By now, the need for software to complete the corporate income tax provision is obvious to most tax departments. After all, you don’t need a degree in technology to see how software ensures accuracy and makes the complex process more efficient and streamlined.
At TeamHealth, an outsourced physician provider based in Knoxville, Tennessee, Senior Tax Director Lara Owens is well aware of the advantages that stem from provision software. For her nine-person tax department, a technology-based solution would allow for accurate state-by-state provision calculations, provide keen insights into tax and the business, and make the tax department a value-add part of the organization—all while smoothing a complicated data-gathering, number-crunching process.
Owens, an early adopter and proponent of provision software, signed on with another provider a few years back. However, with that particular solution, things didn’t exactly go as planned.
“It just wasn’t user-friendly enough for us to really dig in and use it,” Owens says. “We even hired KPMG to help us get it going, but we couldn’t successfully get to the point where we felt comfortable using it.”
TeamHealth has companies spread over 48 states, and Owens’ group prepares the state provision for all of them—a huge undertaking for a small team with a host of competing priorities. Owens found herself saddled with an enormous amount of work, very little time to complete it, and a provision solution in which she lacked confidence.
At first, she tried to make the best of it and referred to the software for state calculationsrates, but ultimately completed the calculation in Excel. “Eventually we ended up morphing into Excel completely, because we could do it faster that way.”
Closing the (Work)book
Accuracy is the number one priority when it comes to the provision calculation—which makes Excel alone an inferior tool. Broken formulas, multiple workbooks, incorrect manual inputs, even typos can all alter a company’s effective tax rate.
For Owens, accuracy was an especially tall order given TeamHealth’s sheer volume of state calculations. She wanted an efficient process that would allow her team to complete separate entity provisions, guaranteed accuracy in the calculation, and intelligence to help her strategize.
“We wanted to improve the efficiency of our process. The volume was too much to ensure there weren’t any mistakes—especially given the time constraints,” says Owens. “The process was also very manual. If a formula or number needed to be changed, if that got missed, then it fell through the cracks. There were definitely risks that were not worth taking.”
Owens also wanted to be able to model different scenarios and estimate the impact on the company’s effective tax rate. Software analytics could help her—but only if she understood how to use it.
“We thought maybe software is still the solution—just not this software,” she says referring to previous technology.
“With Excel, there were definitely risks that were not worth taking.”
The Exactera Experience
Owens and her staff signed up for a demo of Exactera Tax Provision and were immediately impressed with the software’s ease of use. “It opened our eyes. We thought, ‘this seems like something we could do even if we don’t have prior experience with it.’”
Throughout her trial, the customer support she received enforced that decision. “The Exactera team said, ‘Send us your information and we’ll put it into the software and show you how it works,” says Owens. “The cooperative nature, the relationship was really working well for us. I thought, ‘this feels right.’”
This year, TeamHealth implemented Exactera Tax Provision and used it for their state current calculations and for their deferred roll forward. They’ve been impressed with the dashboards, the seamless importing, and the overall ease of use. “In comparison (to the first software), it was very straightforward,” says Owens. “Very intuitive.”
While TeamHealth is still working on building out accounts and entries, they’re already seeing improvements in their provision. “Having the ability and the confidence to expand and do a more detailed provision definitely makes me feel like we’re getting to a better number in our calculations,” Owens says. “We’re using those more detailed numbers for our second quarter estimated payments and that’s not something we would have had the ability to do before.”
As a manager, Owens has experienced other benefits, too. Using the software, she’s been able to get more team members involved in the provision and free herself up for more strategic initiatives.
“Have other people get more involved in the provision process allows me to be more of a reviewer and to focus on the big picture, not just checking numbers,” she says. “It has been very helpful to our process.”
Next year, TeamHealth will use Exactera Tax Provision to complete the tax provision entirely. Owens isn’t worried about hiccups because she has back-up. “The customer support we received was exceptional,” she says. “We had direct contact with people who could dig in and answer our questions.”
And even given her previous software history, she says, “Exactera’s customer support was like nothing I’ve experienced before.”
