STANDARDIZE THE DATA. CONTROL THE PROCESS. TRACK THE CHANGES. CONNECT THE TEAM.
Apportionment data is relied on to meet requirements for provision, compliance, estimated tax payments, planning, and day-to-day decision making. Unfortunately, state apportionment data handling, analysis, and reporting is usually conducted using a manual approach that provides limited (if any) security or controls.
Depending on the number of legal entities considered, the proper level of analysis would likely involve evaluating thousands of combinations - in fact, the number of permutations grows exponentially, and quickly reaches a level that is unfathomable. This level of modeling is simply impossible when armed only with traditional tools such as spreadsheets.
ONESOURCE State Apportionment addresses these challenges by combining unique process improvements with easy-to-use, web-based software. Leveraging ONESOURCE State Apportionment, users are equipped to:
- Drive efficiencies with process transformation
- Implement controls and ensure security compliance
- Gain visibility into the decision process with an automatic, detailed audit trail
- Extend access to data across all tax functions
Your tax department can smoothly evolve its operations, ensuring that apportionment data is consistently handled, best practices are followed, changes are tracked throughout the process, and information is easily shared among all authorized users.
With ONESOURCE State Apportionment, you benefit from:
FEATURES AND BENEFITS OF ONESOURCE STATE APPORTIONMENT
View the presentation to learn about some of the benefits offered by ONESOURCE State Apportionment.
IMPROVE YOUR STATE APPORTIONMENT PROCESS
Based on an open architecture that seamlessly integrates with other systems, including ONESOURCE Income Tax, ONESOURCE State Apportionment provides a single foundation for collecting, consolidating, sourcing, computing, and reporting apportionment data.
Deployable over the web and offering an intuitive interface, ONESOURCE State Apportionment enables tax professionals from any functional area - from any location - to access information exactly when they need it, and at the right level of detail.
Ensure Data Consistency and Single Source of Truth
Offering configurable, web-based tax packages and robust data import facilities, ONESOURCE State Apportionment ensures that apportionment details are collected and consolidated in a consistent manner, streamlines tax package workflow, and reduces the need to manually consolidate and rekey data.
Combining online, secured access with flexible data import, calculations, document tracking, and a consolidated view of filing methodologies, it provides a single source of truth for by-entity, by-group, and by-jurisdiction apportionment information.
Minimize Reliance on Offline Spreadsheets and Standardize Calculation Methods
ONESOURCE State Apportionment calculates apportionment instantly across all the entities in your organization. Pre-populated, yet customizable, tax rules provide enough flexibility to match up with any filing methodology, negotiated position, or industry-specific formula.
Embedded multitier partnership computations and rules for state partnership treatment, group calculation logic delivering by-entity apportionment percentages in group states, and multiyear tax rate tables provide flexibility while ensuring a standard computational methodology that reduces spreadsheet dependency.
Establish Best Practices and Controls
ONESOURCE State Apportionment provides a web-based, controlled framework for collecting, managing, and reporting on state tax apportionment. Easy to use and offering secured access at any time, from any location, it makes apportionment detail and calculations available to all members of the tax organization while ensuring compliance with SOX 404 segregation of duties.
Tax teams are able to transition from a spreadsheet-based, manual operation to one in which best practices are automated, decision making is collaborative, and processes are streamlined.
Track Details Around "Who, What, Why, and When"
ONESOURCE State Apportionment automatically keeps an audit trail of every change, providing the ability to recall data, reports, and calculations at any point in time. Actual as-filed data is always available, even after subsequent or amended returns are filed.
ONESOURCE State Apportionment users can go back to any point in time to compare and contrast the data and simultaneously review comments and attached documentation that supported the decision, the position, and the sourcing methodology.
Manage Critical Information Across the Tax Operation
With ONESOURCE State Apportionment, you can standardize state apportionment data, control the process, and track the changes from collection to reporting - ensuring that the entire tax team has the right information, at the right time, with the right level of detail.
- Provision. As auditors continue to push for detailed by-entity, by-jurisdiction effective rates for state provision purposes, ONESOURCE State Apportionment can provide this level of detail at the click of a button - no extra effort required.
- Compliance. ONESOURCE State Apportionment provides comparative entity and group reports in a familiar compliance style to give users a high level of comfort when comparing controlled, auditable, calculated data from ONESOURCE State Apportionment against the information that finally makes it onto the tax return. Data diagnostics have also been built-in for anomaly checking before filing to help surface nexus issues and filing discrepancies before tax returns go out the door.
- Audit. Requirements to "recreate history" can now be rapidly addressed with the availability of centralized documentation and a comprehensive audit trail. Audit settlements and amended returns can be tracked without corrupting the integrity of the original data.
- Planning. Planning can leverage the ready availability of current apportionment data for strategy and policy analyses, as well as the immediate access to multiyear views of historical data.
7 KEY REASONS TO AUTOMATE YOUR STATE TAX APPORTIONMENT PROCESSES
Has your tax organization implemented controlled processes for gathering, calculating, and reviewing apportionment? Are you able to follow a meticulous audit trail to track all apportionment details on your tax returns back to the original source? Is your apportionment data centralized, of high integrity, and immediately accessible to the compliance, tax accounting, planning, and audit teams?
If you answered "no" to any of these questions, you're not alone.
In fact, our research shows that in the vast majority of corporate tax departments, state apportionment data handling, analysis, and reporting is conducted utilizing a multitude of spreadsheet-based models.
This manual approach provides limited (if any) security or controls, serves up a host of inefficiencies, and dramatically increases the risk of error. Unfortunately, given resource constraints and a lack of viable alternatives, tax operations have, to date, been unable to radically change their current mode of operation.
With today's advancements in technology, however, this situation can change. To get a sense of why it would be valuable to look to automation for managing state apportionment, consider these seven essential benefits:
1. Technology increases efficiencies and reduces the risk of error by minimizing spreadsheet usage.
Today, in most tax departments, labor-intensive, error-prone spreadsheets are used throughout the apportionment process. Unfortunately, these manual methods increase inefficiencies in collecting, consolidating, manipulating, and reporting. Moving to an automated system will reduce - and in some cases, eliminate - reliance on offline spreadsheets because data will be collected directly into the software, calculation logic will be embedded, and most, if not all, rules and rates will also be part of the system.
2. Online tax packages can save countless man-hours by improving data consistency and eliminating the need to perform manual data consolidation.
It is a widely recognized fact that spreadsheet-based tax packages can be easily altered by users - and often are - which introduces a number of inconsistencies into the data collection process. In addition, when data is gathered inconsistently, consolidation of that data becomes more and more challenging. Migrating from traditional Excel tax packages to a centralized web-based tax package will not only provide a method to standardize the data collection templates, it will also streamline access for your tax package providers, as well as eliminate the need to rekey or manually consolidate the data after it is gathered.
3. An audit trail of changes increases accountability and enables you to track the data back to the original source.
Changes and adjustments during the apportionment process are frequent and rarely documented - making it difficult, and often impossible, to determine the original source of the data or the original values. Leveraging automation that keeps a detailed audit trail of all the changes not only improves accountability, it also ensures that you are able to recall data, reports, and calculations as of any point in time. You will no longer lose the actual as-filed data once subsequent or amended returns are filed. Instead, you will be able to instantly "roll back" to any point in the process to compare and contrast the information.
4. Centralization of supporting materials ensures that you are able to "re-create history."
In most apportionment processes, workpapers and supporting documents are rarely centralized or consistent, and are often misplaced, impeding the ability to quickly re-create history. With an automated system, users are able to enter comments directly into the system and attach relevant documentation to support their decisions, positions, and methodologies.
5. By improving data integrity and accessibility, tax technology ensures that decisions are made based on the right information.
Questionable data quality, or lack of access to critical information, can compromise decisions made throughout the tax department. Given that apportionment data is so fundamental to the day-to-day decisions surrounding state provision, compliance, estimated tax payments, audit, and planning, it must be of high integrity and be readily available. Leveraging a centralized data management system will not only improve data reliability, it will also provide immediate access to the information needed to support timely decisions.
6. Software technology enables you to implement security controls and best practices.
Segregation of duties and security are virtually impossible to enforce within a manual process, and in today's Sarbanes-Oxley world, this lack of control is no longer acceptable. Fortunately, with contemporary software technology you are able to configure the system settings to meet your company's specific security requirements. In addition, evolving from the world of single-user spreadsheets to a multiuser software application also provides you with the ability to design, implement, and institutionalize best practices for the apportionment management process.
7. Advanced automation speeds and enhances the reporting process.
While they are good for many things, spreadsheets are not very useful when you are trying to generate reports. Having to rely solely on spreadsheets to satisfy requests for information is not only time consuming, it can also limit the types of reports/views you are able to create with your data. Leveraging a true reporting system will both speed the report generation process and ensure accuracy in reporting. In addition, advanced reporting capability dramatically increases the breadth and depth of the reports for enhanced visibility into risks and opportunities.
ONESOURCE STATE APPORTIONMENT PLANNING
Calculate the impact of legislative changes, and other external and internal changes, on your company's effective tax rate - in a flash.
The planning feature in ONESOURCE State Apportionment from Thomson Reuters is an easy-to-use online tool that delivers real-time tax planning with the flexibility to create multiple scenarios to meet your planning needs.
The planning feature enables you to easily import data from your compliance software to model complex "What if" scenarios online in no time. You'll be able to quickly model the state tax effects of:
- Restructuring. Planning the state income tax effects of proposed changes to the organization's structure (e.g., combining or restructuring existing entities or modeling a merger or acquisition; transferring operations between entities; converting corporations to partnerships, etc.)
- Filing Type. Determining the effect of a change in filing methodology (unitary, nexus combined, nexus consolidated group filings; worldwide vs. water's edge election; check-the-box partnership election)
- Legislative Changes. Planning the state income tax effects of proposed legislative changes (factor weighting, rate, or tax regime change)
- Forecasting Income. Projecting state estimated income tax payments
- Rate Changes. Projecting impact on effective tax rate
- Apportionment Changes. Projecting impact on effective tax rate
ONESOURCE State Apportionment planning enables you to modify the tax rules for a new scenario so that you can quickly quantify the impact of proposed legislation and proactively provide tax policy analysis. It tracks all changes and maintains a historical version of each scenario, providing a virtual "scenario time machine" with a comprehensive audit trail.
No need to create time-consuming spreadsheet-based models!
ONESOURCE State Apportionment integrates with ONESOURCE Income Tax, Estimated Payments and the Checkpoint® platform so you can easily link between expert analysis, primary source materials, compliance software news alerts and so much more.
Contact us to view a demo and learn more about how you can use the planning feature.
For even more robust state tax planning, check out ONESOURCE State Analytics.