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WHAT IS THE BEST WAY TO MANAGE LOCAL COMPLIANCE?
SIMON WATSON | BDO GUIDO OUDEJANS| TOMTOM RALPH GEERTSEMA | BT Shared Services & Outsourcing Week, Amsterdam
May 2012
Copyright © May 12 BDO LLP All rights reserved
Panel discussion
AGENDA
Introductions
Context
Panel discussion
Questions
BDO INTERNATIONAL
5th BDO International is one of the world’s five largest accountancy networks
48,000 Over 48,000 partners and staff world wide
1,100 More than 1,100 offices
135 Present in more than 135 countries
$5.7bn Total combined fee income of US$5 7bn (2011)
Flexible characteristics of local firms, supported by world-wide network and strength of a global player
THE LEADING ALTERNATIVE TO ‘BIG-4’
BDO outsourcing services International compliance VAT returns Local statutory accounts Statutory audits Corporate tax returns Corporate housekeeping Payroll
Local accounting Management accounting Advice on trading entities Company registration Acting as local directors Setting up and operating
bank accounts
CLIENTS FROM ACROSS THE GLOBE
Global outsourcing services for BT Global Services
90 countries worldwide
Payroll and supporting services including treasury for a FTSE 100 pharmaceutical firm
38 countries across all regions
Statutory accounts, VAT, CIT service and Global service co-ordination
50 countries worldwide
Full scope (including payroll, back office, CoSec, bank signatory etc.) 25 EMEA countries
Stat accounts, direct & indirect tax
120 countries in North America, EMEA and Asia Pacific regions
Statutory accounts, tax, company secretarial and payroll for US technology business 20+ countries worldwide
BDO COMPLIANCE SURVEY 2011 Which factors are most important to you when considering local compliance?
0
10
20
30
40
50
60
70
80
Avoiding localpenalties
Improvingvisibility and
control
Reducing costof compliance
Reducing risk Affects thebusiness case
for SSC
Access to localknowledge
Local presencefor tax audits
Reducingmanagement
time inresolving local
issues.
Other other comm
bel
BDO COMPLIANCE SURVEY 2011 Which model does your company most use for local, in-country compliance?
0
10
20
30
40
50
60
Mainly use in-housestaff in each
country
Different providersin each country
Our SSC does localcompliance from a
central location
Our BPO providerdoes local
compliance from acentral location
Single, globalprovider withoffices in each
country and centralcoordination
Not sure
BDO COMPLIANCE SURVEY 2011 Which challenges have you experienced with local staff involved with compliance?
0%5%
10%15%20%25%30%35%40%45%
Career structurefor remaininglocal finance
staff
Cover for in-country staffinvolved withcompliance
Retention of keystaff
Recruitment ofstaff with the
right skills
Part-rolesconnected with
complianceaffect the
business case forSSC
None
BDO COMPLIANCE SURVEY 2011 Which other challenges have you experienced with local compliance?
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Lack ofvisibility overlocal filings
Difficultycoordinating
multiplelocal
suppliers
High cost oflocal
compliance(eg. fees or
internal)
Penalties forlate or
incorrectfiling
Lack ofpractical
advice overchanges in
localregulation
Fines or legalproceedings
for localdirectors
Distractionfor central
managementresolving
localcomplianceor serviceproviderissues
None
TomTom FSSC May 2012
SSOW Event Amsterdam
Personal Profile
10
Professional Experience
Current:
VP Finance at TomTom (July 2010 – Present)
Previous:
Interim Manager at Guido Oudejans Interim Management & Consultancy B.V. ( 2008 – 2009)
Director at Deloitte (July 2002 – December 2003)
Director at Andersen (August 1987 – June 2002)
›
›
›
›
›
Director at PricewaterhouseCoopers Global Compliance Services (January 2004 – November 2007)
12
WORLD LEADER IN LOCATION AND
NAVIGATION PRODUCTS
AND SERVICES
OVER 3,500 EMPLOYEES WORLDWIDE
BASED IN AMSTERDAM
12
TomTom app for iPhone/iPad
8
TomTom IQ Routes
Spoken street names
Map share technology
Latest map guarantee
Advanced lane guidance
Celebrity voices
TomTom speed cameras
TomTom HD Traffic
16
Tracks run data (time, distance, heart rate etc.)
Run history and reminders
Connects with world’s largest running club
Easy to use
SportWatch by Nike and TomTom
18
Line-fitted and aftermarket
20
Business Solutions = More than navigation
Be in touch with drivers and cars Know what’s going on in your fleet Help people to work more efficiently Improve your business performance
Navigation
Communication
Fleet management
Leveraging the TomTom assets and brand for business
22
Product portfolio TomTom Licensing
Portable and wireless
Government, Internet, logistics and transportation
Retail and insurance Financial services
24
(in € millions)
Revenue Net results
0
400
800
1,200
1,600
2,000
2005 2006 2007 2008 2009 2010 2011
720
1,364 1,737 1,674
1,480 1,521 1,273
0
100
200
300
400
2005 2006 2007 2008 2009 2010 2011
143 222
317
175*
87 108 68
Key financials profit & loss metrics
26
Concord
Redwood City Southfield
Mexico City
Sydney
Taipei Shanghai
Tokyo
Pune
Kuala Lumpur
Jakarta
Lebanon
Irene
Singapore
Bangkok
Employees
50 – 200
5 – 50
> 200
Eindhoven
Madrid
Paris
Edinburgh
Istanbul
Ghent
Copenhagen
Calne
Milan
Munich Zurich Budapest
Berlin
Leipzig Prague London
Amsterdam
Lodz Warsaw
Moscow
Harsum
Stockholm Helsinki
Amersfoort
Vienna
Lisbon Seoul
Nagoya
Our offices
Sao Paulo
27
Our Finance Organisation In TomTom financial shared services we have the functions AP, AR, GL, Procurement, and Payroll. Geographically, we have organised the finance support functions as follows:
EMEA: Amsterdam SSC. 60 Heads
• Asia: Decentralised model. Coordination team in Singapore. 20 Heads
• Americas: Decentralised model. 10 Heads
At Corporate level we have the functions Group Tax, Group Treasury, Group Accounting & Control
Our accounting runs on SAP and reporting is under IFRS
› ›
›
28
Compliance model - Current The TomTom Group compliance landscape – SFS and CIT filings - looks as follows:
EMEA: 40 filings
APAC: 26 filings
Americas: 8 filings
On top of this, we have indirect tax, payroll and statistics filings.
The filings are organised as follows:
Dutch filings
Foreign filings Outsourced to
multiple service providers
In-house / Outsourced
›
› ›
29
Why Outsourcing
› Core service by provider (TomTom is in navigation business)
Knowledge management (IFRS <-> Local GAAP) ›
› Risk appetite (focus)
Global reach service provider (uniform approach/support to local audits)
Coordination & reporting services (one team/one contract)
›
›
We started working together with BDO in 2010. BDO provides TomTom with SFS and CIT services in a number of countries. Local delivery, coordinated through their Amstelveen office. Dashboard provides filing status and acts as central repository.
30
Challenges
Transition path: Requires proper support and scoping. Ie who remains responsible for pending, potentially overdue filings. The current or new provider
Global reach: Presence in all of the countries? How strong is a partner provider or a network office in a country. Is compliance core business to a local partner or office. Differences in quality exists
Tier 1 vs Tier 2: Choice of audit firms in Tier 1. Choice may become more limited if compliance is performed by Tier 1 firm. Tax advisory vs Tax compliance
Ultimately, the corporate is responsible for its filings
›
›
›
Next steps
31
› Bundle - Concentration of compliance filings with selected number of providers
› Standardise - Uniform input data provisioning (One Pack)
› Optimise - Fit of compliance dashboard to TomTom reporting model
› Control - Align checks & balances TomTom with service providers
Shared Services and Outsourcing Week, 2012
Ralph Geertsema, BT
Placing compliance environment in a standard outsourcing grid
Complex H
igh
Ris
k
Easy Lo
w R
isk
Statutory
Reporting
Preparing Stat
Reports
Checking / validating
Transactions
Local
VAT/Tax
filing
BT Compliance environment considering the Long Tail…
CENTRALIZED LOCAL
Statutory Reporting Small
Country Operation
MEA & APAC
US Major Hub
Large European
Entity model
.....
OUTSOURCED
IN HOUSE
Local Co-Source In house
Local Outsourcing to E&Y / BDO
Legacy situation
Possible areas to develop
CENTRALIZED LOCAL
Statutory Reporting
OUTSOURCED
IN HOUSE
1
2
AGENDA
Introductions
Context
Panel discussion
Questions