Tax Management Consulting for a Large Housewares Manufacturer
A major housewares manufacturer faced a staff shortage as it attempted to remediate a significant deficiency in its tax provision while also handling compliance responsibilities. The company selected Deloitte to provide provision and remediation services. A team was assembled to support the client’s provision process and provide regular assistance with ongoing tax planning discussions — enabling the company to address remediation quickly and at a lower cost than hiring and training new staff.
A major housewares manufacturer experienced a significant deficiency related to its tax provision — the first time it had faced such a situation. The company identified several contributing factors, but in particular, turnover had left the tax department with a shortage of qualified personnel to deal with operational complexities. Now faced with both remediation activity and the upcoming peak compliance season, the company needed to take action to bring sufficient attention to both areas.
A tax department assessment identified outsourcing as a potentially viable solution, but the company previously had not utilized this strategy for this type of internal function. Before pursuing this direction, the audit committee wanted to see evidence, not only of the potential cost/benefit of outsourcing but, more importantly, of other similar organizations that have realized value by outsourcing aspects of the tax function.
First, we helped the client’s audit committee define a provision outsourcing arrangement with which it was comfortable, and then we assembled a dedicated team to assist with preparation of the ASC 740 provision computations and remediation activities. Our team included a senior manager who works on-site regularly with tax leaders to understand transactions and provide assistance with issues that arise throughout the year, such as dispositions of business units or restructuring activities.
This arrangement has enabled the company to focus its own limited resources on complex compliance issues and matters that affect financial statements — while also resolving remediation issues efficiently.
As we move into the second year of working with the client, we are applying observations and experiences from the first year to help the organization begin to improve or strengthen certain aspects of the provision process, as well as its use of technology.
Why Deloitte? The client selected the Deloitte team for its tax provision skills and experience in similar remediation situations, and our processes and technology. The company also valued our approach, which was to provide tax provision and project management resources to address immediate needs without trying to make significant, short-term changes.
Deloitte provided technical knowledge and experience — including resources with significant provision and remediation experience — that enabled the client to address its provision and remediation requirements quickly and efficiently. Within six months, the remediation process was ahead of schedule and the audit committee was pleased with the progress. In addition, the arrangement has cost the company less than hiring and training new staff — a savings the client estimates at about 25 percent.
To learn more about Deloitte’s approach to tax provision process automation, contact your Deloitte adviser or email us at email@example.com. For additional resources, visit www.deloitte.com/us/movetaxforward.
As used in this document, “Deloitte” means Deloitte Tax LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.