Date post: | 20-Oct-2014 |
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Technology |
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Outsourcing tax preparation – a growth model for small firms
Joseph P. Manzelli Jr. CPA.CITPCoordinator of Outsourced Workflow
Doubletree Suites Phoenix, AZJuly 17, 2013
Agenda
• Background– Joe Manzelli– XCM Solutions & Xpitax LLC
• The Tax Process – How can it be Optimized• Workflow what is it?• Outsourcing as a Tool• Demo of XCM software
History of XCM / Xpitax
• Founded in 2001 as an outsourcing company by accountants for accountants
• Pioneer in the outsourcing model (tax & bookkeeping)
• Unique in Industry– Own Dedicated Facility in India– Only Patent Holder in the Outsourced Space– XCM – Automated Workflow Process
History (cont’d)
• Growth to 25 US Employees & 125 employees in India
• 500+ accounting firms & 28,000 XCM users• Prepare 15,000 to 18,000 returns for firms
– Over 28,000 in 2007 (Section 7216 came along)
• Doing More With Less– Economy– Fee Pressures– Increased Regulation– Condensed Tax Season– Rapidly Changing Technology
Our Industry Today
• Efficiency• Redundancy• Transparency• Accountability• Consistency• Timely Communication
Common Pains
Tax Process
• Collect source documents• Scan? Copy?• Prepare – data entry• Questions – missing information• Review• Collate & send• E*file
American Institute of CPAs
Manual Process
American Institute of CPAs
Scan tax return and source documents
Store in DMS
Refined Process
American Institute of CPAs
Prepare Return
Electronic List of Missing
Information
Optimized Process
What is workflow?Process standardization & automationKnowledge managementAccountabilityIndividual work managementResource managementTeam collaborationCompliance & QCEase-of-use/ScalabilityImplementation & trainingSystem, integrationCost
Process Automation
Pre-defined statuses that can be turned on and offCustom statusesLinear and horizontal processesWorkflow mappingQuality control alertsManage re-occurring activitiesManage bulk processesAutomatic project creation/Roll forward
Knowledge Management
Robust reporting – standard & customException and bottle neck reportsProject-related files and detailsEasily searchable and actionable dataQuestions, review points, instructionsAutomated archiving and purgingAnnual comparisons
Accountability
Staff developmentStatus details on a particular projectView all WIP, or specific workloadFirm-defined user rights
Individual Work Management
Virtual desktopAbility to organize, assign difficulty and prioritySupport scheduling/work assignmentAssign individual or group roles, skills and expertiseTime summary support
Resource Management
Move responsibility within teamCross-team collaborationSupport question/review cycleReal-time workload balancingIntegrated schedulingBudgeting support
Compliance and Quality Control
Full tracking capabilitiesFull due date management capabilitiesCustomizable sign-offsQuality control checks and exception alertsExtension trackingE-File process managementCustomizable checklistsSupport for data retention policies
Ease-of-Use/Scalability
Intuitive interfaceLogical designSmall learning curveAdaptable to current process and anticipated future needsFlexible and scalable – roll out to additional users, processes, departments, officesBalance between built and build
Implementation & Training
Complexity of infrastructure deployment and administrationCustomary implementation timeIT involvementTraining – basic and intermediaryOngoing training and best use opportunitiesFlexible training optionsDedicated support resourcesFeature upgrades/enhancementsVendor reputation
System Considerations
Vendor’s reputationEasy maintenanceRemote user support & mobile accessMulti-office supportFirm-wide systemDocument storage integrationPractice management integration
Cost
Base product pricingLength of contractAvailability and price of optional capabilitiesAdministrative costsTraining costsPotential impact on head count/overtimePotential impact on user productivity and departmental efficiency
Available Products
• OfficeToolsPro• SharePoint• Thomson FirmFlow• CCH Workstream• XCM Workflow
Outsourcing - Driving Factors
Benefits of Outsourcing
• Staffing Resource– Year round access to unlimited resources
• Improve Quality and Consistency• Standardize & Automate the Process• Grow Practice Without Increasing Overhead• Improve Client Service – Increase Turnaround Time• Improve Quality of Life• Increased Profitability
Xpitax Teams
• Tax & Bookkeeping Compliance Officers (US Based)
• India Dedicated Team- Supervisor: 5-7 years, C.A.- Preparers : 1-2 year graduate
Outsourced Process Basics
Benefits – Enhanced Client Service
Outsourcing = Time for New Opportunities
Consulting Niche Building Specialization Higher Value Services
Benefit – Client Loyalty
Number of Services 10 Year Retention Rate
1 12%
2 24%
3 63%
4 81%
5 98%
Source: Allan Koltin Presentation
What to Outsource
Data Intensive Tasks Individual returns Corporate Returns, Partnership and Fiduciary Returns Bookkeeping Services Write-Up Services Accounts Payable/Receivable Financial Analysis Reports Workpaper & Financial Statement Conversions and Rollovers
What to Retain
High-Value, High-Touch Client Service New Business Consulting Strategic Forecasting & Budgeting Business Valuations Tax Planning Corporate Financing Business Succession Estate Planning Wealth Management/Financial Advising
Issues & Obstacles
• Security• Loss of control over return• Taking away jobs• Quality/Training – India background• Perception / Client Reaction
Security - Privacy
• Data never leaves U.S.• Secure buildings in India• Printing / scanning not allowed• Utilize access of accounting firm’s software &
network
Demo of XCM in action
We will utilize a live demo site & see XCM in action.
I can provide screen shots to anyone who desires them. I will have this presentation up on Slideshare. All Information on how to get screen shots or this presentation will be provided at our conclusion.
© 2014 Xpitax Effective November 1, 2013
2014 Xpitax PricingOutsourced Tax Returns – Xpitax has a multi-tiered pricing schedule based upon complexity of returns.
Service Tier 1 Tier 2 Tier 3 Tier 4
Individual $63.001 – 12 pages
$142.0013 – 60 pages
$194.0061 – 125 pages
Add $53.00Each add. 50 pages
Corporate, S-Corp & Partnership $100.001 – 25 accounts
$142.0026 – 50 accounts
$194.0051 – 100 accounts
Add $53.00Each add. 50 accounts
Fiduciary $63.001 – 12 pages
$142.0013 – 60 pages
$194.0061 – 125 pages
Add $53.00Each add. 50 pages
Bookmarking $13.001 – 50 pages
$23.0051 – 100 pages
$32.00101 - 150 pages
Add. $5.00Each add. 50 pages
990 Tax Exempt $184 all returns
1) Prices for individual and fiduciary returns are based upon the total number # of scanned pages submitted with the tax data file (i.e. organizer and original documents). Scanned documents must be actual size of original document.2) Xpitax has a minimum annual service fee of $7,500.4) Xpitax will quote the price of returns which do not fall within any of the pricing categories noted above.5) Schedule D - as a default policy – Xpitax does not input transaction details (input the Summary Data). There is a surcharge for inputting detail as follows: first 10 transactions – no additional cost, 11 to 100 Transactions – surcharge assessed equal to next task tier, each additional 100 Transactions – surcharge assessed equal to next task tier. 6) Business tax returns - we require that firms provide us with an adjusted trial balance. If the M-1 adjustments are not easily identifiable on the Adjusted Trial balance, we also require a schedule detailing specific items that impact taxable income. 7) This Xpitax Pricing schedule is based upon firms providing us with a rolled over tax data file. For those clients that need to be keyed from scratch (i.e. new client to firm, data isn’t currently in your tax software) there will he a surcharge assessed to the next task tier. However we will key the prior year return, so that it can be rolled over, at no charge within the months of May – January.
Domestic Pricing: Pricing for domestic tax returns during the period from January to April 15 th is equal to two time (2x) the offshore pricing noted above.
© 2014 Xpitax Effective November 1, 2013
2014 Xpitax PricingOutsourced Tax Returns – Xpitax has a multi-tiered pricing schedule based upon complexity of returns.
Service Tier 1 Tier 2 Tier 3 Tier 4
Individual $63.001 – 12 pages
$142.0013 – 60 pages
$194.0061 – 125 pages
Add $53.00Each add. 50 pages
Corporate, S-Corp & Partnership $100.001 – 25 accounts
$142.0026 – 50 accounts
$194.0051 – 100 accounts
Add $53.00Each add. 50 accounts
Fiduciary $63.001 – 12 pages
$142.0013 – 60 pages
$194.0061 – 125 pages
Add $53.00Each add. 50 pages
Bookmarking $13.001 – 50 pages
$23.0051 – 100 pages
$32.00101 - 150 pages
Add. $5.00Each add. 50 pages
990 Tax Exempt $184 all returns
XCM and XCM Outsource License Fee•There is no cost for firms submitting returns or other engagements/projects for processing through “XCM Outsource.”•There is a $375.00 per user fee for use of “XCM.” XCM provides custom home pages for each person in your firm and allows use of product for tasks/returns processed internally.
Training and Consulting Services•On-line Tutorial – Free•Web-based Training - $800/annually for up to 5 sessions•Web-based Firm Specific Training - $750/per session•Live On-Site Training - $2,500 per day plus out-of pocket expenses
Questions?
Twitter - @joemanzwww.slideshare.net/joemanz13
781-519-9317639 Granite Street
Braintree, MA 02184