With KPMG’s recently completed acquisition of Thomson Reuters’ Indirect Tax Managed Service business (aka sales tax outsourcing), it will be interesting to see how they will serve the small and mid-market businesses.
From my vantage point, most of the vendors that provide sales tax outsourcing services focus on the Fortune 1000. The Fortune 1000 possess significant in-house sales tax expertise and want access to a return prep factory. These factories are geared toward automation and standardization. The advantage is that cost is squeezed out of the process. The disadvantage is often an inflexible process with little real-life sales tax expertise at the point of client interaction.
Thomson Reuters’ sales tax outsourcing business historically focused on the Fortune 1000. I can speak to this because I founded the original Tax Partners business which was sold to The Thomson Corporation in 2005. I suspect that KPMG will continue to focus on the Fortune 1000 where companies are looking for return prep and filing services in their outsourcing relationship.
This return prep and filing service works well for large businesses, but the small and mid-market business is also looking for sales tax guidance and expertise at the point of client interaction with their outsourcing partner.
With the technology and process pieces acquired from Thomson Reuters and KPMG’s depth of sales tax expertise, KPMG can make a run at the small and mid-market if they choose. However, the way the service is delivered will need to change from a return prep factory to an off-premise sales tax employee.
Other recent “Sales Tax Outsourcing” posts by Robert Dumas:
- Outsourcing the Sales Tax Department: 4 Key Factors to Consider
- Sales Tax Outsourcing - You Can't Be Half Committed
- Sales Tax Outsourcing – Walking the Performance Tightrope
- Sales Tax Outsourcing - Cost Reduction Not the Priority
- What Does KPMG Sales Tax Buy Mean to Small – Midmarket?