Price on Outsourcing
Another example recently presented itself on the usefulness of outsourcing. Some time ago I discussed the possibility of outsourcing some of the tax functions with a relatively large Company. At the time, they were handling all of their filings in house and decided not to go with my recommendations. With the recent economic climate changes, the Company acquired several new entities to help achieve their market strategy goals. One of the challenges now facing the Company's tax department is figuring out how to manage the compliance needs of these newly acquired entities. Though the Company has a great track record, they know they will need to hire additional people in order to accurately meet their growing tax compliance needs. Based on the projections they've provided to us, we have proposed an outsourcing approach that not only reduces their projected additional costs by 30%, but also guarantees compliance, and relieves the existing Company's tax professionals from these duties, thereby freeing their time to focus on important corporate tax planning and strategy issues. Overall this is a win-win situation and another example of how outsourcing works!
What is "Outsourcing"?
So what is “outsourcing?” Usually when you hear the word “outsourcing” in the public accounting world it is usually in reference to the accounting firm outsourcing the preparation of income tax returns overseas. That’s not what we are referring to when we speak of Outsourcing. When we refer to Outsourcing at CHP, we are talking about businesses outsourcing their internal accounting, finance and tax functions to paid professionals to allow the company to focus on what it does best. Many companies already outsource their legal counsel, their IT Department and various other internal functions, so it is a logical step for a business to consider outsourcing CFO responsibilities, the accounting department functionality, and the company’s internal tax department. The benefits to outsourcing these functions are numerous, and while we provide a multitude of outsourcing services at CHP, the focus of this blog will be on the outsourcing of tax department responsibilities. Everybody is aware of the complexity of income taxation, but historically little care has been given to non-income tax related filings. Every state and most local municipalities have a form of localized taxation and filing requirements that range from annual state registrations to taxes on property and/or sales. Dedicating internal resources for accurate filing determination and compliance can be very expensive and difficult due to the technical expertise required, but failure to accurately file these returns can be even more costly. Outsourcing this responsibility to CHP ensures that you are efficiently and accurately filing your non-income tax related returns, and that you are filing in the proper jurisdictions.
This blog will be updated a few times each month to further discuss the issues facing internal tax departments, highlights on changes in local & municipality taxation, and suggestions and benefits for staying in compliance with your company’s non-income tax state and local filings. Any questions you have can be submitted through this blog, or if you prefer, can be emailed to me directly at
tprice@chpllp.com
