How to prepare for tax season 2025

It’s that time of year again. Deadlines are getting closer, workloads are heavier, and finance teams around the world are preparing to close the books while trying to decipher all the latest tax changes coming into play. For CFOs and finance professionals, tax season 2025 brings more than the usual pressure: it arrives with regulatory updates, digitisation mandates, and a growing expectation for real-time accuracy.

Gone are the days when spreadsheets and filing cabinets could support a company’s tax prep. Today, digital receipts, cloud-based documentation, and AI-powered tools have become essential for organisations to stay compliant, maintain control and ease the burden on busy teams.

In this article, we’ll explore how finance leaders can confidently face the upcoming tax season with less stress and minimal risk. With the right technology at hand and by staying ahead of the key changes, tax season can be more manageable and even become a part of the business’s strategic workflow.

Preparation for tax season around the world has gone through a major transformation over the last decade. What was mostly a paper-based, end-of-year process has now evolved into a continuous and digital-first responsibility. The main reasons? Technological innovation and the increase in regulatory pressure.

Tax authorities across markets are accelerating the shift towards e-filing, digital documentation and real-time reporting. In the UK, for instance, the Making Tax Digital (MTD) initiative mandates that VAT-registered businesses use digital tools to submit returns and maintain records. Deadlines have been extended. However, the direction is clear: digital compliance is no longer optional; it’s mandatory.

The same trend is visible in the EU. As part of the European initiative for VAT digitisation (ViDA), businesses will be required to make VAT reporting obligations for cross-border transactions fully digital by 2030. The project aims to enhance tax transparency, reduce VAT fraud, and modernise financial operations.

Real-time (or near real-time) reporting requirements are increasing, leading businesses to implement tools capable of delivering instant insights and reducing processing delays.

As a result, finance teams must manage compliance and the transition to systems that enable secure, accessible, and scalable management of tax data. Enter: cloud-based platforms.

These systems have become the standard for storing and organising financial data, allowing teams to access information from anywhere, maintain version control, and collaborate more efficiently. Combined with the rise of digital receipts and e-invoicing, the transition to digital systems gives finance teams with an agile and transparent approach to tax preparation.

Meanwhile, tax authorities are raising their standards for timeliness and accuracy. Real-time (or near real-time) reporting requirements are increasing, leading businesses to implement tools capable of delivering instant insights and reducing processing delays.

Companies that cling to outdated methods risk falling behind. Digital transformation is now much more than just ticking the compliance checkbox; it is the first step toward future-proofing finance operations.

Manual tax preparation is one of the most time-consuming and error-prone tasks for finance teams. Relying on spreadsheets and paper-based processes only adds to the pressure when every minute counts. That’s where automation and AI come in.

AI-powered tools help businesses digitise receipts, accurately categorise expenses, and flag compliance issues in real-time. Instead of manually reviewing each transaction, finance teams can use automated systems to match receipts with card transactions, detect duplicates, and ensure that expenses are logged in the correct tax categories.

Automation and AI are becoming critical tools for finance teams looking to stay efficient, accurate, and compliant during tax season.

Platforms like Rydoo use AI-powered receipt scanning with up to 95% accuracy, helping teams submit and process expenses in seconds. Businesses have reported over 70% increase in productivity and 97% time savings.

Automation also allows for better decision-making. With tax-relevant data centralised and updated in real-time, finance teams can instantly generate reports, track outstanding deductions, and identify potential risks before they become costly mistakes. Features like Rydoo Smart Audit can flag out-of-policy spending or suspicious claims before they reach an approver, including flagging receipts missing a VAT number, which may be required for tax purposes.

In short, automation and AI are becoming critical tools for finance teams looking to stay efficient, accurate, and compliant during tax season and beyond.

Tax season doesn’t have to mean chaos. With the right preparation, CFOs and finance teams can stay organised and compliant without adding to their workload.

Here’s a step-by-step checklist to help you during taxing season:

1. Review year-end documentation
   Start by reviewing all financial documents from the previous fiscal year. Check to see if all income statements, balance sheets, cash flow reports, and general ledgers are up-to-date and accurate. Double-check if any adjustments, accruals, or depreciation schedules are complete and compliant.
2. Ensure tax-compliant expense categorisation
   Verify that all expenses are correctly categorised according to local tax regulations. Misclassified expenses can lead to incorrect deductions or non-compliance penalties. If you’re using an expense management tool, confirm that your categories align with tax reporting standards.
3. Automate receipt to expense reconciliation
   Automated reconciliation tools like Rydoo’s transaction matching can help verify that a valid receipt backs every expense. This reduces manual work and ensures that you have proper documentation for audits and filings.
4. Update expense policies and approval flows
   Review and update your company’s expense policies to reflect any regulatory changes for the current tax year. Make sure approval workflows are working properly, and policy enforcement is automated wherever possible to minimise the risk of out-of-policy spending.
5. Validate vendor information and outstanding payments
   Confirm all vendor profiles, including tax IDs and payment terms, are updated. Reconcile accounts payable and confirm there are no unresolved invoices or tax-relevant liabilities that could delay filing.
6. Back up relevant data in secure cloud storage
   Store tax-critical documents and reports in a secure, cloud-based location. This ensures easy access for your team, protects against data loss, and helps you always be audit-ready. Most cloud platforms also offer permission controls and activity logs, which increase data security.

Having a structured approach in place helps reduce stress, improves accuracy, and keeps your finance team in control during one of the busiest times of the year.

While there are steps you can take in advance for an easier and smoother tax season, even the most experienced finance professionals can feel the pressure. Tight deadlines, last-minute questions and the sheer volume of work alone are enough to overwhelm your team.

Working as a team is a must to reduce stress and create a more manageable and productive environment.

Aside from all the actions you can take before tax season hits, working as a team is a must to reduce stress and create a more manageable and productive environment. For that, the right structure needs to be in place. Here is a step-by-step guide to help you and your team during this time.

1. Distribute the workload strategically
   Start by clearly assigning ownership of key tasks. Whether it’s reviewing reports or liaising with external auditors, clarity helps reduce duplication and missed steps. Breaking down large tasks into smaller, manageable milestones will avoid bottlenecks.
2. Set internal deadlines earlier than necessary
   Build buffer time into your tax prep schedule. Setting internal cut-off dates ahead of official government deadlines gives your team more time to review, adjust, and respond to surprises. It also gives external partners like auditors or tax consultants enough time to support you effectively.
3. Use automation to reduce repetitive work
   Rely on tools that automate low-risk, high-volume tasks such as expense reconciliation or policy checks. Rydoo’s Smart Audit flags out-of-policy expenses automatically so finance teams can focus on reviewing only the items that truly need attention.
4. Collaborate closely with accounting partners
   If your team works with external accountants, auditors, or tax advisors, keep communication channels open. Share documentation through secure cloud platforms and schedule regular check-ins to align priorities, address concerns, and avoid end-of-season rush.
5. Encourage breaks and set realistic expectations
   While it’s a busy time, burnout helps no one. Encourage your team to take breaks, flag when they’re at capacity, and support each other through the busiest weeks. Giving your team the power to speak up and creating space to listen helps build trust and resilience.

Tax season will always be busy for finance teams, but it doesn’t have to be stressful. With the right strategy, structure, and tools, finance leaders and teams can turn what’s often a reactive period into a proactive opportunity to improve control, compliance, and efficiency.

With the right mindset and modern tools, tax season can shift from a source of stress to a moment of clarity and control. By investing in preparation and technology, leaders can confidently guide their teams through tax season and start the new fiscal year on a strong footing.