3 questions to ask before co-sourcing your tax function

by | Sep 28, 2021


Co-sourcing and automation are frequent go-to solutions for enhancing operational efficiencies and affective resource management. However, there are lots of important questions that need to be addressed before deciding on an approach. No one size fits all.

What are the true needs of your tax function?

The determination of what a company needs in co-sourcing is a process where you need to understand what everybody does on a day-to-day basis. Who does it? What are they doing? It’s not what everybody believes they’re doing, but actually sitting down and documenting what they’re doing—from the top, the leader of their tax function, to what all the staff members are doing.

You’ll also want to identify the areas that can be realigned or rerouted so that your tax function can focus on what’s most important. There’s a few other things to consider such as sales tax, state taxes, incentive documentation or those non-tax areas such as unclaimed property.


Will co-sourcing be more cost effective for your business? 

Co-sourcing is often a more efficient way to address your tax needs, especially as it relates to specialty areas where you can access the specialist you need in the right amounts and at the right time and in the right balance.

A co-sourcing function should be most likely a blend of both what the company has, as well as the resources that are needed outside. As the company grows, expands, becomes more complex or goes into areas that are new to the current staff, while they can hire people to deal with the volume, they may not be able to hire the necessary people to deal with the complex issues that will show up.

How do you know if co-sourcing is working well?

You’ll know you have a strong solution when you get buy in from all stakeholders involved, and that means both the C suite and the tax team. If you don’t have that buy in, you need to get it.

A strong solution means hammering out clear, documented responsibilities. That up-front effort will pay huge dividends down the road.

And you’ll be able to focus on your strategic goals knowing that your tax function is well aligned. The tax function is working with the other finance functions, C suite is being informed and the co-sourcing people are helping with the functions within the company. If it’s working well nobody, makes complaints.

The last way you know that the co-source arrangement is working is that the strategic plan of both the company and the tax department and the tax planning is being effectively implemented and it’s showing up on the financial statements as well as in other areas of the business.

Questions or Want to Talk?

Call us directly at 972.221.2500 (Flower Mound) or 940.591.9300 (Denton),
or complete the form below and we’ll contact you to discuss your specific situation.

This article was written by Gretchen Valentine, /content/mcgladrey/en_US/about/profiles/ording-tom and originally appeared on 2021-09-16.
2021 RSM US LLP. All rights reserved.

The information contained herein is general in nature and based on authorities that are subject to change. RSM US LLP guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. RSM US LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein. This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer.

RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/aboutus for more information regarding RSM US LLP and RSM International. The RSM(tm) brandmark is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.



KHA Accountants, PLLC is a proud member of RSM US Alliance, a premier affiliation of independent accounting and consulting firms in the United States. RSM US Alliance provides our firm with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.

Our membership in RSM US Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise, and technical resources.

For more information on how KHA Accountants can assist you, please call 972.221.2500.

Two Estate Planning Strategies to Help Protect Wealth

A goal of estate planning is to maximize the wealth that is passed on to one’s heirs. In this video, we’ll discuss how a Spousal Lifetime Access Trust and an Irrevocable Life Insurance Trust may help you minimize estate taxes and protect wealth.

IRS Announces ERC Withdrawal Process

The Internal Revenue Service (IRS) has established guidelines concerning the withdrawal of an Employee Retention Credit (ERC) claim for those employers who now believe they may not qualify. These guidelines, detailed on the IRS’s official website, outline the necessary steps a taxpayer must take to withdraw a claim for the ERC, under certain conditions.

Why the Cost of Customer Acquisition Is So Important

For any business, understanding and effectively managing the cost of customer acquisition is crucial for success. In this video, we’ll explain what it is, how it’s calculated, and how it affects a business’s profitability, cash flow, and overall growth.

IRS releases guidance on Roth catch-up contributions under SECURE 2.0

The Internal Revenue Service (IRS) has recently released guidance on Roth catch-up contributions under SECURE 2.0 Act. This guidance, outlined in Notice 2023-62, provides important information for individuals who are age 50 or older and participating in a retirement plan that allows deferral contributions.

Estate Planning after a Business Sale

After selling a business, it is crucial to update your estate plan to align with your new financial situation. This article provides and overview of common strategies to consider.