WEC Energy Group partnered with ASI to perform a tax modernization project– streamlining the entire income tax function.

A self-described puzzle solver, Yelena Veisman had a particularly tricky challenge on her hands. As her responsibilities grew in her organization, her capacity to deliver quality results shrunk. She felt stuck under the mounting pressure.

Yelena began her role in the early 2000’s managing books for one company. By 2015, her oversight as a manager of income tax at WEC Energy Group had expanded to six companies. The tax department continued to flourish as she artfully juggled the books with precision. Like most regulated utility income tax departments, Yelena and the WEC team are focused on providing quality results to support financial reporting, forecasting, planning, and rate making, all while remaining compliant with all relevant IRS regulations. Their challenges are also similar – how do you deliver on these results with excellence when you rely on complex data from operations and accounting without overworking your team or sacrificing quality? In addition to these issues common to all utility tax departments, in 2016 the challenges were made more pronounced with a large merger, SAP upgrade, and the implementation or replacement of several key financial systems.

“I was drowning in day-to-day work just trying to keep my sanity before the merger even happened. Then our load went from six companies to two dozen in an instant. This wasn’t good for me – I’m a control freak. I wasn’t sure how we would manage.”

Yelena found herself in a situation many tax departments do during a merger– the complexities were outgrowing the team’s capacity to keep up. “It was never fun.”

Accumulating responsibilities and increasing complexities introduced by the merger opened the door for too many questions in her department’s output.

Yelena’s department needed to transform in order to thrive in the new environment.

“A Tax department’s success hinges on the reliability of its data. It got to the point that I was on a first name basis with some of the skeletons in our closet.”

It was time to ask for help. For Yelena, the decision to reach out to ASI was easy. She had trusted ASI’s team of utility tax and technology experts for years to guide her team through software implementations, upgrades, and large regulatory and tax changes. This included the implementation of the Transmission and Distribution Tax Repairs revenue procedure in 2011.

“Blake and team were always willing to listen. We have a great tax department that is extremely knowledgeable and on each project his team came in and said ‘we are equal players’. Collaboration and brainstorming were always encouraged throughout. I knew we could trust them to deliver results on budget and on time.”

Step 1: Assess and Advise

“I didn’t know every single problem in every single company – this unsettled me.”

“ASI took inventory of every skeleton in every closet, found everything we needed, and defined everything we didn’t need.” This included a detailed analysis of all property-related timing differences, ensuring that upon implementation of the modernized approach, Net Book Net Tax was fully supportable under audit and regulatory scrutiny even at the lowest level of functional detail.

This initial phase of tying every timing difference to the underlying financials, prior tax returns, tax accounting, and the tax basis balance sheet, is key to ensuring that any automation effort has the correct starting point, and that all team members can understand and explain every driver of tax financial reporting, forecasting, and regulatory filings.

Step 2: Lay the Foundation for Modernization

While it is crucial to ensure that data is accurate and understandable on Day 1, it is also critical to understand that data is constantly changing. Without the appropriate controls in place, the pristine state of your data will begin to shift during your first financial close and is under attack as you have to account for large internal and external changes to systems, policies, and regulations. Through decades of industry experience, the ASI team understands the most important aspect of any automation initiative is technology that constantly monitors all aspects of your data, and that provides a workflow for the team to easily identify, track, and quickly resolve issues as they are uncovered. Without this focus on technology-assisted ongoing data quality, any investment in data cleansing and automation will be diminished. ASI facilitated the oversight of all processes, automations, workpapers, and software systems at WEC Energy Group.

Step 3 – Automate and Validate

“We needed something to protect the system. ‘A sheepdog’. ASI was the sheepdog – very friendly, very strong.”

ASI helps tax departments cut through the marketing noise of the many automation solutions flooding the inboxes, webinars, and conferences of tax technologists. The first question is not which technology to use, but the identification of the areas where automation should be applied to gain efficiency without losing clarity and understanding of the outputs. ASI worked with WEC Energy Group to understand the flow of data from upstream operations, accounting, and forecasting groups to all internal and external customers of income tax – from Regulatory to Financial Reporting to Planning.

Through this analysis, ASI was able to identify the right opportunities to streamline the flow of information, minimizing the burden on staff, while increasing visibility and understanding.

The Results

WEC Energy Group saw immediate results at the end of the project, including month-end close times reduced from days to hours, tax forecasting processes that were reduced from weeks to less than one day, all while improving the understanding and consistency of data provided to audit, regulatory, and tax compliance. Perhaps most importantly, Yelena and the WEC Energy Group tax department have established a platform for continuous improvement, with the right tools in place to ensure that as new opportunities for increased efficiency are detected, or as the prospect of new regulations or frequent Tax Reform looms, they are able to respond rapidly, building upon the foundation established in 2016. Yelena now manages 40+ companies. Despite exponential growth in responsibility, she is confident.

“I can now tell you everything that’s going on in every company, at any point in time. I have truly absolute knowledge of my data. Especially now that more and more people are working remotely, I can now sleep comfortably knowing everything continues to be sane and as designed.”

ASI tells her if something was processed accurately. “We always try to be upfront with our answers, and our department has established trust based on our confidence in our data. Now, our tax process is always in balance. It shows you all the potential ‘oopsies’ before you go down the road. Now I know any answer I give to our executive team is a reliable one, whether it’s proposing the retirement of coal power plants or rate making decisions, the credibility we have earned with rate making agencies is immeasurable.”

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