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EMEA TMC clientconferenceRealising the benefitsof integrated processdelivery

The Crystal, London9-10 June 2015

1

Introduction

Case study 1: Deloitte GTCE

Case study 2: real estate business

The future: what’s coming?

Agenda

2© 2015 For information, contact Deloitte Touche Tohmatsu Limited

CIT – Corporate income tax

STAT – Statutory accounts

PBC – Provided by client

CoA – Chart of accounts

GAAP – Generally acceptedaccounting principles

ERP - Enterprise resource planning

iXBRL – Inline eXtensible BusinessReporting Language

Acronyms

3

TB – Trial balance

LTP – Local tax provision

CITR – Corporate income taxreturn

DTi – Deloitte Tax Insight

ISAE – International Standard forAssurance Engagements

AGM -

TB – Trial balance

© 2015 For information, contact Deloitte Touche Tohmatsu Limited

• Increasing complexity of reporting requirements and new rules

• Centralising of finance technology landscape

• Centralising of finance teams and shared services centres

• Outsourcing of finance functions

• Technology advancement

• Desire to reduce cost

Drivers for change


• Defining a common process

• Language requirements

• Training and knowledge of local rules and requirements

• Technology immaturity

• Lack of standard local software across countries

• Local rules specifically requiring local resources

What are the challenges of centralisation


Achieving a centralised, combined process

6

Combined CIT STAT PBCrequest. Central collection

of trial balance.

CIT and STATall completedcentrally

Complete GAAPadjustment processwith draft P&L andB/S; first pass tax

calculation

Mapping to local CoA+some automated

adjustments & taxcalculation.

Centrally draft accounts and CIT,local completion

Central team require morecomprehensive knowledge of

local rules and technologybecomes morecomprehensive

Central team requirescomprehensive local

knowledge and many countryspecific platforms needed

Central team require limitedknowledge of local rules with

single, centralised technologysolution

Ch

an

gin

gre

qu

ire

me

nts


Non-aligned process

7

ERP data

Standing data

Non ERP data

ERP system

Companysecretarial

Intercompanysystem

Other

Accountsproduction tool

Representation of

financialstatements

CIT tool CITcalculationand forms

iXBRL

iXBRL

Pdfcomp

Statutoryadj journals

Audit adjs

Tax Pack(sometimes)

Tax notes (viaseparate calc)

Manual dataentry

Manual dataentry

Trial balance data load(requires mapping)

CITE-filing

Points Sheet

CompaniesHouse

Potential data feed


Integrated process

Accounts productiontool

CIT tool

CITcalculationand forms

iXBRL filing Paper filing

Data collection / Warehouse tool

Data integration

Transmittalletter

Dataintegration


9

Case studyDeloitteGTCE


Process

10

Data

Collection

Data

Validation

Data

Process

Deliverable

Drafting

Review &

Sign off

Submit &

Archive

Mgmt

Reporting

Process

Planning

• Confirmavailabilities

• Calendar ofinternal duedates

• Provide data(TB, PBCdata)

• Prior yearpackage

• Provideadditionaldata

• Businessinformationupdate

• Clarify /confirm adhoc matters

• Review andapprove

• Submitfinancialstatementsand CITreturn

• Review offinancialstatementsand equity

• Review LTP,CITR

• Submitfinancialstatementsand CITreturn

• Review andagreecalendar

• Governanceand process

• Set upcollectionplatform

• Upload TBs• Update

mapping• Upload

integratedPBC data

• Review prioryearpackage

• Checkcompletionof PBC

• Conductintegritychecks

• Identify,prepare anddocumentmanagementto localGAAP andtaxadjustments

• Preparationof localGAAP TB,FinancialStatementsand equityreconciliation

• PrepareLTP, CITR

• Store on DTi • Dataanalytics

Client

LocalTeam

Centralteam


Deloitte Global Tax Centre Europe

11

20%of the Centre’s populationsits in Hyderabad, India

ISAE 3402certified

(former SAS 70)

20030 are large accounts coveringEurope and the globe

145

+CLIENTS

+EMPLOYEES

25+

Including people of 16 differentnationalities

30,000 +INDIRECT TAX RETURNS PER YEAR

750 +STATUTORY ACCOUNTS PER YEAR

1,300+DIRECT TAX RETURNS PER YEARIN 40 COUNTRIES

Seekstandardisationof processes,quality & cost

efficiency

In some stageof a finance

transformationProcess

Requestingmultidisciplinary

tax andstatutory

accountingservices

Operatingwith

sharedservicecenters

Clients

+LANGUAGES SPOKEN


Enabling technologyDeloitte conversion tool

Benefits Features

Reduce risk

• A single pre-configured solution that providesreconciliation from management GAAP to localGAAP, eliminating unwieldy and error pronespreadsheets

Achieve greatervisibility

• Get all the information you need on a real timebasis, drill down whenever you need to see sourcedocumentation

Save time• Features such as automated checks and flexible

import and export functionality eliminates manualtasks and speed up reporting

Ensurestandardisation

• A tool specifically built to support the GAAPconversion that enables standardisation of thereporting process and conversion methodology

Improveconsistency

• Provides consistent reporting across all countrieswith country specific templates that producesstandardised calculations and schedules

Minimises ongoing reportmaintenance

• A self service reporting engine that makes dataeasily accessible and provide the ability to run realtime customised reports

12


Case studyReal estatebusiness


Case study

Country CIT returns Stat. accountsCombined

information requestCentralised CIT

CentralisedSTAT

Austria 2 2 Y N N

Belgium 24 24 Y Y Y

Czech Republic 32 32 Y Y Y

France 206 207 Y Y Y

Germany 117 13 Y Y Y

Hungary 33 33 Y Y Y

Italy 33 33 Y Y Y

Luxembourg 300 298 Y Y Y

Netherlands 181 201 Y Y Y

Poland 93 102 Y Y Y

Romania 4 4 N N N

Slovakia 16 16 Y Y Y

Spain 33 32 Y Y Y

Sweden 15 15 Y Y Y

UK 120 48 Y Y Y


Management application

• Managing the process formany entities would betime consuming ifundertaken manually

• A bespoke managementapplication controls theprocess and automatesrepetitive tasks

• It allows batch creationand processing of entityfiles

• Data is gathered in batch

Completedinformation

request

CIT / STATtemplates

Informationrequesttemplate

Other agreeddata sources

ERP financialdata

Entity list

Prior year files

Entity 1 Entity 2 Entity nEntity 3


Information request (PBC) processInformation request

template defines whichdata items are required inthe information request for

each country.

Structured date: Each dataitem is tagged to support

the ability to automate

Automated generation ofrequest for a country

16


Financial statement disclosures

The pre-formatted financial statementsare automatically populated based on

the uploaded trial balances andInformation requests


Benefits• Cost reduction

o Reduction in per-entity costs

o Reduction in loan staff costs

• Increased efficiency

o Client time on data provision significantly reduced

o Automated reporting of data items across entities

o More streamlined working shared service centre (SSC)

o Automation of associated processes (Tax payments and AGM production)

• Improved quality

o Improvement in quality and compliance with local rules

o Reduction in late filing penalties and re-filings

o Additional data controls and checks


What optionsexist?


Options

20

Option Efficiency Set-up cost Recurringcost

In-house FTErequirement

Outsource

Shared servicescentre

integration

Tactical solution– Data

processing


Deloitte: Process management and reportingClient systems and process

ERP data• Trial Balance• Transactions• Other ERP

reports

Standing data• Company

names andaddresses

• Directors• etc.

Non ERP data• Fixed asset

analysis• Employee

information• etc.

ERP system

Companysecretarial

Intercompanysystem

Other

Accountsproduction tool

Representation offinancial

statements

• Standard countrychart of accounts

• “Additional data”screensautomated

• Adjustments fedfrom datawarehouse

• Text disclosurechanges made intool

iXBRLfiling

Paperfiling

Data collection /Warehouse tool

• Import trialbalance and otherERP data (e.g.transactions)

• Standardiseddata collection forother information(manual input orautomation)

• Real timevalidation andanalyticalfeedback on dataquality +opportunities

• Mapping fromclient CoA to localCoA plusautomatedadjustments

• User inputadjustments(audit, reclass, /presentational)

• Presents P&Land B/S in localGAAP

• Stores data itemsfrom Accounts /CIT to allowanalytics

• Stat adjustmentjournals can beoutput

• Deloitte, clientand auditor views

• Queries andtransmittal letter

• Roll forward incl.r/f validations

• Batch processing

• Feedback on dataquality

Co. HouseData Feed

Real time data link

21

I. Statutory accounts outsourceThe end-to-end process from planning and preparation to finalisation of the statutory accounts and financial statements is carried out byDeloitte Global Tax Centre Europe (GTCE).



reports


names andaddresses




information• etc.

ERP system

Companysecretarial

Intercompanysystem

Other

Accounts productiontool

• Import trialbalance andother ERP data(e.g.transactions)

• Mapping fromclient CoA tolocal CoA –Standard countrychart of accounts

• Automated andmanualadjustments

• User inputadjustments(audit, reclass, /presentational)

• Presents P&Land B/S in localGAAP

• Stat adjustmentjournals can be

output

• Roll forward incl.r/f validations

• Feedback ondata quality

• Clearcomparisonsagainst prioryear file withsummary reviewchecks

• Text disclosurechanges made intool

• “Additional data”screensautomated

TB data load(requiresmapping)

Co. HouseData Feed

Client systems and process

iXBRLfiling

Paperfiling

Integrated within the Shared service centre

Representationof financialstatements

22

II. Shared service centre integrationA standard approach to harmonise local country/departmental financial reporting processes through the integration of a standardised thirdparty technology solution within the Shared service centre which can be used to produce financial statements and disclosures.



reports


names andaddresses




information• etc.

ERP system

Companysecretarial

Intercompanysystem

Other Current local statutory accountpreparation process

Customised Excel solution

• Import trial balance and otherERP data (e.g. transactions)

• Some validation and analyticalfeedback on data quality +opportunities

• Mapping from client CoA to localCoA plus automated adjustments

• User input adjustments (audit,reclass, / presentational)

• Presents P&L and B/S in localGAAP

• Stat adjustment journals can beoutput

• Client and auditor views

• Roll forward incl. r/f validations

• Feedback on data quality

• Clear comparisons against prioryear file with summary reviewchecks

TB dataload(requiresmapping)

Co. HouseData Feed

Shared Service Centre

Statutoryadj /

journals

TB mapped toLocal GAAP +Representation offinancialstatements

Local client teams 23

III. Tactical solution – Data processingEnhancing current processes through greater standardisation, automation and built-in review checks into existing spreadsheets used in dataprocessing; helping improve efficiency accuracy of the statutory accounts.


The futureWhat’scoming?


Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities.DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please seewww.deloitte.com/about for a more detailed description of DTTL and its member firms.

Deloitte provides audit, consulting, financial advisory, risk management, tax and related services to public and private clients spanning multiple industries. With a globallyconnected network of member firms in more than 150 countries and territories, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insightsthey need to address their most complex business challenges. Deloitte’s more than 210,000 professionals are committed to becoming the standard of excellence.

This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “DeloitteNetwork”) is, by means of this communication, rendering professional advice or services. No entity in the Deloitte network shall be responsible for any loss whatsoever sustainedby any person who relies on this communication.

© 2015. For information, contact Deloitte Touche Tohmatsu Limited. 26

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