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:
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.
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.
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.