[Learn how you can solve technical and process issues involved in calculating your income tax provision with Bloomberg Tax Provision.]
Challenge: Streamline approach to tax provisions
Flexential is recognized as a leading national hybrid IT provider, offering technology management solutions that keep customers online, secure, and productive. It has gone through significant growth, and as a result, its taxes have become more complex.
A Flexential corporate tax manager joined the company from a Big Four accounting firm and saw multiple opportunities to improve Flexential’s tax operations by implementing new tax technology solutions and processes.
One of the first objectives was to improve the company’s approach to tax provisions. Like many small and medium-sized companies, Flexential had been using Microsoft Excel to prepare provisions. As the company grew larger, and its operations more complex, Excel’s limitations only became more apparent. Tracking multiple entities using numerous sheets in a single Excel workbook was time consuming, and it was difficult to keep all formulas in sync. The corporate tax manager grew concerned that they were potentially sacrificing accuracy, leading him to feel the need to find the right packaged solution.
Solution: Implement new software that’s easy to use, accurate, and cost-effective
The Flexential team began with several selection criteria, including pricing, ease of implementation, onboarding resources, and availability of live and on-demand support. They also focused on the quality of reporting and exports that would be shared with auditors, wanting to ensure that Flexential could quickly provide detailed information that was also easy to understand and double-check for accuracy.
Multiple formal tax provision solutions were evaluated and considered. Bloomberg Tax Provision quickly rose to the top of Flexential’s list. According to the tax manager, “The initial demo was the best I’d seen. It really gave me a great idea of how the software works.”
Recalling that demo and other steps in his evaluation, the tax manager lists the criteria he considered and how Bloomberg Tax Provision addressed each need he had identified for Flexential:
Simple Implementation – “Implementation is a sizable cost that is usually more than the annual subscription itself. With Bloomberg Tax Provision, I could do the implementation myself. It was the most economical solution, and it has everything that Flexential is looking for in reports.”
Robust and Easy Reporting – “It’s very easy to create exports and an audit report that you can just download and send off to the auditors.”
Reasonable Total Cost of Ownership –
“Flexential is not a huge corporation, so total cost of ownership was important. Bloomberg Tax Provision provided great value for the investment.” The Flexential team found that other solutions offering comparable quality and depth were costly to implement, took significantly more time and effort to onboard, and would require significantly more training and ongoing support costs.
Given these clear advantages, Flexential selected Bloomberg Tax Provision and never looked back. Onboarding and implementation were as straightforward as they had expected.
“I’ve done implementations of other software, and this one was hands-down the easiest to get the hang of. It was just a matter of weeks before we had full implementation and recreation of our prior year provision ready to go.”
Results: Saving time and effort with a “simple, intuitive” software solution
To double-check Bloomberg Tax Provision’s accuracy and validate its approach and ease-of-use, the Flexential team ran side-by-side provision processes in the first year, introducing the software while continuing to create Excel spreadsheets.
“Bloomberg Tax Provision was faster, easier, more precise, and much more flexible,” the tax manager says. “Side-by-side gave us peace of mind, but by year two we completely trusted Bloomberg Tax Provision and used it only.
Over time, state provisions get overly complicated and messy. Different states calculate things in different ways. Bloomberg Tax Provision keeps us on track with that. Once I get state processes and calculation logic right, it’s easier to get input it into Bloomberg Tax Provision as opposed to trying to do 50 different calculations in Excel and trusting that all the interconnections work and weave together.”
[Bloomberg Tax Provision helps Novo Building Products save time and effort by simplifying its spreadsheet-heavy tax provision process.]
The bottom line on making the change from masses of spreadsheets developed in-house to a package solution is simple, boiling down to eliminating minor errors that get magnified as volume increases.
“The key point is reducing risk. When you create your provision in Excel, there are so many manual steps and processes in place that it leaves a good amount of risk in an environment where it’s critical to get everything correct,” the tax manager says. “There may be multiple areas where you’ll have to make a change. If there’s a last-minute change, in crunch time, you might miss something. With Bloomberg Tax Provision, you enter data once, and it knows how to flow through.”
Other elements of working with Bloomberg Tax Provision have been equally pleasing.
Working With Auditors – “Exports are linked, which auditors really appreciate. Other solutions just give you hard-coded reports, and it’s a lot of manual adding up to do checks and balances. In Bloomberg Tax Provision you double-click a report to see the original information. Want to look a little deeper into a number and find out why it is what it is? You can follow links back to source data.”
Learning the Software – “Bloomberg Tax Provision has a really good process in place. They set up a series of checkpoints and walk you through them step-by-step to set up your provision. We walked through the pieces in tandem, and I got the hang of it. Once you do one thing, it’s very intuitive to repeat, to keep doing the same thing to get set up. And they have a very patient support team!”
Product Support – “I used the Bloomberg Tax Provision training videos – they are very helpful. I get help with different setups and different inputs to run different things through the provisions, so that’s extremely helpful. They have other videos focused on the ASC 740 technical aspect of accounting behind the provision, which is super helpful for reference materials. It’s nice because these how-to and learning videos are things other providers charge for separately.”
[Bloomberg Tax Provision is the most powerful ASC 740 calculation engine on the market. See it for yourself.]
The tax manager’s conclusions for Flexential are clear, and he extends his reasoning to other companies of nearly any size and situation that need a more accurate and less risky approach to tax provisions.
“Excel is cheap and rudimentary; it can get complicated quickly and sometimes you have to sacrifice precision. It takes more time, and you’re never quite sure that everything ticks and ties. Then you’ve got more expensive and complicated solutions that aren’t easy to use. In the middle is Bloomberg Tax Provision, which we call ‘just right.’ It’s simple, intuitive, and easy to implement, learn, and use.”