Pain to Progress: Automation Accelerates Federal Adjustments and Reviews
FirstEnergy tracked tax basis for more than 20 entities using Excel spreadsheets developed by an outside consultant. The spreadsheets contained numerous links and formulas requiring significant manual input. Tax team members lost valuable time posting and reposting data and adjustments and re-running the tax basis balance sheet—only to find data had posted incorrectly.
FirstEnergy also spent considerable time each year calculating the change in balance for various M adjustments. They had to download both prior and current year trial balances and run a manual comparison in their workpapers, analyzing timing differences one at a time.
Further, with multiple staff members preparing workpapers, FirstEnergy struggled to maintain an orderly and consistent approach, resulting in difficult and time-consuming reviews and even more manual entry.
FirstEnergy uses CSC Corptax® enhancements such as virtual account to simplify the closing of net income and built-in functionality to automatically post various Schedule M and return-to-provision adjustments. Once remaining Ms are calculated, CSC Corptax® Office instantly posts them in the system, and Point-of-View (POV) pulls out the data for review and reconciliation.
Now, with the adoption of virtual account, FirstEnergy greatly reduces the time and effort it takes to post and repost data and adjustments and to educate staff—and they’ve eliminated guesswork.
Using historical data stored in Corptax, FirstEnergy completely automates the posting of M adjustments that require calculation of a change in balance. For M adjustments that require calculation outside of the tax software, FirstEnergy uses a centralized Schedule M workbook that permits data to be aggregated and processed in a consistent format across all entities and pushed into Corptax instantly. With information now in Corptax, POV pulls the Corptax data back into the same workbook. Preparers can review and reconcile data in real-time, without entering the system.
Another huge plus: the ability to house both provision and compliance data in a single system allows FirstEnergy to leverage information from one process to the other seamlessly. Variances between compliance and provision are calculated and a true-up to the federal return is posted automatically for various adjustments.
The power to populate Corptax with all entities simultaneously and perform data-driven vs. forms-based reviews dramatically reduces time to vet over 30 Schedule Ms. Plus, a consistent and intuitive approach across all entities and adjustments gives preparers a greater understanding of the process and greater confidence in the calculations. With time saved and confidence gained, FirstEnergy accelerates federal return prep and spends more time evaluating the tax impact of related adjustments.
By standardizing and streamlining workpapers, FirstEnergy’s efficiencies quickly add up. They save:
- 3-4 weeks on overall federal tax return preparation
- 40-60 days by automatically computing variances and posting adjustments
- 25% of review time for Schedule Ms