Meeting global tax challenges takes a good software solution
Need to sneeze anywhere in the world, and the tissue you’ll reach for is likely made by Kimberly-Clark. Kleenex, Scott, Huggies and Depends are just a few of the well-known Kimberly-Clark brands sold in more than 150 different countries.
And in about 70 of those countries, the company needs to pay income tax, says Patrick Callahan, Director of Tax Reporting for Kimberly-Clark. “Like many companies, all our global tax accounting was done in Excel,” Callahan says. “We recognized that was inefficient, but we could live with it on the U.S. side, because we had control of it.”
Trouble is, the company had very little visibility into what was happening in all those foreign jurisdictions. “We didn’t have a solid understanding of what and why things were being done,” Callahan says. At the same time, they realized the greatest time savings for the organization would come from streamlining international provisioning and reporting.
Kimberly-Clark partnered with Ernst & Young Australia to develop Global Integrator, the newest software solution from CCH. It met the need for a Web-based product that would handle both U.S. and local jurisdiction reporting. “Other solutions were too U.S.-centric,” Callahan says.
The corporation started transitioning its 200 non-U.S. business units to Global Integrator in 2006. That did away with two completely separate Excel processes that ate up a lot of time.
“The first year we saved 4,000 hours in the U.S. tax department. In the second year we learned from what we had done, made some modifications, and saved another 5,000 hours. So over the first two years we saved about 9,000 hours,” Callahan says.
The corporation was able to complete its 2006 U.S. federal tax return 38 calendar days earlier than the prior year. Similar reductions were achieved in its Canadian return processes. And it was all done against a backdrop of increasing regulations (SOX 404, FIN 48, M-3 and e-filing mandates) and an increasing level of detailed information retention.
Some of the 9,000-hour total savings involved reduced external consulting, Callahan says. But the 40 professionals and support staff in Kimberly-Clark’s tax department now spend the time on higher-level activity, not return processing. “They can dig deeper into what’s going on and identify strategic opportunities,” he says.
What about the global tax bite? “Without increasing head count, and while maintaining a flatter budget, we’ve been able to reallocate compliance dollars to planning,” Callahan says. “That’s a win in today’s environment.”
To download a brochure on Global Integrator, click here.