Reinventing finance and tax: Leaders see AI and e-invoicing as agents of change 

Artificial intelligence and automation aren’t just tools for improving efficiency; they’re serious powerhouses in ensuring compliance across an increasingly complex regulatory landscape.
  
Today’s businesses face growing pressure to comply with global e-invoicing and live reporting mandates. These challenges are added to an already overflowing plate of international and domestic tax compliance obligations.

While AI and automation are taking off, not everyone is at the same stage. Countries are progressing at different speeds. Many remain exposed to risk.

The latest survey from Hanover Research and Avalara uncovers several key findings.

• AI and automation are no longer optional: 84% of finance and tax teams surveyed are using AI heavily.
• Businesses feel ready for e-invoicing, but are they?  Nearly 9 in 10 respondents say they’re prepared for e-invoicing and live reporting, but only a third have a standardized, global approach.
• Privacy and security concerns are still prevalent. Results show 57% of organizations say privacy and security were barriers when selecting AI solutions.

• AI and automation are mainstream: 84% of respondents use AI heavily (up from 47% in 2024).
• Efficiency gaps still exist: 86% outsource or automate tax functions.
• E-invoicing has room to grow: 33% have a global, standardized process in place.
• Technology investments surge: 86% expect to boost AI spending within 12 months.
• Regional differences divide: North American businesses (66%) lag behind those in Australia (87%) and the U.K. (82%) in prioritizing automation.
• AI fears still linger: 63% name privacy and security as the top barriers to adoption.

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

More than a quarter (26%) of respondents reported their finance and tax teams have been majorly impacted by the internal adoption of artificial intelligence and automation in the previous 12 months — 57% reported moderate impacts.

Virtually all respondents (99%) believe AI is uniquely suited to make the day-to-day operations of their finance and tax teams run more efficiently. Moreover, the percentage of businesses who strongly agree with this statement in 2025 (86%) is more than double what it was in 2024 (41%).

Most tax and finance teams (84%) said they’re using AI heavily in 2025, up from 47% in 2024. This jump indicates that AI is now table stakes, and that businesses that haven’t adopted AI for compliance or efficiency may be falling behind their peers.
 
Organizations are using AI for a variety of tasks including financial analysis and reporting (72%), managing audits (54%), and managing receivables and payables (45%). AI is also helping them monitor changes in tax regulations and compliance (51%), prepare and file tax returns (47%), and research and calculate sales tax and VAT (37%).

They’re seeing real benefits from AI including increased operational efficiency (63%), improved decision-making (60%), and improved accuracy (58%). Respondents also said AI has led to scalability of operations (39%), cost savings (38%), and better compliance and risk management (28%).

The need to work smarter in the era of artificial intelligence has many organizations turning toward outside experts and technology. Businesses are outsourcing (86%), investing in more technology (80%), and automating and optimizing processes (80%) to close efficiency gaps overall. They’re also taking actions to close efficiency gaps, specifically in tax management and in response to internal and/or external factors.

The survey found that 9 out of 10 respondents reported their businesses outsource tax functions. But many are also focusing internally; nearly 3 out of 5 respondents reported that increasing the efficiency of their existing finance and tax teams will remain a priority going forward.

Businesses are feeling the rising urgency to comply with mandates set by 80+ countries worldwide that have announced — or already require — e-invoicing and live reporting.

Most survey respondents (86%) say they’re extremely or very prepared to comply with e-invoicing and live reporting mandates. One-third of businesses have a standardized e-invoicing process globally, even where not required, while just over a quarter (27%) say they comply only where legally required.

Others are in the process of implementing e-invoicing, either for compliance or to create operational efficiency. Only 2% don’t currently have a strategy for complying with e-invoicing and live reporting mandates.

Almost half of organizations surveyed in July 2024 cited data security and privacy concerns as a challenge when using AI solutions. The latest survey from March 2025 shows privacy and data security concerns are still the biggest blockers when getting started with AI and when rolling it out.

More than half of organizations say worries about data security and privacy were barriers when selecting and implementing AI solutions, and nearly as many continue to have these concerns after implementation.

Many organizations struggle with limited expertise in AI and automation and a shortage of skilled professionals. Other hurdles include complying with regulations, difficulties measuring ROI of AI investments, and integration challenges with current systems.

Tax and finance professionals have many of the same concerns about automation. The survey found 63% of respondents cited data security and privacy concerns as the top barriers to automating tax and finance functions.

Finance and tax professionals are focused on many priorities in addition to boosting efficiency and integrating technology. International growth and transactional tax management and compliance are becoming increasingly important as well.

Global market expansion was a top priority for 42% of finance and tax teams during the 12 months prior to the survey and 61% of businesses say it will be a top priority over the next three years.

Teams are also placing a greater focus on transactional tax management and compliance. This was a top priority for 41% of companies during the prior 12 months. More than half (51%) of respondents say it will be a top priority during the next three years.

Most finance and tax teams (70%) have major input on decisions impacting the tax function at their organization. However, leadership teams (59%) primarily control strategic direction. In addition, executives (46%) are more likely than finance and tax teams (7%) and IT teams (27%) to control AI strategy.

Finance and tax professionals are under constant pressure to do more with less. Avalara automates tax compliance to help global enterprises operate more efficiently and reduce audit risk.

Avalara Agentic Tax and Compliance™ helps your business keep pace with regulatory changes and navigate e-invoicing mandates so you’re compliant today and in the future.
 
Ready to learn more? Reach out to inquire how Avalara helps global enterprises like yours scale smarter, reduce risk, and manage tax compliance with confidence.