Welcome to part 5 of our series on combating sales suppression. In our prior posts, we have discussed the magnitude and simplicity of perpetrating fraud via sales suppression, introduced some procedural changes you may want to consider implementing, and why you may want to avoid pursuing criminal prosecution. Let’s shift our focus to scaling productivity.
Can you imagine achieving $5,000 per hour of audit productivity? Many states are tracking their hourly audit productivity in the $100 to $200 range while other states are achieving up to $500 per hour. Due to the magnitude and history of sales suppression, focused audit selection and highly advanced tools for detecting fraud easily enable achieving the goal of $5,000 per hour audit productivity. To achieve this level of productivity, you are going to need to make changes and additions within your business process.
Believe it or not, the key changes do not include changing your current staff or hiring additional staff. Critical changes do include the following:
- Strong leadership that embraces implementing new processes and methods
- Advanced analytics to support laser focus on audit selection
- A specialized partner that can ensure results
- Senior audit leaders that can ensure audits remain fair and equitable
- A streamlined business process that minimizes work in the field
- An iterative approach that supports implementing continuous learning
The first big secret to driving a successful sales suppression intervention program is strong leadership. Your leaders are going to need to craft and communicate a strong vision. While it is important to listen to dissenting opinions sympathetically, your leaders need to remain steadfast on making the changes that facilitate high productivity. By understanding opposing views, they can adapt the program to boost your department’s success. They will also need to demonstrate a sincere and on-going involvement in the program execution.
The next two big secrets to achieving this level of hyper-productivity are 1) the use of advanced analytics to identify the least compliant taxpayers and 2) a specialized partner with the expertise and the tools to isolate sales suppression. If your team attempts to resolve this on their own, you will not have the benefit of nationwide learning and a team of experts adapting to the latest fraud techniques. After a huge variety of cases are resolved at high-volume and high-velocity, fraudsters will constantly shift to new methods. A strong partner will help you keep pace with their evolving methods.
You will also need to ensure your audit selection team has a vigilant focus on remaining fair and equitable. This will require on-going review of audit results with a focus on widely distributed geographies, industries (i.e., NAICS code), and company sizes. It is possible that more audits will focus on specific industries that are more susceptible to perpetrating fraud. With adequate analysis and reporting, you can demonstrate that you are focusing on the least compliant tax payers with a very fair and equitable approach.
An additional element to boosting your hourly productivity is minimizing your work in the field. By limiting fieldwork to audit initiation and records collection, you will see a drastic increase in production when leveraging your partner and finalizing the audit as a desk audit. If you collaborate with a partner like XDS, you will see rapid a turnover in audits and increase revenue and overall compliance for the audit period and future filings with minimal effort.
The final element to delivering hyper-productivity is a focus on continuous learning through iterative execution. If you are just starting a sale suppression intervention program, you are not likely to achieve perfection immediately. Delaying while waiting to achieve perfection prevents your taxpayers from receiving all of their benefits. You will achieve better results by starting small iterations of 10 audits per week, review the results every other week, adjust your processes, and initiate another batch. By working in increments that have scheduled learning sessions, you will have an opportunity to fine-tune your processes while boosting productivity.
XDS is not here to make vague recommendations. We are here to be your partner in an efficient, quick, and productive process along with guiding you through the critical changes.
