in Pittsburgh, PA, Philadelphia, PA and Denver, CO. Although Michael started with Coopers and Lybrand in 1990, he became part of the PWC Tax Technology practice when the merger occurred between Price Waterhouse and Coopers and Lybrand in 1999. Michael received his BS in Accounting from Pennsylvania State University and belongs to the Association for Computers and Taxation (ACT).KJ - Although you started your tax career at Coopers & Lybrand, you were ultimately promoted to Tax Partner at PriceWaterhouseCooopers. What was it like to be in charge of Tax Technology at PWC?

MG - I started with Coopers & Lybrand in 1990 and we had the old FasTax automated system. When someone came through to provide us with an update, they would have to take the 5” floppy discs and individually load them on to each person’s computer to download the updated information. Once we gained the server technology we were in a position to start helping our firm clients. We then started to help our client’s bridge in their tax data from their general ledger systems and were preparing tax returns for a number of corporations. We were seeking efficient ways to bridge the information electronically rather than inputting the trial balance information. We started to bridge the information electronically to help our clients with their tax compliance on their tax returns. Eventually this process to become more efficient morphed into a client service offering from our firm.


KJ - What tax technology trend is emerging today?

MG - We see a lot of activity automating the tax provision, the tax accounting FAS 109. Historically, this work has been amongst the spread sheets but with the wave of SOX compliance and the internal auditors pressuring companies to get off the spreadsheets and focus more on internal controls. When you have lack of controls, you have more potential for misstatements or material weakness. When you have restatements, historically tax is one of the top three areas that you will see a restatement.
Now that the tax provision process has come under a microscope, companies are now looking for ways to get this information off the spreadsheets and use an automated process that ties into the general ledger which has controls built into it. This is where are experiencing the most activity right now.

KJ - Please tell us more about Vertex Inc. and what it does.

MG - Vertex has tax software built for the compliance side and now the immediate focus and energy is on the tax provision area. We call it the “Automated provision with a vision”. We have next generation products and a web based solution that it is really taking a look at the entire end to end process including tax compliance, tax accounting, reconciling the tax accounts and to have full multi-ledger capability. This product is called Global Tax Office and it is geared to multinational corporations. This software is a web native, enterprise scale global tax accounting solution that effectively adjusts to the numerous challenges facing multinational corporations in a single comprehensive system.



KJ - What does web native mean?

MG - Web native means that the system is built from the ground upon a true web platform. It means it is not just a Windows-based system with web pages on the front end.


KJ - Please describe in more detail Global Tax Office.

MG - It is what we describe as a tax accounting sub leaguer that calculates tax provisions and produces tax journal entries that brings the tax accounts into the general ledger for each legal entity. We support APB28/FIN 18 interim reporting and FAS109 annual disclosures and provides dual ledger capabilities to track local statutory accounts, statutory to GAAP adjustments, reported GAAP and the related tax provision.


KJ - What are you encountering as you talk to multinational organizations right now?

MG - There is much uncertainty right now because you are hearing that we are moving to IFRS (International Financial Reporting Standards), and then you hear that there is push back because people think it may not happen for years to come. At the same time, you hear from industry experts that it is closer to being implemented so we find that some of our clients are already adopting IFRS in the next couple of years. They are internally getting ready for it because they think it is inevitable.


KJ - Based upon what I am hearing from tax departments around the country, leading companies are already preparing for the conversion. What can you tell me about this from your perspective?

MG - We support this fully in our system right now. We feel we have a completely scalable enterprise system; we see a lot of movement with tax getting closer to IT and Finance. Finance may have a technology road map and we want to make certain that tax is on that roadmap. We look at how our system interacts with the general ledger system, SAP, Oracle, Hyperion because this is important to the tax department. We now see many clients moving to a web based service oriented architecture. We see more web services and a lot of applications, including finance applications that are being offered as services oriented architecture or software as a service. This is more of a vendor hosted solutions model. We see a lot of our clients moving to a hosted solution because they do not want to take in the infrastructure required. They feel very comfortable having us host this for them.


KJ - For clarification purposes, you are telling me that you are seeing the trend towards hosting by a service provider such as Vertex. Can you tell me whether the hosting is done in the US or outside the US?

MG - All of our service is provided from the US as we are not an offshore company. Our clients do not have to worry about the IT overhead or purchasing servers because they just access our application through a web interface to prepare the tax return and the tax provision. We provide the infrastructure, including the servers and secure backups for our clients. We back up everything as well as maintain and archive it and at year end they receive a copy so they do not have to worry about storing it. Our clients do not want to take on the additional expense of maintaining the servers or having the cost of additional IT employees handle them. We host the hardware and software infrastructure so the companies can do their tax compliance and tax provision through our service.
We see a lot of our clients looking for an end to end enterprise tax solution. What this means is that we are going to take the information from the general ledger, we are going to do the calculations for tax, either income or transactional tax, we are going to store the data, we are going to warehouse it, report off of it; and we are also going to produce the tax returns. We will also support the management of the data, the workflow and document management aspect of that data, and the on-going audit support; thus realizing a total end to end solution for our clients. Our goal is to improve tax processes and controls so that companies can focus on more strategic high value tax planning initiatives. We support companies on the direct and indirect tax side. We already have modules for Value Added Tax (VAT).