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ProwessTraX Prowess Application for TRAnsfer Pricing TaXation with Automated Documentation
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20 Jul 2015 4:43 PM, Shiuli Mishra

Is Prowess TraX really cheaper than Prowess?

Some Transfer Pricing Taxation practitioners we met recently have argued that Prowess TraX is not cheaper than Prowess. We address their concern and clarify the comparison in three generalised questions below:

  1. Question: Prowess costs Rs.80,000 for unlimited use and for the same money one can do a maximum of eight Cases in TraX. So, TraX is not viable if a practitioner conducts more than eight cases.

    Answer: Prowess is incapable to doing what TraX does. So, the comparison between Prowess and TraX is very incorrect. TraX creates a very large part of the documentation required to file any Case. Prowess cannot create this documentation. TraX, on the other hand, creates this documentation. Now, if you include the time that the practitioner needs to invest in every case conducted and then compare the cost with TraX, TraX is a very attractive proposition. It saves costs upto 50 per cent.

    There are other cost advantages in TraX. The user-interface of TraX focuses on the task of creating a Case and so is immediately intuitive to the end-user. This saves the practitioner a lot of time and resources in training new recruits.

  2. Question: Prowess allows flexibility with its unlimited use. It allows the user to run through a Case twice, for example. If every case is to be run in TraX twice, it will increase costs.

    Answer: The main value proposition in TraX is the automatic making of the documentation. Nevertheless, let us consider, for the sake of argument, that a Case has to be done iteratively to find the right peers. After all, the finding of peers is not an automated process. It needs the indulgence of intelligent human beings.

    TraX acknowledges the need for this indulgence. It therefore provides the Report Viewer facility wherein a user can first see the values of companies that share the same economic activity as the target company before executing a Query. The Report Viewer shows well-formatted tabulations of all the information of companies in the Output Sheet. We recommend that you study these before you execute a Query. Looking up information in the Report Viewer is free.

    With this facility, you can avoid running a case multiple times.

  3. Question: Since every Query is charged, it raises the risk in assigning the task of conducting the Studies to Articles/Interns. Studies have to be done now by seniors and this raises the cost of conducting Studies.

    Answer: TraX obviates the need to conduct a Study in multiple stages. Hitherto, many firms conducted studies by first assigning the task of finding comparable companies to Articles / Interns. Their work was supervised and then used by seniors. Although the Articles / Interns are cheap labour (we say this with due respect and with no intention to belittle their labour), but the cost of this approach is high because of the multiple stages involved, the supervision and finally the incomplete job that the Articles / Interns are assigned.

    TraX takes less time and does a complete job of finding and documenting comparable companies. It takes less than a hour to complete one case - from finding comparable companies through documentation. This reduces the effective cost of conducting the Studies.