BDO USA acquires TAXPE
Top 7 Firm BDO USA has announced the acquisition of TAXPE, a firm that focuses on end-to-end income tax reporting processes for large corporate tax departments, effective April 1.
Scott Hice, CEO of TAXPE, has joined BDO as a partner and national leader of BDO’s Tax Transformation Services practice. TAXPE has previously worked with more than 300 companies on tax performance projects involving tax provisioning and compliance software enhancements.
"It’s generally looking at how the tax department delivers all of their deliverables, going from the source, whether it’s the process itself, the documentation around the process, and how do they do their day-to-day, month-to-month, quarter-to-quarter and year-to-year activities, all in driving towards largely delivering the tax provisioning and the tax returns globally," he told Accounting Today.
BDO's acquisition aims to help companies navigate the web of tax laws and regulations through improved processes and technology to respond to policy changes, while creating a more efficient work environment and generating value for the business.
“BDO is seeing a huge increase in these types of projects, and BDO is growing quite a bit, so to have Scott and his team come over is going to help us service our clients better," BDO Tax Transformation Services managing director Barbara Torzewski told Accounting Today. "Together we can really build some things that are what our clients are looking for.”
BDO USA ranked No. 7 on Accounting Today’s 2019 list of the Top 100 Firms, with $1.47 billion in annual revenue.
Financial terms of the acquisition were not disclosed, but the deal is expected to double the size of BDO's Tax Transformation Services practice. The acquisition will bring more Fortune 500 clients to BDO, along with new technology.
"Besides the clients and our team, we have got quite a bit of tools and accelerators in place around technology," said Hice. "We call these tax power tools. These are tools to better deliver and better manage the processes for clients. A significant part of these process improvement projects relate to software and the use and optimization of software, so we have a lot of tools around those that can enhance BDO’s tools as well."
He sees advantages in joining BDO. "From my perspective, when it was TAXPE, it was a smaller company than BDO worldwide, so it’s allowing my team to join a proven team and also an existing proven large global firm that has the backbone and structure that allows us to focus totally on the projects rather than on a lot of the administrative tasks," said Hice.
The acquisition will also supplement BDO's ability to service its corporate tax clients. "There’s a huge uptick in corporate tax departments related to technology, and we’re really not able to keep pace with it, so having Scott and his team and their years of knowledge and their experiences is going to just further our relationship with our clients and be able to provide more of these types of services," said Torzewski.
The Tax Transformation Services practice is a growing area for both firms. "It’s really enabling the client’s teams to be more efficient and effective, so it’s about changing and updating processes, understanding data formats, the timing on data, allowing the company to use tools and the existing resources to turn around the deliverables in a faster manner," said Hice.
They see the need to help clients with automating the corporate tax process. "The goal is to help the people in the proper locations to be able to do value-added work," said Torzewski. "A lot of tax jobs are associated with manipulating and managing a lot of data, so the more that you can automate and improve the process, the more people in those jobs can do the analysis and the things that are value-added and help businesses with decision-making."
"Trying to get the tax teams at these large corporate tax departments to focus more on taxes rather than data manipulation and spreadsheets and things like that is really enhancing their jobs and their work life and the efficiency and effectiveness," said Hice.
The effort can also help companies deal with all the changes in the Tax Code under the Tax Cuts and Jobs Act. "There have been a lot of changes in the tax departments," said Hice. "It’s not as if corporate tax teams are doubling or growing in terms of the number of people. Typically they’ve got to get the same amount of work done or more work done with the same amount of people so they’re looking for ways to make that happen without having to hire more staff."