OSS Implementing: Best Practices for Compliance. Tuesday, April 14, 2015 8:30-9:15 a.m.

OSS Implementing: Best Practices for Compliance Tuesday, April 14, 2015 8:30-9:15 a.m.

Moderator: Sharon Thomas, VP & Consultant, Technologies Management, Inc. (TMI) Speakers: Mike Weller, Senior, Business Consultant, Eztax Joe Solana, President & COO, GSAssociates, LLC Randy Minervino, VP, Sales and Marketing, Profitec Billing Services

PLEASE SILENCE YOUR CELL PHONES THANK YOU!

OSS Implementing Best Practices for Compliance Mike Weller, CPA EZtax Services, Inc. Copyright 2015 by EZtax, Inc. Overland Park, KS 66212 CONFIDENTIAL AND PROPRIETARY

Registrations The Rule: If you are collecting taxes they should be remitted! Should I register before I remit? Timing, data, signatures required, etc. are critical in order to avoid a drawn-out process Consequences of Applied For Verify you register for what you really provide Document any interpretations and conclusions Renewals: Annotate that initial research is still valid Categorize: When statutory changes occur easier to find Copyright 2015 by EZtax, Inc. Overland Park, KS 66212 CONFIDENTIAL AND PROPRIETARY

Registrations (cont.) Document your discussions with the DoR/IRS/FCC Name, Title & Department Date & Time Key Discussion Points If a misinterpretation has occurred the regulators are more understanding when you have the documentation and that there was a good-faith effort Build a rapport You may be talking to the person again (or want to when they are helpful) Copyright 2015 by EZtax, Inc. Overland Park, KS 66212 CONFIDENTIAL AND PROPRIETARY

Filing & Related Schedules Know the Filing Deadlines Verify if the filing requirement is Received By, Postmarked or Electronic Notices are generated from this simple mistake Maintain information for at least 3 years, but check with jurisdictions/regulations for variations Know the law! You may be requested to supply data for more years than are legally required in an audit You can question why the data is needed when it is beyond the legal scope to avoid the costs of obtaining the data unnecessarily Copyright 2015 by EZtax, Inc. Overland Park, KS 66212 CONFIDENTIAL AND PROPRIETARY

Inter-departmental communication Communicate with Other Departments Be connected with your Sales Dept. to understand (and educate them on) tax ramification of new products or bundling of existing products Request IT to alert you to any changes in the billing, taxing or other systems Consequences Potential inconsistencies in the tax treatment of items sold Jurisdictional auditors will generally select the higher tax rates regardless of underlying products or internal breakouts MONEY Copyright 2015 by EZtax, Inc. Overland Park, KS 66212 CONFIDENTIAL AND PROPRIETARY

New Trends States (and sub-jurisdictions) are continuing to require more online filings Shifts labor from the DoR/Finance Dept. to you, the customer Be aware of the deadline shifts from paper to online (ex. 5:00pm cutoff) Net-Neutrality New law, legal challenges/lawsuits pending Early consensus is FCC will apply Federal USF to internet, thus broadening the revenue base and, therefore, should lower the rate How and how quickly will states/local adopt changes Stay tuned Copyright 2015 by EZtax, Inc. Overland Park, KS 66212 CONFIDENTIAL AND PROPRIETARY

Summary Doing your research (the earlier the better) Documenting your findings Documenting your processes and training the staff Cultivating resources at the jurisdictions Know the filing dates and process accordingly Keep data (& supporting information) at least 3 years Include additional documentation when needed (explain credits applied or other situations) Stay connected with other departments & educate them Copyright 2015 by EZtax, Inc. Overland Park, KS 66212 CONFIDENTIAL AND PROPRIETARY

Competitive Advantages EZtax offers YOUR TOTAL TAX SOLUTION We take the STRESS out of Filing! EZtax acts as YOUR Compliance Department Compliance completes tax returns, prepares checks and preforms mailings based on due dates throughout the month Discounts for vendor compensation and early/on-time filings are listed as a reduction in liability and not kept by EZtax Client maintains own checking account Ancillary Services Offered Registrations, renewals, audit support, account reconciliations and notice resolution Copyright 2015 by EZtax, Inc. Overland Park, KS 66212 CONFIDENTIAL AND PROPRIETARY

Telecom Billing, Taxation & Compliance THE LATEST IN TECHNOLOGIES AND STRATEGY FOR TELECOM PROVIDERS. MATCHING SYSTEMS & PROCESSES TO MEET CARRIERS CHANGING & COMPLEX BUSINESS NEEDS Business, Operational & Compliance Support

Current State Integration of new product libraries will require: OSS/BSS Billing requirements Taxation requirements Compliance requirements But there are other requirements that should be considered.

Forgotten BSS Integration Requirements: Taxation Mappings Compliance/Regulatory Filings System Performance Testing & Validation Tax Data Analysis & Improvements Business Risk Analysis Regulatory Review DOR & SOS Licenses Tax Research Tax Projects Integration Planning

Origin of OSS Telecommunications companies built integrated operational support systems in order to tie in: Inventory Control/Procurement Provisioning Network Management Service Assurance Automated Billing (with taxation secondary function)

Enter BSS Integrated Business Support emerged in earnest in the early 2000 s coinciding with CLEC proliferation. Order Management Customer Relations Management Billing Rating and Compliance Product Management

Most B-OSS Implementations are Incomplete B-OSS initiatives are often born out of necessity which can skew toward one or more segments of the operation, with others failing to perform at the time of implementation. Most implementations fail to look at the entire revenue cycle. OSS tends to be lopsided toward Legacy business units Provisioning CRM Should be more focused on the results Billing Rating Compliance

Concentric OSS Functions The Revenue Cycle Billing/CABS CRM Service Assurance Provisioning Network Mgmt Sys. CDR LCR TAX RATING Provisioning COMPLIANCE

B-OSS Implementation Requirements Implementation is the time to do review and consolidate products and groups. Elimination of outdated products. (Use of Revenue Data) Most billing solutions can accept customized Tax rules to meet the specific needs and opportunities of each provider. This is the time make those decisions. Seek professional assistance for the following: Customer Exemptions. Product Exemptions. Tax Situs. Product Definitions. What does the solution do with the Tax rules and Tax data is what determines the success of the integration. Mapping is the most critical piece of implementation. Failed mapping could cost a concern $(000) that may not be recouped. Specifically where back office unbundling is concerned. Testing of Mapping is the only opportunity to solidify the base for successful compliance and implementation. Relying on internal resources for Mapping is a pitfall. Seek professional assistance.

Product Mapping Worksheet Example Product Description Mapping Requirement Tax Code Description Local number service (DID) - inbound Local number service (DID) - inbound Enterprise call center ILD VTS call termination. Local number service (DID) - inbound Enterprise call center ILD? VTS call termination. Local number service (DID) - inbound Local number service (DID) - inbound Local number (DID) - inbound - either TDM or VoIP - int'l Toll free number service - inbound Local number service (DID) - inbound Universal International Freephone number inbound Mapping based on core service offering of ISDN TDM Mapped as high capacity VOIP per phone discussions. Mapped as high capacity VOIP per phone discussions. Mapping based on core service offering of ISDN TDM Mapped as high capacity VOIP per phone discussions. Mapping based on core service offering of ISDN TDM Mapped as high capacity VOIP per phone discussions. Mapped as high capacity VOIP per phone discussions. Mapping based on core service offering of ISDN TDM Mapping based on core service offering of ISDN TDM Further Explanation Needed HIGH CAPACITY TRUNK LINE DID ONLY (RECURRING) SIP TRUNK HIGH CAPACITY SIP TRUNK HIGH CAPACITY HIGH CAPACITY TRUNK LINE DID ONLY (RECURRING) SIP TRUNK HIGH CAPACITY HIGH CAPACITY TRUNK LINE DID ONLY (RECURRING) SIP TRUNK HIGH CAPACITY SIP TRUNK HIGH CAPACITY INT'L ORIGINATES AND BILLED TO SERVICE ADDRESS IN SAME STATE HIGH CAPACITY TRUNK LINE DID ONLY (RECURRING) WATS INT'L ORIGINATES AND BILLED TO SERVICE ADDRESS IN SAME STATE Mapping based on core service Local number service (DID) - inbound HIGH CAPACITY TRUNK LINE DID ONLY (RECURRING) TBD offering of ISDN TDM Voice on ISDN - network use - PSTN data High Capacity HIGH CAPACITY TRUNK LINE ISDN-PRI (RECURRING) TBD line with voice Intl - ILD - call termination Voip Inbound or Outbound WATS INT'L ORIGINATES AND BILLED TO SERVICE ADDRESS IN SAME STATE Tax Code TBD TBD TBD TBD TBD TBD TBD TBD TBD TBD TBD TBD

R.R.O.C GSA is a leader in advising on OSS synchronicity with Business Practices. R-Regulatory Practice monitors business activity of our client and ensures the Regulatory footprint matches. R-Rating Services and integration gives us complete coverage for the Regulatory Footprint with the highest accuracy. O-OSS business rules are tested to ensure accuracy of reports for: C-Compliance for all indirect taxes and fees, and reports to the jurisdictional authorities.

Randy Minervino Profitec Inc. OSS ALTERNATIVES

OSS ALTERNATIVES OPTION 1 Billing System Billing System CRM Financial Reporting Activations / Deactivations Billing Receivables Management Trouble Management Work Orders Sales Commissioning Taxation & Reporting Advantages low cost rapid deployment Disadvantages operational dependency on-providing vendor

OSS ALTERNATIVES OPTION 2 Billing & CRM CRM Sales Operating System Main Database Billing System Financial Reporting Activations Billing Receivables Management Commissioning Taxation Advantages increases self-reliance best of breed integration Disadvantages increased cost requires internal resources

OSS ALTERNATIVES OPTION 3 Internal OSS CRM OSS Switch Portal Accounting Billing System Advantages increased flexibility decreased operational dependency Disadvantages multiple systems to synchronize requires vast internal resources

OSS ALTERNATIVES OPTION 4 Billing System as Main OSS Advantages increases self-reliance best of breed integration Disadvantages increased cost requires internal resources

Some items to consider which the OSS should support Tax exemption indicators USF charges Other statutory rates which allow exceptions Taxes on all billed charges Bundles and safe harbor treatment

Additional Sample Considerations E-Rate USAC Submitting account invoice information RHCP rural health care program Invoice identified discounts CTF - California Teleconnect Fund 50% monthly recurring discounts on all eligible services USF Universal service fund Identify all active/eligible lines each month

Speaker Contact Information: Sharon Thomas, sthomas@tminc.com Mike Weller, mweller@eztax.com Joe Solana, joe@gsaudits.com Randy Minervino, randym@profitecinc.com

THANK YOU FOR ATTENDING!