Compare Our Technology and You'll See the Difference
We manage transaction taxes differently than any other software or service provider.Until now, nobody has ever offered a co-sourced transaction tax solution that marries world class proprietary technology with "hands on" transaction tax consulting. Below is a matrix that illustrates how our technology and delivery method differs from a typical tax engine software implementation that uses complex and expensive integration techniques:
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Features |
TAX Manager 1SM |
Traditional Tax engines |
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DESIGN
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Integration with Host Financial Applications |
Batch – Non-intrusive, less costly, low maintenance, low risk |
Real-time implementation is expensive, high overhead maintenance, high risk of failure |
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Implementation Approach |
Hosted – No software license, no hardware, fewer infrastructure requirements; Monthly content updates automatic |
Delivered Software – Annual licensing and content, hardware expensive, high overhead, manual monthly content updates |
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Application Purpose |
Assign taxability based on nature of transaction; provide high visibility to transaction, results; maximize user input; System of Record for SUT |
Automate taxability, minimize user input |
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TAX DECISION LOGIC |
Logic to Derive Taxability |
Synchronized Tax Attribute Assignment Routine (“STAAR”) matrix that uses combination of transaction classifications and multiple data elements to derive nature of transaction; results mapped to tax content and rates |
One-to-one tax policy mapping: only vendor/product/material group codes are mapped to tax category codes |
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Accuracy |
100% process rate – all transactions are processed. Transactions are configured as either taxable, exempt, or no tax. No assumptions regarding taxability |
Assumption-based – All transactions are assumed taxable unless mapped to an exempt/no tax configuration. High likelihood of errors. |
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Configuration Maintenance |
Dynamic – adjustments to configurations required based on data throughput. Configurations adjusted in production (batch process) |
Fixed – configurations set on implementation. Configuration adjustments required to go through development progression to production (real time to ERP). |
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Evaluates “Nature” of Purchase Transaction |
Yes – “who”, “what”, and “how” of transaction in TDL matrix |
No - only considers the “who” and “what”. “How” only considered using separate function that must be used sparingly due to performance degradation associated with real-time processing. |
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% of Transactions Processed by System |
100% |
Estimated less than 50% - depends on integration design |
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Reconciliation |
4-way Matching: Host procurement data, tax engine data warehouse, G/L accrual, compliance reporting |
None – since not all transaction are processed through the tax engine, results reconciliation not practical |
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Audits |
Supported – DTS provides audit defense services as part of the service delivery. Possible due to 4-way matching reconciliation |
Not supported – Data for audits comes from host financial systems. Data for compliance reporting comes from tax engine – not reconciled against host financial systems |
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FUNCTIONS |
Tax Suspend |
Supported – Unmapped transactions must be reviewed by DTS tax professional. No assumptions made regarding taxability |
Not supported. Unmapped transactions are defaulted taxable. No review by tax professional. This results in proliferation of errors – typically overpaid tax |
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Reporting |
3rd Party Reporting Tool that stores taxable and nontaxable event information |
3rd Party Reporting Tool that is configured out-of-the-box to store only taxable event information |
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Tax Rate Content |
Provided by 3rd party – no additional charge for content |
Provided by vendor for an additional charge |
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Users |
DTS tax professionals are the users of the system. Clients receive output |
Client’s tax professionals |
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Output |
Reporting, G/L accrual, compliance reporting files |
Real time tax determination |
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Proactive Tax Planning |
Yes – users during configuration adjustments can view effected transactions before applying configuration/ mapping; Moreover, this functionality can be used to forecast tax liabilities |
No – results are not validated until audit time or until manual internal review is initiated |
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COSTS |
Software Cost to Client |
$0 |
Variable based on company size - $30K - $100K annually |
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Internal Infrastructure: Hardware, Software, FTE support |
$0 |
$100K - > $1 million |
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Tax FTE Costs |
$0 |
Variable - $50K - > $1 million |
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Transaction Fees |
Variable, based on transaction volume |
N/A |