Market Study of Corporate Tax Departments

1. Market Study of Corporate Tax Departments Sponsored by Vertex Inc.

2. Introduction

3. Presenters Lance Cosgrove, Host Nancy Manzano, Director Chief Tax Office, Vertex Inc.

4. About Vertex • Leader in corporate tax processing solutions • Income and transaction tax software • In business since 1978 • Thousands of corporate customers including: • Bristol-Myers Squibb • Hewlett-Packard • Mercedes-Benz USA • Starbucks • AT&T

5. Goal for this Study Understand your challenges • Income tax planning • Risk management • Operational efficiency • Business enablement

6. How the Study Works • Vertex® Enterprise Presentation • Benefit Analysis Worksheet • Survey • Confidential • Webcast and presentation available for your reference

7. Nancy Manzano, Chief Tax Office • Director in the Chief Tax Office at Vertex • 25+ years of corporate tax experience • Prior to joining Vertex, Tax Director at: • 21st Century/Farmers Insurance • MBNA America Bank • KPMG, Philadelphia • Licensed C.P.A. • Bachelor’s degree in Business Administration from Drexel University • Master of Science in Taxation from Widener University

8. Tax Challenges

9. Challenges of Corporate Income Tax Management Vertex’s Chief Tax Office is comprised of former tax executives, who understand your challenges: • Lack of integration between financial reporting systems and tax reporting systems • No standardized approach to tax planning and tax compliance • Inadequate tax technology • Over-reliance on spreadsheets and manual processes • Income tax provision and income tax return preparation not sufficiently integrated • Disjointed tax processes • Increasing scrutiny by global taxing authorities • Lack of fully secured and comprehensive global record retention tool • Pressure for resources

10. Four Major Areas • Tax Planning • Risk Management • Operational Efficiency • Business Enablement

11. Tax Planning • Do you have the data you need to analyze whether your legal entities are structured in the most tax efficient manner? • Do you feel your ETR could be lower through tax planning? • Can you easily analyze the impact of moving operations from higher-tax jurisdictions to lower-tax jurisdictions? • Do you have a list of tax planning ideas that you just can't get to because you’re too bogged down with inefficient tax processes?

12. Risk Management • How much is your company paying each year in audit-related penalties because information is not available timely or is incomplete? • Do you feel you are spending too much on professional fees to help you defend your company on audit? • How effective are your data collection and financial system controls around all your tax processes? • Have your attest auditors ever expressed concern about spreadsheet risk and its impact on internal controls? • How much effort and cost is expended on putting mitigating controls in place? • Do you have a set of global standard policies and procedures around tax data and processes?

13. Operational Efficiency • Is it taking way too long to close the books every quarter? • Are your work papers completed in a manner that allows you to respond to auditor inquiries quickly and accurately? • Are there too many resources being devoted to manual processes? • How quickly can you incorporate tax law and regulatory changes into your tax processes? • Is the relationship with your auditors suffering because you can't respond to requests in a timely or complete manner?

14. Business Enablement • Do you and your staff spend most of your time in the office rather than out in the business? • How quickly can you respond to analysis of M&A activity? • Are you consulted on key decisions such as new products or services, or new geographic markets? • Are you considered a trusted advisor who can help the company not only optimize taxes, but also deliver better bottom-line performance?

15. A New Solution

16. Introduction to Vertex Enterprise • A breakthrough in corporate tax management • Video prepared by Vertex, featuring some of Vertex’s top executives, including CEO Jeff Westphal, and Chief Tax Officer Bill Brennan

17. Vertex Enterprise • Designed to transform the way tax is managed across the tax life cycle • Suite of global tax management solutions • Flexible • Built from the ground up for the needs of tax • Data management and reporting capabilities • User-friendly system for provision, planning, audit defense, and compliance

18. Vertex Enterprise (continued) Offers: • Transparency • Speed • Efficiency • Drill-down capability • Controls • Single source of truth • Secure global record retention repository • Enterprise-class open architecture • Flexible user interface

19. Vertex Enterprise (continued) Benefits: • Reduced risk • Improved accuracy • Improved operational efficiency • Improved transparency

20. Vertex Enterprise (continued) Enables you to proactively manage the changing needs of a global company • Mergers and acquisitions • Multiple financial systems and ERPs • Shared service centers • Other complex business growth challenges 

21. Vertex Enterprise (continued) Vertex Enterprise is a suite of many elements. Currently, for income tax management, they include: • Vertex® Tax Data Warehouse • Vertex® Tax Accounting • Vertex® Compliance

22. Vertex® Tax Data Warehouse

23. Vertex Tax Data Warehouse • Foundation of Vertex Enterprise • Single source of data for all features and functions • Standalone commercial tax data warehouse • Import data from multiple sources • Export data to multiple tax applications

24. Vertex Tax Data Warehouse (continued) • Stores current and historical financial data from accounting systems • Map general ledger to a common chart of accounts • Single source of data to support the tax provision, tax return, audit defense and tax planning processes

25. Vertex Tax Data Warehouse (continued) • Automates build-up of legal entity books • Supports multiple currencies and multiple accounting ledgers – GAAP, IFRS • Automates most transfer pricing adjustments • Groups legal entities by tax jurisdiction • Supports any combination of worldwide groupings, disregarded entities, or super-holding company structures

26. Vertex Tax Data Warehouse (continued) • Automates key processes: • Book/tax differences for all tax jurisdictions • State apportionment factors • U.S. earnings and profits calculations

27. Vertex Tax Data Warehouse (continued) • Import Excel spreadsheet data • Drill-down feature for clear audit trail back to financial system data • Fully leveraged by all other tax components • Eliminates redundancy • Streamlines functions across the tax life cycle • Frees your department for higher-value activities

28. Vertex® Tax Accounting

29. Vertex Tax Accounting • Built on Vertex Tax Data Warehouse • Only solution with multi-GAAP, multi-ledger, multi-year, and multi-currency support • Centrally managed internal tax controls • Computed provision for multiple book ledgers • Comprehensive tax sub-ledger • Automated tax journal entries

30. Vertex Tax Accounting (continued) • Service-oriented, highly scalable, back-end architecture • Supports unlimited simultaneous users • Facilitates true collaboration

31. Vertex® Compliance

32. Vertex Compliance • Today’s challenges • A new paradigm • Leverages Vertex Tax Data Warehouse for provision and returns, storing data for global record retention needs

33. Vertex Compliance (continued) • A proactive approach • Avoid producing duplicative workpapers for provision and tax returns • Reduce reliance on Excel spreadsheets and manual processes • Increase speed and efficiency across the tax return preparation process • A complete audit trail from the return back to underlying general ledger detail

34. View of the Tax Life Cycle Today

35. View of the Tax Life Cycle with Vertex® Enterprise

36. Benefits in Four Key Areas

37. Benefit Area – Tax Planning • Run real-time “what-if” scenarios • Improve visibility • Advise on legal entities and locations • Improve cash flow, ROE, and stock price

38. Benefit Area – Risk Management • Respond quickly to audit inquiries • Reduce exposure to penalties • Reduce professional fees for audits • Improve controls for data collection and financial reporting • Reduce reliance on spreadsheets • Establish global policies and procedures

39. Benefit Area – Operational Efficiency • Close faster • Leverage workpapers across multiple tax processes • Automate processes • Analyze impact of tax law changes • Respond to audit inquiries faster • Build better auditor relationships

40. Benefit Area – Business Enablement • Spend more time in the field with other departments • Participate in business decisions • Be a trusted advisor • Deliver better bottom-line performance

41. Benefit Analysis Worksheet

42. Benefit Analysis Worksheet

43. Benefit Analysis Worksheet

44. The Survey

45. The Survey • Survey is the purpose of this program • Provide your opinions on how Vertex Enterprise might fit into your organization

46. Next Steps

47. Next Steps • Complete the Benefit Analysis Worksheet • Complete and submit the survey • Replay and/or print this presentation for clarification, as needed

48. Thank You Please click to download the presentation document.