www.ryan.com january 17, 2012 tei - nebraska chapter meeting effective process improvement
TRANSCRIPT
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www.ryan.comJanuary 17, 2012
TEI - Nebraska Chapter MeetingEffective Process Improvement
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Process Improvement
John FioreDirector
Chicago, IL
Anne GiffelsSenior Project Manager
Chicago, IL
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Determining Your Starting Point
Where should you focus your time and budget?
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Attribute Examples
High Level of Integration • Compliance and provision technology configuration is matched
Tax Sensitized Source Data
• High percentage (>50%) of book-tax differences are automated
• Very little manipulation of data after it is received
Company Recognition • Tax is included in M&A due diligence
Focus on Effective Rate • Materiality and a risk-based approach to preparation and review
Continuous Improvement
• Ongoing process improvement workplan that is updated every year
What are Best Practices?
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• Short-term– Immediate results– Build momentum– Foundational
• Long-term– Two to five years– Strategically focused– Company supported
Establish a Vision
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Approaching the Process Review
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Questions for the Audience
How are you currently scheduling and communicating process improvement initiatives?
Which tax department attributes are you focused on improving in your one-year and five-year plans?
What steps are you taking to maintain the energy for continuous process improvement?
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Marketplace ObservationsYou w
ant to be here.
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Starting with the Data
–Start with the Data
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Estimated payments from business units
M&A Activity (basis, sales
price) - Finance
Partnership bonuses from business units
Sales by state from business
units
SAP - G/L
Compliance Tool
Payroll Dept. - officer
compensation
Subsidiary G/L
FAS - intercompany
reports
SAP - G/L
K-1 for outside partnerships
SAP - Total Sales
SAP - Payroll
FAS - property by state
SAP - Franchise tax information
Provision to return
reconciliation
Treasury/holding company G/L
Miscellaneous tax credits
Estimated payments from business units
Budgeting / forecast
information from ??
Spreadsheets for Provision
Spreadsheets for Return
–Understand the Process
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Provide Visibility
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Key Considerations
• Evaluate Your Technology – Improve or Replace– Compliance– Provision– Document Management– Calendar
• Automate Book-Tax Differences– Provision– Return
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Technology Evaluation
• Define Your Requirements– What You Need vs. What the Current Software
Provides• Rank the Requirements– Must Have– Should Have– Would Like to Have
• Evaluate Your Technology Against Your Requirements– Identify Gaps– Identify Matches• Next Steps– Evaluate Other Software?– Request Additional Modules and/or
Improvements?
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Book-Tax Difference Automation
• Prepare a List of Your Book-Tax Differences– Brief Description of the Calculation– Data Sources
• Separate Into Groups– Reversal of Book Expense – Full or Partial– Change in Balance Sheet Balance– Change in Balance Sheet +/- Payments– Scheduled– Other
• Weighted vs. Unweighted
• Map Into Matrix– Simple or Complex Calculation– Simple or Complex Data Source(s)
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Book-Tax Difference Visibility Chart
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Examples of Improvements to Undertake
• Book-Tax Difference Visibility• Book-Tax Difference Automation• Debrief – Provision, Compliance, Data
Collection, Audit Closing• Technology Evaluation – Provision,
Compliance, Workflow, Tax Data Warehouse• Technology Training• Implement/Improve Compliance Technology• Implement/Improve Provision Technology• Document Retention Evaluation• Document Retention Improvements
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Planning for Improvement – When?
Jan
Feb
March
April
May
JuneJuly
AugS
ept
Oct
Nov
Dec
2nd Q Estimated Payments
1st Q Estimated Payments
Return Extensions
YE Provision
Q1 Provision
Q2 Provision
3rd Q Estimated Payments
Begin ReturnsQ3 Provision
Federal Returns Due
State Returns Due
4th Q Estimated Payments
Process Improvements Project List• Book-Tax Difference Visibility• Book-Tax Difference Automation• Provision Debrief• Data Collection Debrief• Compliance Debrief• Provision Technology Evaluation• Compliance Technology Evaluation• Technology Training• Implement/Improve Compliance
Technology• Implement/Improve Provision Technology• Document Retention Evaluation• Document Retention Improvements
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• Normal Activities– Year-End Provision
• To Do List– Provision Debrief
What worked well? What needs to
improve?
January
Jan
Feb
March
April
May
JuneJuly
Aug
Sep
tO
ct
Nov
Dec
YE Provision
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• Normal Activities– Data Collection for Tax
Returns– Prepare for Compliance– File Extensions
• To Do List– Complete Compliance
Implementation/Improvement
February/March
Jan
Feb
March
April
May
JuneJuly
Aug
Sep
tO
ct
Nov
Dec
Return Extensions
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• Normal Activities– Begin Tax Return– Q1 Provision– Q1 Estimated
Payments• To Do List
– Evaluate Provision Software
April
Jan
Feb
March
April
May
JuneJuly
Aug
Sep
tO
ct
Nov
Dec
Q1 Estimated Payments
Q1 Provision
Begin Returns
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• Normal Activities– Continue Preparation of
Tax Returns– Q2 Estimated
Payments– Q2 Provision
• To Do List– Implement Provision
Software
May/June/July/AugustJan
FebM
archA
pril
May
JuneJuly
Aug
Sep
tO
ct
Nov
Dec
Continue Returns
Q2 Estimated Payments
Q2 Provision
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• Normal Activities– Complete Federal
Return– Q3 Estimated Tax
Payments• To Do List
– Implement/Improve Federal Tax Packages
– Federal Compliance Debrief
September
Federal Returns Due
Q3 Estimated Payments
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• Normal Activities– State Returns Due– Q3 Provision
• To Do List– Evaluate Tax
Compliance Technology
– State Compliance Debrief
– Plan for Year End– Implement/
Improve State Tax Packages
October
Q3 Provision
State Returns Due
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• Normal Activities– Q4 Estimated
Payments• To Do List
– Implement Changes for Year End
– Automate Book-Tax Differences
– Implement Compliance Software
November/December Q4 Estimated Payments
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How Much Time Do You Need?
Process Improvement Initiative Duration Effort
Provision/Compliance Debrief 1 Week 1 Day
Technology Selection 3–4 Weeks 5 Days
System Implementation 3–4 Months 3–4 Weeks
Book-Tax Visibility 2 Weeks 2–3 Days
Book-Tax Automation 4 Weeks 10 Days
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Resources
• People– Within Tax– Outside Tax
IT – Utilize Their Project Management Expertise Accounting/Finance Internal Audit
• Process– Workplan– Measurement – What Gets Measured Gets Done– Budget – $ and Time
• Technology– Project Management Tools
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Questions for the Audience
What observations do you have about your current process improvement plans?
How do they fit into the bigger picture of creating a more efficient tax department?
Are there any process improvement experiences, good or bad, that you would like to share?
How do you set priorities among a list of process improvement initiatives, and how do you build process improvement into the calendar?
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Keys to Successful Redesign
• Identify the Root Cause of the Problem, Not the Symptom • Reconnect the Tax Department to the Organization• Shift Resources From Compliance to Value-added Activities• Outsource Appropriate Processes
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Process Improvement is a Process
• The World Series isn't won or lost on Opening Day• Don’t Try to do Everything at Once• Workplan to Stay Focused• Strive for Continuous Improvement• Start with Smaller Projects to Build Momentum• Know the Stakeholders and Make Sure They’re Involved
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• Unrealistic Deadlines– Aggressive
Timelines– Flexible Planning
• Scope Changes– Poorly Defined– Badly Managed
• Risks Not Managed– Identify and Assess– Mitigation
Common Mistakes
• Poor Communication and Collaboration– Competing Priorities– Silos
• Stakeholders Not Engaged– Not Properly Identified– Excluded
• Undefined Goals and Objectives– Share the Vision– Repeat Often
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• Trust the Team– Include the Team to Set Timelines and Scope – Bottom-Up, Not Top-Down
• Face Your Fears– Don’t Focus on the Benefits at the Expense of
Identifying the Problems– Prepare Mitigation Plans
• Communicate, Communicate, Communicate– Weekly or Bi-Weekly Status Reports– Regular Steering Committee Meetings
How to Avoid the Mistakes
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Where Do You Want to Start?
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Meaningful and Lasting Improvements
• Employ a dynamic combination of approach, expertise, experience and style that positions us to deliver sustainable results
• Provide an integrated and total solution to the tax process needs of our clients
• Recognize there is no single element, no simple formula, for achieving successful change and that each solution is as unique as each client
• Demonstrate that capability and knowledge transfer are key, so that tax processes can continually improve after the project is complete
• Engage professionals throughout the process to manage change and build ownership and support for lasting results
• Focus on results that bring meaningful change to your organization
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Questions?
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