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The six features you need in a partnership tax platform

Allocation and tiering technology comparison: PartnerSight® vs. others

Aug 03, 2021
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Private equity Real estate
Innovation Digital evolution Tax technology PartnerSight
In the last five years, there has not been much buzz around allocation and tiering technology, as more general business management software took center stage. That all changed in 2020 with the introduction of PartnerSight®, the revolutionary partnership tax technology platform from RSM.

Speed, quality, and transparency top the list of must-haves for finance and tax execs tasked with maximizing their investors’ returns. Whether you are representing a private equity fund, real estate fund, hedge fund, law firm, or other partnership, your tax technology options are evolving.

RSM’s partnership tax services team of technology development veterans share their experiences with what’s available on the market today. You can check their responses by downloading the scorecard to fill in as you research PartnerSight and the alternatives.

Who makes allocation and tiering platforms?

The Big Four all have a version of the allocation or tiering platform—RSM is the first middle market provider to offer a platform, PartnerSight, and it was developed in 2020.

Not much has changed in the last few years on competitors’ platforms. They are limited by the technologies they were built upon. To make updates and to do it right, these providers would have to pivot to modern technological architecture, which would be cost-prohibitive. Historically, competitors’ systems were built to solve a one-off client or industry problem that resulted in several different systems with different capabilities. They do many things, but they have difficulty working together.

Which platforms offer premium allocations capability?

PartnerSight can handle any type of allocations, including break periods, which is unique to PartnerSight. Other than that, it is hard to differentiate on allocation capability alone. All of the options are well-vetted and almost ubiquitous.

Performance is the main difference. Because of PartnerSight’s infrastructure, the speed we have here is better, particularly when working with more complex structures.

Which platform offers premium tiering capability?

Every provider has some tiering capability but not a holistic financial services approach. A lot of providers tout that their software is “established” when, in actuality, the inability to evolve the technology creates challenges. 

Some other tiering data options are also limited to five or so tiers. PartnerSight can work with as many tiers as you have, and it is still easy to surface data at any point in the review process.

Which platforms provide clients with easier access to data?

RSM made reporting a priority in PartnerSight. Other platforms are primarily focused on allocation and tiering with limitations on reporting capabilities. Today, you can’t get away with having a technology platform in which reporting isn’t a top priority.

With PartnerSight, you have access to your data on-screen in real-time. Typically, with other platforms, you only get reports out in Excel and you can make changes to those reports. With PartnerSight, you can view changes on-screen with your engagement team.

RSM’s team has a combined 200 years of experience. Our specialists know what clients are asking for and that’s all built-in—we know tax and we know technology.

Which platforms provide centralized data aggregation?

First off, we have to define centralized data aggregation. If you define it as housing a data set where you can do all your work with it, what you’re really saying is that you need a platform that is the single source of truth. At least a couple of the other platforms provide similar centralized data as PartnerSight.

PartnerSight is unique in that a client’s entire structure is contained in the system and can be reviewed holistically in a one-stop-shop.

Which platforms integrate easily with your existing technologies?

The ideal situation is a platform that works with your enterprise resource planning (ERP) systems. A new fund or venture in the process of selecting an ERP system could bring RSM in at the beginning stages so we can make sure the tax requirements are satisfied by the accounting requirements.

RSM can easily, in a structured format, ingest data from an ERP system and get it ready for PartnerSight. Our platform also allows us to reach out to fund administrators, so we can ingest their data and automatically push it along to tax calculators.

PartnerSight is not a one-size-fits-all solution; it’s a solution tailored to your needs.

Which platforms have a modern architecture?

Modern architecture needs to be fast, efficient, and scalable. No matter who is in the system and what's running in the system, your expectation is it will perform. That’s what you see with PartnerSight. With cloud compute, nothing slows down the calculation engine.

Other systems were built with capacity limited by on-site servers rather than a cloud-based information structure. The issue with on-site servers is you pay for them when they are sitting idle, and time is money.

RSM has a prescriptive innovation model that goes beyond rectifying simple mistakes. We have a larger vision to build in new features regularly—especially the 704(c) and state capabilities—and we are committed to receiving feedback on the process and components all along the way.

The takeaway is: The other systems do a lot but are very rigid and are hard to surface data from the CFO’s perspective.

Which system offers the maximum value?

PartnerSight by a landslide. The value of an allocation and tiering platform comes from the ease of accessibility and from being able to come in and get your data when you need it without any additional setup time. We feel we are unique in being able to offer PartnerSight to the middle market in a way that is affordable, fit to your business, and scalable.

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