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Corp govissiwrcc2010

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Corp govissiwrcc2010

  1. 1. Corporate Governance for Exemption Certificates Presentation 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. 1 Confidential and Proprietary - ISSI
  2. 2. 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 2 Confidential and Proprietary - ISSI
  3. 3. 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. 3 Confidential and Proprietary - ISSI
  4. 4. Exemption Certificate Governance Policy  Cost Reduction  Risk Reduction  Effort Reduction  Compliance Improvement  Short Term Impact  Long Term Results 4 Confidential and Proprietary - ISSI
  5. 5. 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 5 Confidential and Proprietary - ISSI
  6. 6. 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. 6 Confidential and Proprietary - ISSI
  7. 7. 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. 7 Confidential and Proprietary - ISSI
  8. 8. 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. 8 Confidential and Proprietary - ISSI
  9. 9. 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. 9 Confidential and Proprietary - ISSI
  10. 10. Data Policies Standardization Quality Control Compliance Rules Data Ownership Flow of Data Synchronization Rules 10 Confidential and Proprietary - ISSI
  11. 11. Data Policy ImpactData Sources: Data Uses: Master Customer File  Exempt Status Master Vendor File Determination Order Entry  Sales Tax Calculation General Ledger  Tax Accruals Exemption Certificates  Contingent Reserves Calculation  Reverse Audits  Audit Defense 11 Confidential and Proprietary - ISSI
  12. 12. Document Indexing Customer Name Certificate Type: FEIN  MTC Multi-State Resale Customer Bill To Address  SSTI Multi-State Customer Ship To Address(es)  State Issued Customer E-mail  Blanket Exemption Customer Phone  Single Purchase Exemption Customer Fax  Direct Pay Permits Unique Customer ID  Exempt Use Effective Date  Non-Expiring Expiration Date State Registration Number  Limited Life Signature  Description of Purchase Current Certificate Status 12 Confidential and Proprietary - ISSI
  13. 13. 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? 13 Confidential and Proprietary - ISSI
  14. 14. 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. 14 Confidential and Proprietary - ISSI
  15. 15. 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. 15 Confidential and Proprietary - ISSI
  16. 16. “Gotchas” for Additional Complexity  Drop Shipments  Streamlined Sales Tax Project  Direct Pay Agreements  What is and is not taxable? 16 Confidential and Proprietary - ISSI
  17. 17. 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. 17 Confidential and Proprietary - ISSI
  18. 18. Forms and Statutory Compliance  Each State has their own  May be transaction specific  SSTP  May expire  Change frequently 18 Confidential and Proprietary - ISSI
  19. 19. Certificate Workflow Transaction inception Sales taxability Sufficiency Reviewed Documented, Stored, Indexed Searchable Retrievable Audit Defense 19 Confidential and Proprietary - ISSI
  20. 20. 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 20 Confidential and Proprietary - ISSI
  21. 21. 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? 21 Confidential and Proprietary - ISSI
  22. 22. 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 22 Confidential and Proprietary - ISSI
  23. 23. 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. 23 Confidential and Proprietary - ISSI
  24. 24. Thank you for your time! Larry PowersChief Strategy Officer, ISSI/TEAMS http://www.teamscert.com 330.342.7760 24 Confidential and Proprietary - ISSI

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