corp govissiwrcc2010
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Confidential and Proprietary - ISSI
Corporate Governance forExemption CertificatesPresentation by ISSI
October, 2012ISSI provides industry-leading,
Sarbanes Oxley and SAS 70 Type II Compliant Electronic Certificate (ECM) solutions that give you control over your document management governance and processes cost-effectively.
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Agenda for Presentation
The Regulatory Challenge for Governance
What is Exemption Certificate Governance Policy?
Assembling the best ”Governance Team” ECM Governance Metrics Setting the Mission and Strategy Best Practice Data Policies What are my Integration Points? Technology Enablement Success Conclusions and Q/A
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The Governance Challenge Increasing Regulatory Scrutiny.
Transaction Taxability Encompasses:
Today: Sales and Use
Tomorrow: VAT
National and International
Expand Compliance Efforts.
Reduce compliance cost and effort.
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Exemption Certificate Governance Policy
Cost Reduction
Risk Reduction
Effort Reduction
Compliance Improvement
Short Term Impact
Long Term Results
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Inhibitors - Certificate Governance Diffused compliance responsibility
No central authority
Many departments play a part
The framework is crucial to success
Lack of visibility
Limited understanding of true risk
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ECM Governance Metrics
Reduction in
Assessments, interest and penalties.
Accruals.
Resources spent
Preparing for and defending audits.
Acquiring and reviewing certificates.
Researching and correcting errors.
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Percentage of Revenue
A Measure of Relative Impact.
A Means for Audit Assessment.
Statistical Sampling that can hurt or help.
Used as a means to proportionally determine compliance.
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More ECM Governance Metrics Number of valid exemption
certificates as a percentage of the total number of exempt customers and as a percentage of revenue.
Number missing, incomplete or invalid exemption certificates as a percentage of the total number of exempt customers and as a percentage of revenue.
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Even More ECM Metrics Response time on certificate
acquisition campaigns.
Response levels on certificate acquisition campaigns.
Tax accrual accuracy.
Time spent preparing Tax accrual calculations.
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Data Policies Standardization
Quality Control
Compliance Rules
Data Ownership
Flow of Data
Synchronization Rules
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Data Policy Impact
Master Customer File
Master Vendor File Order Entry General Ledger Exemption
Certificates
Exempt Status Determination
Sales Tax Calculation
Tax Accruals Contingent
Reserves Calculation
Reverse Audits Audit Defense
Data Sources: Data Uses:
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Document Indexing
Customer Name FEIN Customer Bill To Address Customer Ship To Address(es) Customer E-mail Customer Phone Customer Fax Unique Customer ID Effective Date Expiration Date State Registration Number Signature Current Certificate Status
Certificate Type: MTC Multi-State Resale SSTI Multi-State State Issued Blanket Exemption Single Purchase
Exemption Direct Pay Permits Exempt Use Non-Expiring Limited Life Description of Purchase
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Data Synchronization Which system’s data takes
priority?
How, when and at what interval data is exchanged?
How are data conflicts resolved?
Where and when is new customer or vendor data entered?
What happens when customer or vendor records are deleted?
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The Sales Tax Process Determine tax-exempt status of
the customer placing an order. Calculate sales tax owed. Collect exemption certificate. Review certificate for sufficiency. Reverse audit to determine
overall level of compliance and determine specific gaps and audit exposure.
Respond to state audit documentation requests and defend the audit.
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The Use Tax Process Request determination that a purchase
is use tax exempt. Determine the taxability of said
transaction. Prepare and deliver an exemption
certificate to the specific vendor. Document use tax-exempt transaction
for future reference. Perform periodic Use Tax accrual
calculations. Reverse audit to determine overall
level of compliance and determine specific gaps and audit exposure.
Respond to state audit documentation requests and defend the audit.
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“Gotchas” for Additional Complexity
Drop Shipments
Streamlined Sales Tax Project
Direct Pay Agreements
What is and is not taxable?
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Sufficiency ReviewA minimum set of sufficiency rules
would include checking: That the proper form was used. That it was signed and dated.
And may also include: A specific seller’s name A description of purchase A valid certificate registration
number (form and format). Expiration Dates.
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Forms and Statutory Compliance Each State has their own
May be transaction specific
SSTP
May expire
Change frequently
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Certificate Workflow Transaction inception
Sales taxability
Sufficiency Reviewed
Documented, Stored, Indexed
Searchable
Retrievable
Audit Defense
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Document Capture Paper Delivery
Pot luck Needs scanning Easy for customers to fax or mail
Electronic Delivery Improved document capture Better indexing Correct Forms first time Fewer errors
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Technology Enablement Platform
SaaS Traditional Self-hosted Delivery Hybrid Models
Reliability Transparency Who has the staff? Who has the expertise? When do we need help?
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Security At a minimum, SAS 70 Level II Certified Multi-tenant versus Single-tenant Commingling Data:
Instances Customer Files Certificates
Single Sign-on Offshore versus Onshore
Hosting Services
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Benefits of ECM Governance Reduce the cost to acquire and
handle exemption certificates.
Eliminate errors and confusion.
Increase ECM compliance.
Minimize audit risk and exposure.
Satisfy Customers and Staff.
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Thank you for your time!
Larry Powers
Chief Strategy Officer, ISSI/TEAMS
http://www.teamscert.com
330.342.7760