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4 Areas a ‘Services’ RFP Should Address

When it comes to comparing different types of requests for proposal (RFPs), software RFPs would be apples and services RFPs would be oranges. Therefore, tax managers preparing an RFP for a service should keep in mind the differences between the two types, and that the creation of services RFPs requires a specialized approach. On the surface, competing services can be compared in terms of their scope and quality, but these functional factors are influenced by deeper, equally important factors that too many services RFPs gloss over.

When tax professionals compare external service providers (such as sales and use tax returns outsourcing providers, for example), they should look closely at the following factors:

  1. Staff experience and retention: Experience applies to both the outsourcing firm itself (how many years the provider has amassed outsourcing sales and use tax returns), as well as to the experience of the individual returns preparers; retention applies to the firm’s rate of turnover.
  2. Scope of services: Sales and use tax returns outsourcing providers can vary greatly in the scope of services they offer. The returns process consists of preparing and filing returns, funds management, and the handling of notices and credits. Returns providers who do not deliver an authentic end-to-end solution are more prone to miscommunications and hand-off issues that can result in late payments, penalties, or other errors resulting from poor control and weak accountability. An effective RFP should flesh out whether or not an outsourcer provides a true end-to-end returns service with a single point of contact, representing the approach with lowest risk and highest benefit.
  3. Communication and troubleshooting processes: Ideally, a provider will assign a dedicated point person (e.g., an account executive) to the client company. Tax managers and executives may not hold daily conversations with this representative, but they should establish a regular reporting process —and they must be able to pick up the phone and reach this person when necessary.
  4. Client referrals: Few tax executives would hire a new employee without checking that candidate’s references, and the same holds true when hiring an outsourcer. Any reputable outsourcer will be willing and eager to furnish a healthy list of references that operate in a variety of industries.

RFPs should contain specific requests for evidence of performance excellence in each of these areas. By creating an RFP that fleshes out these areas, tax professionals will be better positioned to distinguish higher quality outsourcing partners from the rest. That process starts with an apples-to-oranges realization of the differences between services RFPs and software RFPs — they are not the same.

Please remember that the Tax Matters provides information for educational purposes, not specific tax or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information.


About this Contributor

Stephanie Malin Headshot
Stephanie Malin
Director, Managed Services

Stephanie Malin is Director of Managed Services at Vertex where she is responsible for leading the development of strategic initiatives for the outsourcing business. She has been with Vertex for more than 20 years working in marketing and product management roles for both transaction tax and income tax technology products. Stephanie currently serves on the Corporate Market Strategy Team and leads the Managed Services Task Force. Her prior experience has been with financial and technology companies. Stephanie has a bachelor’s degree in finance from Drexel University and an MBA from Temple University.

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