focus on internal improvement: nearly three in five respondents say improving the efficiency of existing finance and tax teams remains a future priority.

Navigating global e-invoicing standards

Companies are feeling increasing compliance pressure—more than 80 countries worldwide have announced or already implemented e-invoicing and real-time reporting mandates.

Most respondents (86%) say they feel 'very' or 'extremely' prepared to comply with e-invoicing and real-time reporting requirements. One-third of companies have globally standardized e-invoicing processes (even in non-mandated regions), while just over a quarter (27%) say they only comply when legally required.

Other companies are implementing e-invoicing, either for compliance or to improve operational efficiency. Only 2% currently have no strategy for addressing e-invoicing and real-time reporting requirements.

Security and privacy remain major barriers to AI adoption

In the July 2024 survey, nearly half of organizations cited data security and privacy concerns as challenges to using AI solutions. The latest survey from March 2025 shows that privacy and data security issues remain the biggest obstacles when starting and scaling AI.

More than half of organizations say data security and privacy concerns are barriers when selecting and implementing AI solutions, and nearly as many still have these concerns after implementation.

Many organizations also face a shortage of AI and automation talent and skills. Other barriers include regulatory compliance, difficulty measuring AI ROI, and integration challenges with existing systems.

Tax and finance professionals have similar concerns about automation. The survey found that 63% of respondents cite data security and privacy as the top barrier to automating tax and finance functions.

The role of finance and tax in AI

Beyond improving efficiency and integrating technology, finance and tax professionals also focus on several priorities. International growth and transaction tax management and compliance are becoming increasingly important.

Global market expansion was the top priority for 42% of finance and tax teams in the 12 months before the survey, and 61% of companies say it will be a top priority in the next three years.

Teams are also increasingly focusing on transaction tax management and compliance. 41% of companies listed it as a priority in the past 12 months, and more than half (51%) of respondents say it will be a top priority in the next three years.

Most finance and tax teams (70%) have a significant say in decisions affecting their organization's tax function. However, leadership teams (59%) primarily control strategic direction. Additionally, executives (46%) are more likely than finance and tax teams (7%) and IT teams (27%) to control AI strategy.

How Avalara can help

Finance and tax professionals are under constant pressure to do more with less. Avalara automates tax compliance, helping global companies improve efficiency and reduce audit risk.

Avalara Agentic Tax and Compliance™ helps your business keep up with regulatory changes and meet e-invoicing requirements, ensuring current and future compliance.

Want to learn more?Contact usto learn how Avalara can help global companies like yours scale smarter, reduce risk, and manage tax compliance with confidence.