Case Study

Leveraging Agility, Experience, and Technical Depth in a Complex Project

SUMMARY/OVERVIEW

How Co-Sourcing With BDO Transformed a Medical Device Manufacturer’s Tax Operations

Year-end financial statements and tax provision calculations prove challenging for most companies. The demands of tight regulatory and internal deadlines often compress the heavy workload into a short time frame. Combined with staff shortages and other departmental demands, external pressures might prompt company leaders to lean on outsourcing, co-sourcing, and interim strategic resources, especially when industry-specific technical experience is needed.

The tax resource constraints of a multibillion-dollar medical device manufacturer comprising hundreds of legal entities across the globe (the company) made it difficult for the company to complete its tax close processes. BDO leveraged its experienced tax accounting team to support the company’s foreign tax provision processes. Our successful co-sourcing relationship resulted in the company choosing us as its sole trusted tax advisor.

Key Takeaways

Enhanced Tax Provision Processes

Reduced Costs by Remaining Under Budget

Improved Accuracy and Timeliness of Regulatory Filings

BDO Employee Happy
The Challenge

Addressing Tax Provision Work on a Large Scale

The company’s internal tax team faced challenges in completing tax provision work on time for several key reasons, including:

  1. Scale

    The company needed to calculate current and deferred tax provisions for each of its many legal entities. State, local, and international laws and accounting standards affected each entity’s tax requirements. 

  2. Technical Knowledge

    Both the internal tax team and a prior external provider had to act quickly, given tight deadlines. Personnel with experience with the tax provision software were also critical. 

  3. Resource Constraints

    Daily accounting operations continued alongside year-end tasks, which risked overburdening the internal team.

Co-sourcing with a trusted provider could provide the company with the skilled interim staff it needed.

BDO Employee Happy
The Approach

Acting on Immediate Needs With Future Considerations

Assuming a lead role over the life of the eight-year project, we continuously supported the company’s interim and annual tax close, working within the short time frames and competing deadlines for tax and financial reporting. Our team leveraged its operational tax experience and industry knowledge to continually monitor all aspects of the project, ready to pivot and realign resources as needed.

BDO team members knowledgeable in the company’s tax provision software promptly began reviewing work prepared by the Company’s local country teams. We helped ensure accurate and timely completion of the non-U.S. legal entity tax provision calculations and prepared audit-ready documentation.

At times, the company reached out for support with technical accounting and tax questions. We responded immediately which oftentimes involved researching international and local tax laws to advise on the correct tax treatment for transactions. By raising awareness of events that can trigger technical implications on tax calculations, we provided actionable insights for future tax years. We also provided insight relating to “best in class” process improvement opportunities.

BDO Employee Happy
The Results

Achieving Stable Tax Operations

Over the multi-year project, our team provided both tax and tax accounting technical depth, operational tax experience, and responsiveness to help the company overcome significant challenges, including: 

  • Deadlines

    Because of the high-quality work and guidance our team delivered, the company consistently met deadlines. 

  • Budget

    Despite several project expansions, our team completed work on time and under budget, resulting in cost savings for the company.

  • Controls and Compliance

    Our team’s guidance led to more favorable internal control conditions and accurate compliance testing.

  • Staffing Relief

    Our co-sourced and interim staff eased the internal team’s workload, enabling them to work on the company’s other strategic initiatives and business operations.

Our co-sourcing relationship assisted the company with an extensive amount of tax provision work that could have otherwise overwhelmed the company’s internal team. Not only did our involvement allow the company to meet strategic obligations with timely and accurate submissions, it also allowed the company’s internal teams to focus on other important objectives. Further, by raising awareness of events such as transactions that can trigger technical implications on tax calculations, we offered actionable insights for future tax years. 

Learn more about our Income Tax Accounting services.

By co-sourcing work with our team, the client overcame staff shortages and limited resources to improve its tax close processes. Our responsiveness, reliability, and technical depth — as well as our ability to leverage our international scale — provided timely results with long-term positive implications for the client.
Michael Williams
Tax Principal, National Income Tax Accounting (ASC 740) and Tax Risk Services Practice Leader

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