28th Annual Tuesday & Wednesday, January 29‐30, 2019 Hya� Regency Columbus, Columbus, Ohio Workshop I Staying Competitive in Today’s Technology-Driven, Globally-Connected World … Indirect Tax Solutions Tuesday, January 29, 2019 1:45 p.m. to 2:45 p.m.
Biographical Information Scott Billadeau, President, DSTax, LLC 4320 Winfield Rd., Suite 200, Warrenville, IL 60555 630.862.9552 FAX: 630.839.0621 scott.billadeau@dstax.com Scott has extensive knowledge and experience in implementing indirect tax automation solutions such as Thomson Reuters ONESOURCE Indirect Tax Determination, Taxware and Vertex. He has implemented these solutions for multiple ERP and legacy accounts payable systems. Before joining DSTax, Scott gained valuable experience as a Senior Manager with a “Big Four” firm and as the Midwest Regional Sales & Use Tax Leader for a national accounting firm. His expertise for the past several years has been focused on project management of indirect tax solutions for large corporations with complex indirect tax requirements. Combined with Chris Pounds, Scott & Chris have almost 50 years of sales/use tax consulting experience. Chris Pounds, Principal, DSTax, LLC 4320 Winfield Rd., Suite 200, Warrenville, IL 60555 773-209-3086 FAX: 630.839.0621 chris.pounds@dstax.com Chris’ primary responsibilities consist of applying his sales and use tax expertise in the development of our clients’ functional design, system configuration and user acceptance testing. Before joining DSTax, Chris gained valuable experience at a “Big Four” firm in both their tax outsourcing practice and as a manager in their State & Local Tax practice.
Factors to Consider in Shopping for an Indirect Tax Solution
OBJECTIVE At the end of this session, attendees will understand the factors to consider during the indirect tax automation software evaluation process, as well as the lifecycle of the typical implementation.
AGENDA • Introduction • Benefits of Automating the Sales and Use Tax Function • Factors to Consider: Project Cost Components • Factors to Consider: Tax Scope • Factors to Consider: Source Systems and Integrations • Factors to Consider: Hosted vs. Premise • Factors to Consider: Software Vendors • Factors to Consider: Compliance and Other Ancillary Tools • Typical Implementation Lifecycle • Coordination with an ERP Implementation • Implementation Partners • Q&A
INTRODUCTION: PRESENTERS Scott Billadeau, Principal • Scott has extensive knowledge and experience in implementing indirect tax automation solutions such as Thomson Reuters ONESOURCE Indirect Tax Determination, Taxware and Vertex. He has implemented these solutions for multiple ERP and legacy accounts payable systems. • Before joining DSTax, Scott gained valuable experience as a Senior Manager with a “Big Four” firm and as the Midwest Regional Sales & Use Tax Leader for a national accounting firm. His expertise for the past several years has been focused on project management of indirect tax solutions for large corporations with complex indirect tax requirements. Chris Pounds, Principal • Chris’ primary responsibilities consist of applying his sales and use tax expertise in the development of our clients’ functional design, system configuration and user acceptance testing. • Before joining DSTax, Chris gained valuable experience at a “Big Four” firm in both their tax outsourcing practice and as a manager in their State & Local Tax practice.
BENEFITS OF AUTOMATION • Companies with multi-state or international activities have incredibly complex tax rules they are responsible for tracking and complying with. • For companies with high volumes of transactions, it is impossible to review each transaction individually. • State authorities are becoming increasingly strict regarding the allowance of exemption certificates. A properly automated solution improves this compliance. • Tax automation software vendors maintain tax rates and tax laws across all jurisdictions, relieving you of this burden.
BENEFITS OF AUTOMATION • Software vendor supported rates and rules • Specialized tax reporting allows for improved tax analysis and easier routes to provide required information to auditors. • A flexible solution allows you to correct for costly audit findings on future transactions. • Compliance tools allow for more efficient tax preparation, freeing up valuable internal resources. • The Wayfair ruling is dramatically increasing the nexus risk and compliance burdens of many companies.
COSTS OF AUTOMATION • Tax Engine Software fees: • Software license • SAAS • Other • Integrations • Supported integrations • Custom developed as a service • Implementation costs • Third-Party Certified Implementation Partner (DSTax) • Internal resources, hardware, additional software, other
FACTORS TO CONSIDER: TAX SCOPE Determining the tax scope of the project should be the first step in the evaluation phase. • What countries are in-scope? U.S. only, EMEA, Global, etc. • What transactions are in-scope? A/R, A/P or both? • Are there special excise, rental or other industry/business specific requirements that should be considered? If your organization requires a solution covering A/R and A/P, across multiple countries, you may wish to consider a phased approach.
FACTORS TO CONSIDER: SOURCE SYSTEMS There are also technical considerations to consider during scoping. Most companies have multiple order/and billing systems. • ERP’s (Oracle, SAP, MS Dynamics, NetSuite, etc.) • Legacy systems (may require custom integrations) • eCommerce platforms (Magento, Shopify, etc.) • Quote systems Which of these systems do you intend to integrate with your tax solution?
FACTORS TO CONSIDER: SOURCE SYSTEMS In addition to identifying the source systems to be included in the scope, a decision must be for each as to whether they should be live calls or batch feeds.
FACTORS TO CONSIDER: SOURCE SYSTEMS Live Integration • A real-time “call” between your source system and the tax engine. • Benefits • Results in immediate tax calculation and automated accounting back to your source system • Vendor Tax validation proactively
FACTORS TO CONSIDER: SOURCE SYSTEMS Batch Integration • A batch of transactions that are organized and consolidated into a flat file and loaded periodically (frequently nightly) into your tax engine • Viable solution in the absence of a standard integration. Each source system should be evaluated independently for this decision. • Most software vendors offer a standard batch solution as part of their menu of products.
FACTORS TO CONSIDER: HOSTED vs. PREMISE Hosted (Cloud) Solution • The software vendor hosts the tax engine on their services • Also automatically updates the software, rates and rules and stores all historical transactional information on their servers. Premise-based solution • Installed on your servers • All hardware and software maintained by internal IT resources
FACTORS TO CONSIDER: HOSTED When the software vendor is responsible for the hosting of the solution: Pro's Con's No additional IT infrastructure is required. Relies on the vendor’s infrastructure vs. your No installation effort, though own. implementation tasks still need to be Some companies have policies against any customer data being stored outside of their completed. Patches and updates are applied by the internal firewall. May be associated with higher licensing fees. vendor.
FACTORS TO CONSIDER: PREMISE When your organization is responsible for the hosting of the solution: Pro's Con's Your organization maintains control of the Your organization may require additional application and it's infrastructure. infrastructure. All data is behind your firewall. Your organization will be responsible for the May have lower licensing fees. maintenance of the tax engine. There is a nominal installation effort.
FACTORS TO CONSIDER: Software Vendors There are various tax automation software vendors in the marketplace. While all vendors serve the same overall function, each has their own advantages and disadvantages. Key market leaders for manufacturers include: • ONESOURCE Indirect Tax Determination (“OSITD”) (formerly known as Sabrix) • Vertex O • Sovos (formerly known as Taxware) Note: There are other tax engine vendors, as well such as Avalara, TaxJar, and CCH. They may be better suited for simple sales side integrations vs. larger global ERP solutions for manufacturers.
FACTORS TO CONSIDER: Software Vendors Tax Engine Hosted and Standard VAT Standard If/Then Reporting Premise US Content Functionality Connectors for Logic Options Most Major ERP's Thomson Reuters Yes Yes Yes Yes Yes Yes ONESOURCE Vertex O Yes Yes Yes Yes Yes Yes Vertex Q No Yes No Yes No Yes Tax Rates Vertex L No No Yes No Yes Only Sovos Yes Yes Yes Yes Yes Yes Determination
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