How does implementing an automated property tax solution transform daily operations?

Property tax in the United States traces its roots to colonial times. Surprisingly, many aspects of property tax compliance seem frozen in time — evidenced by numerous county assessors still requiring businesses to submit property tax returns via traditional mail, a practice reminiscent of Benjamin Franklin’s tenure as the first U.S. postmaster general in 1775.

For finance and accounting professionals implementing property tax compliance automation, “business as usual” becomes a thing of the past. While advanced property tax compliance solutions can’t alter filing requirements set by jurisdictions, they can significantly streamline numerous aspects of the compliance process.

Let’s explore how adopting property tax compliance automation transforms the daily workflow of finance and accounting professionals.

Many property tax professionals have long resigned themselves to a paper-based compliance process. The reliance on physical documents extends beyond filing returns; businesses must also track and respond to mailed assessment notices, returns, and bills. 

The paper piles up quickly; a survey by Potentiate and Avalara found that 56% of enterprise companies receive between 500 and 10,000 property tax bills annually.

Beyond the burden of managing paper documents, businesses without automation face further challenges. Many companies still rely on manual data extraction at every stage, from filing returns and evaluating assessments to appealing values, paying bills, and building budgets. 

With an efficient solution, businesses can track various property tax deadlines, rates, and rules that vary across jurisdictions. This complexity can lead to costly errors and missed opportunities.

Managing property tax returns, bills, and assessments manually is complex and time-intensive. The exact time investment varies depending on your property portfolio’s size, the number and diversity of jurisdictions involved, and the complexity of how different property types are taxed. However, here is a general breakdown of the time typically required for filing management alone:

1. Data collection and organization can take hours to days, depending on the number of properties and the current state of your record-keeping. This stage involves compiling and structuring all necessary property data, including details, valuations, and tax records.

2. Research and compliance demands several hours weekly, as staying abreast of current property tax regulations, rates, and filing requirements across all relevant jurisdictions is critical due to frequent changes.

3. Tax return preparation often requires several hours per property. This step includes completing up-to-date forms, performing tax calculations, and ensuring information accuracy. Challenges arise when addressing discrepancies or managing complex calculations.

4. Review and approval add more hours per return, which involve scrutinizing returns for accuracy and obtaining necessary internal stakeholder approvals.

5. Filing and follow-up may take several hours per filed return. This stage encompasses submitting returns to appropriate tax authorities and addressing any subsequent issues or inquiries that may arise.

Managing property tax returns manually can take 10 to 30 hours per filing cycle. This time can increase significantly for more extensive portfolios or complex situations to keep your operations organized. Remember, we haven’t included your business’s hours managing property tax bills and assessments.

It should come as no surprise then that both Potentiate and Aberdeen Strategy & Research found that accounting and finance teams spend substantial time each month on property tax compliance tasks.

Property tax automation can significantly enhance your team’s efficiency. A sophisticated solution like Avalara Property Tax minimizes data entry, reduces user errors, and mitigates the risk of penalties. The software keeps your operations organized and frees your team to focus on high-value activities such as in-depth analysis.

As assessment notices and tax bills arrive, you simply scan them into the system for automatic processing. The solution then extracts critical information like account numbers, addresses, and due dates, employing a triple-validation process to ensure accuracy. This streamlined approach allows you to access your data on demand and to generate insightful reports with ease.

Tracking return submission deadlines for businesses managing properties across hundreds of locations can be overwhelming. However, with an integrated calendar feature, staying ahead of crucial dates becomes far more manageable. This tool helps you review assessments before the typical 30-day window closes and ensures timely bill payments, effectively avoiding costly penalties.

Avalara Property Tax also automatically generates returns. The solution keeps the latest forms and depreciation schedules.

Property tax automation provides your team with enhanced visibility into potential cost-saving opportunities. It facilitates quick access to critical information, enabling more informed decisions on whether property tax assessments are fair and if appeals are warranted. This increased efficiency also allows for a thorough evaluation of early payment discounts offered by some jurisdictions, potentially leading to significant savings.

Automation is invaluable for professionals who don’t manage property tax compliance daily. The centralized nature of these solutions allows for seamless transitions, whether you’re returning from a break or handing off tasks to colleagues. This feature supports work-life balance, ensures business continuity, and fosters team collaboration.

The system’s ability to maintain comprehensive, easily accessible records means you can step away and quickly reorient yourself upon return. Similarly, team members can effortlessly pick up where others left off, ensuring smooth workflow continuity. Property tax compliance software is essential for organizations prioritizing operational resilience and team synergy.

The Aberdeen survey analyzed the practices of best-in-class businesses — defined as the top 20% of companies based on key compliance metrics performance. These industry leaders consistently leverage property tax compliance software to achieve superior results. In comparison to their peers, best-in-class businesses demonstrate:

• A 28.3-fold reduction in time and resources devoted to monthly tax processing activities
• A 15.9-fold greater improvement in operating margins 
• Significantly reduced audit-related expenditures

A property tax compliance solution like Avalara Property Tax helps reduce risk for best-in-class businesses by minimizing data entry subject to human error. 

Correct forms and a schedule of upcoming due dates at your fingertips help avoid late fees and penalties.

Should the auditor knock, all your documents are stored in a central repository for easy retrieval.

If managing property tax compliance daily is a burden, find out how Avalara Property Tax can help. Talk with one of our property tax compliance specialists about how automation can reduce risk and give your team more time for tasks that drive profits.

When implementing an advanced automated property tax compliance solution, find out what criteria to consider. Read How to implement property tax compliance automation.