Top 5 pain points in the K-1 process

4/13/2021

The process of exchanging information between K-1 producers and receivers is fraught with challenges. See how the Crowe K-1 Advantage suite can help.

Pain point 1: Providing/collecting data

Producers must start their process by collecting demographic information through channels such as investor portals, spreadsheets, or even snail mail. Receivers must respond to information requests from each investment manager, repeatedly submitting the same information through different channels that require different login credentials.

Solution:

The Crowe K-1 Exchange flips the information exchange paradigm from push/pull to subscribe/receive.

  • The Crowe K-1 Advantage prompts the K-1 recipient to update demographic information and sign necessary forms just once. This information is posted to Crowe K-1 Exchange so producers can pull this information on demand.
Pain Point 1 - Collecting information
Pain Point 2 - Requesting data

Pain point 2: Moving data

There is not a comprehensive system that manages the end-to-end process of data collection and analysis or K-1 creation and distribution. As producers manually move data from their investor portal to K-1 preparation software and on through distribution, errors can be introduced.

Solution:

  • Crowe K-1 Advantage handles each step of the process, whether the steps are managed by an internal team or an external preparer. Tax directors will have complete visibility to the process and status.

Pain point 3: Lacking standardization

No structure or standardization beyond page one means K-1s vary from year to year and across different partnerships.

Solution:

  • The digital K-1 follows a prescribed schema generated in the Crowe K-1 Navigator solution and seamlessly transmits this data to other K-1 solutions.
Pain Point 3 - Moving data
Pain Point 4 - Lacking standardization

Pain point 4: Fishing for information

K-1 recipients struggle with retrieving from the Schedule K-1 the information they need. They often find themselves weeding through reams of unnecessary information.

Solution:

  • The Crowe K-1 Advantage recognizes the unique reporting requirements of the many different legal entities that receive a Schedule K-1 and creates a standard schema to enable recipients to have all the information needed.

Pain point 5: Playing telephone

Conveying thousands of data points through a tiered partnership structure is like an unending game of telephone. Information needed from the first tier of partnership rarely makes it to the last tier without significant alteration.

Solution:

  • The Crowe K-1 Advantage validates the reported information against a schema to confirm that all the data needed is presented in a consistent, prescribed manner.
Pain Point 5 - Fishing for information

Contact us

Geralyn Hurd - Large
Geralyn Hurd
Partner, Tax Strategy and Transformation Leader