Does work keep getting in the way of getting your work done?

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stopsignTemple’s Trivia:  It’s Friday afternoon, and Boss #12 comes to your office wanting to know the status of that report…  And did you take care of this contract with the customer from that company?  Do you:

  1. Explain that you sent that information out last week and you’re still waiting for responses from several key respondents.
  2. Say, “I was just finishing an email to you about that,” then feign leprosy or Ebola exposure so you can be excused for the afternoon to catch a baseball game, hoping Boss #12 forgets the question.
  3. Start calling coworkers, vendors, contractors, or more and ask the exact same question in hopes that someone, somewhere has a copy of an email on something.
  4. The question is not asked at all since Boss #12 logged into Trident’s Poseidon portal and had the answer 10 minutes ago.

It’s a tricky call.  On the one hand, option B could allow you to have an incredible day off (think Ferris Bueller).   On the other hand, trying to get a day’s work done can be difficult if work keeps getting in the way!

Who has the time to spend hours or even days tracking down assets, contracts, vendors or related information?  Ideally, option D would be the answer every time.  In fact, I find that a successful employee is able to retire before anyone learns their name.  Why?  Because they are so efficient, no one needs to track them down and ask them questions.  Alright, so that isn’t really true, but if you have access to the information at your fingertips, why contact that employee?

One of the great things about Trident’s Poseidon system is its ability to be something helpful/useful/valuable to everyone as a central repository to hold all the data.  Thanks to an overwhelming need for option D, we have an end to end solution for administration, document and workflow management.  It’s an exciting time at Trident.

The expansion of Trident’s development team has allowed for enhanced catering to individual client’s needs.  In fact, recently we launched a new landing page for several of our clients in Poseidon.  Now, when logging in, they can see a dashboard of their most pressing Maintenance or Contract Renewals.  We call this the “stoplight page” because it breaks down renewals coming due into red, yellow, and green categories based on their renewal date.  Every day we strive to add cost effective elements for our clients that takes the work out of their workday.  This particular innovative view increases the speed in which a question can be answered.  It also allows other users to log in and view the same information, so they too have a real time view of what is happening.

Ingenious!  Now you can answer questions before they get asked.  With all that work getting done, you will have a lot more free time at work to … uhhhm …  work.

Complex Tax Issues in IT Don’t Always Require Complex Solutions

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taxPerhaps the only consistency regarding sales tax is its inconsistency. Each and every state has nuanced rules when it comes to what sales are taxable and at what rate. Some municipalities add another layer on top of what the state already levies. In today’s economic climate, the state and local tax men are leaving no stone unturned in their attempt to balance their budgets and fund programs while taxpayers are reviewing expenses to find ways to save.

In its most basic form, sales tax is an amount levied by state and local governments on the sale of goods and services to individuals or businesses located within their jurisdiction, usually calculated by applying a percentage rate to the gross sale amount. Sales tax is collected by the seller at the point of sale, whereas use tax is self-assessed by the buyer when no sales tax was collected by the seller on a taxable purchase. State laws vary wildly in terms of what goods and services are taxable.

In the IT realm, especially with respect to software licenses and maintenance contracts, things can get pretty complicated. In the state of Illinois, for example, there are many rules and tests that may apply to determine whether software and any related maintenance contracts are considered taxable. Below is a basic framework for determining the taxability of software purchases in Illinois.

(1) Types of Software:

  • Canned (“off the shelf”) is prewritten or substantially prewritten and is considered taxable
  • Canned computer software is considered taxable tangible personal property regardless of the form in which it is transferred or transmitted
  • Customized software is not taxable, but the definition of customized software is murky at best

(2) Ownership (a five-part test exists to determine the following):

  • Ownership of or title to software is transferred to buyer – taxable
  • Ownership of or title to software is not transferred to buyer (i.e., software is licensed or leased for a predetermined time period) – non-taxable

The taxability of software maintenance, however, follows a somewhat different set of rules:

(1) Underlying software is non-taxable – related maintenance is most likely also non-taxable

(2) Underlying software is taxable (based on the framework above):

  • If maintenance is mandatory component of the software usage or if maintenance includes patches and updates for the software – taxable
  • If maintenance is optional and does not include patches and updates for the software – non-taxable

While it is likely your tax department’s responsibility to complete the analysis and make the determinations regarding the taxability of any purchase, they are certainly not the only players in the game. For example, your IT folks typically decide what is needed and your procurement team may handle how everything is ordered. Working independently in an attempt to address their responsibilities in the transaction can have unintended consequences. Without a well-mapped procedure in place, these responsibilities can overlap or countermand each other and create delays, increase the risk of penalties, denied service, noncompliance, and denial of access to the software itself.

At Trident, these are issues we address on a daily basis. These issues require careful coordination between your requestors (i.e., the IT staff), purchasing department, and your tax team. Who is authorized to make the determination with regards to the taxability of any particular purchase? Is this decided before a purchase order is issued or is it challenged after an invoice is received? If you wait until an invoice is received to dispute any sales tax charged, how many times does each party in this transaction have to get involved before payment can finally be authorized?

Recently, one of Trident’s Illinois customers came to us with this very issue. Our team at Trident immediately saw this as an opportunity to do what we do best: proactively manage our clients’ information flow to help save them time, money, and resources. Our client asserted that their software maintenance purchases were exempt from sales tax, but this claim was made well after the invoices for these purchases were received. The internal process lacked a standardized method for proactively communicating their exemption claim to vendors. Further, claiming this exemption after the orders were issued resulted in payment delays, exposure to late fees and denied support or entitlements, to say nothing of the tension created in what were otherwise extremely positive vendor relationships. At the same time, the vendors were indifferent as to the claim (other than collecting proper documentation) but concerned with the delays and confusion that ensued.

To streamline the process of claiming this exemption, Trident’s development team worked with our customer’s purchasing department to integrate verbiage into all of their purchase orders to claim a specific Illinois exemption for all software and software maintenance purchases. The result is all valid software and software maintenance invoices will be received without sales tax and can, in turn, be paid within terms. The tax department can review whether or not the transaction properly meets the exemption standard and remit use tax if appropriate. Every role can now complete their function without disrupting the defined desired outcome. By doing so, we drove operational process efficiencies while acknowledging the nuances of the underlying tax matters. At Trident, we believe that optimal solutions are rarely as complicated as the issues themselves. Developing straightforward and repeatable procedures are at the heart of reducing complexity and risk within any organization.

We are always looking into innovative ways of assisting your teams with all sorts of challenges. Feel free to connect with Trident (barmstrong@www.trident-it.com or 608-276-1901) if you have questions about how we can help with the intricacies of your IT procurement processes.