TM1 is our proprietary tax modeling tool that we utilize in the delivery of our transaction tax
co-sourcing services. Our core service offering, which is based on batch extracts from the host procurement systems, utilizes
the actual data attributes of each independent purchase to determine true taxability. This methodology ultimately yields the most
accurate taxability decision available in the marketplace today.During the initial setup, we work with a combination of your tax, procurement, billing, IT infrastructure, and G/L accounting departments to define the exact requirements needed for the tax data extraction process (typically from ERP systems such as Oracle, SAP, J.D. Edwards, etc.). This extraction process, designed to run at specifically defined intervals, will produce the necessary output files that will automatically be transmitted, via a secure file transfer protocol, to our world-class data center.
Once received, the data files are immediately cataloged, imported, processed, and reconciled. TM1 then automatically applies a taxability decision to all procurement transactions by creating a tax policy mapping between the specific tax law and the accounting distributions assigned to the transactions. We commonly refer to this as our Tax Decision Logic (TDL). Furthermore, each TDL is proprietary to DTS and is uniquely configured for each of our clients during initial implementation.
Once processed, our experienced team of transaction tax professionals initiates a series of client-specific analytics on the data. TM1, unlike the current tax engine technologies, will not apply tax defaults in the case of any unmapped tax policy. Instead, the system is configured to "flag" all such transactions, which will then be reviewed and manually processed by a DTS tax professional. Furthermore, since the TDL is updated in conjunction with the processing of each flagged transaction, it allows the solution to continually enhance the accuracy of the overall service.
We then provide the results of the analytics, flagged transaction processing, and TDL configuration updates back to our clients through interactive reporting, presented through a secure Web portal. At the end of each reporting period, we provide pretax accrual reporting back to the client for review and approval. Once approved, we execute a reverse batch process generating the tax liability file, which can then be automatically uploaded into the client’s general ledger system.