By Mr Dulles Krishnan, Vice President, Go-to-Market – India, Avalara
Global trade is constantly evolving, and businesses are seizing new opportunities by prioritising smart compliance strategies for sustainable growth. As tax regulations change frequently and cross-border operations grow, companies are embracing automating tax compliance. This shift is largely driven by the fact that manual tax compliance processes are often tedious, time-consuming, and susceptible to errors. In response, businesses are increasingly turning to cloud-based and automated solutions to streamline regulatory adherence, improve accuracy, and integrate compliance with core functions such as supply chain, tax operations, and logistics. A recent study reveals that 70% of organisations have already implemented global trade automation systems, while the remaining ones are in the process of doing so—highlighting a collective shift toward automation. As organisations continue to invest in process optimisation and technology-driven compliance, it is safe to say that the future of global trade is set to become more agile, efficient, and productive.
Cloud technology helps enable tax compliance
As more jurisdictions move towards electronic management and reporting of trade transactions, Real-time assessments and control checks have become an essential part of the process. Industry professionals are designing tailored strategies to identify areas where automation can simplify processes. This includes tasks such as real-time monitoring of sales tax obligations and the automation of key reporting functions, ensuring businesses stay aligned with ever-evolving regulatory standards.
Given this, the automated systems help streamline tasks like classifying goods under correct tariff codes or calculating taxes and duties. This not only helps reduce human error but also speeds up decision-making. As global trade expands, reaching nearly $33 trillion in 2024, Automation is helping mitigate risks, particularly in complex markets with varying tax rates and customs regulations. Automating processes helps businesses lower the risk that comes along with human errors, such as misclassifying products or failing to comply with tax obligations. You can also save your team the time and hassle of manually inputting data and tracking down documents. For example, in the US, there are over 12,000 taxing jurisdictions, each with the authority to adjust rates and regulations frequently. Here, automation software can quickly update its system to adapt and calculate the correct tax in real time.
Embedding AI in business operations
As international trade regulations become increasingly stringent, traditional compliance Methods—often reliant on manual processes and static workflows—struggle to keep pace. Artificial Intelligence (AI) and Machine Learning (ML) assist here, making processes more efficient, accurate, and adaptive to evolving regulations. For example, AI-powered systems can swiftly classify goods under Harmonised System (HS) codes, helping ensure accurate tariff applications while helping reduce errors. Additionally, by dynamically mapping supply chains, AI provides real-time visibility into trade activities, allowing businesses to proactively identify compliance risks across suppliers, manufacturers, and distributors. This enhanced transparency helps prevent counterfeit goods, support ethical sourcing, and mitigate risks associated with geopolitical shifts.
Beyond classification and risk management, AI-driven compliance tools integrate seamlessly with enterprise systems like ERP, CRM, and global trade automation platforms, centralising real-time tax rates, duties, and shipment details. This ensures accurate tax calculations, reduces discrepancies, and streamlines duty management. Automated documentation further alleviates administrative burdens, fostering seamless collaboration between compliance teams, customs authorities, and logistics providers. With intelligent automation at their core, enterprises can confidently manage international trade, ensuring compliance while staying agile in a rapidly evolving regulatory environment.
Trade Compliance for Growth
Trade compliance, often viewed as a bottleneck, can be a powerful business growth driver. Staying informed on global regulations and utilising cloud technology and AI-driven tools can help exporters remain compliant with ever-evolving laws and reduce the risk of additional costs and errors. This is possible by partnering with reliable service providers that simplify sales tax returns and reporting, leveraging technology that facilitates growth and cross-border sales, and using solutions that support compliance in purchasing. These tools collectively help businesses maintain a competitive edge in the global market.