It’s well known that manual processes are prone to error. When it comes to property tax, relying on spreadsheets to enter, review, and analyze data can reduce productivity and pull specialized employees away from higher-impact tasks. Data entry and re-keying can introduce expensive errors into datasets, impacting projects that require clean, accurate data: projections, forecasts, and budgets among them.
While we intuitively know manual processes are error-prone, how costly are these errors – and lack of data accuracy - to your business? We explore that question in this blog post.
According to Gartner, inaccurate data costs businesses an average of $15 million USD annually. And poor data quality doesn’t just hurt your bottom line. If data errors affect customers, it can impact their perception of your company. Further, internal initiatives can be slowed or halted if data needs to be re-checked for correctness.
Fortunately, the impact of poor data quality can be managed with proper planning. The “1-10-100 Rule” highlights the importance of prevention over correction.
What is the 1-10-100 rule? Basically, it’s financially smarter for businesses to invest $1 towards prevention than to incur a $10 fine to correct the mistake. In turn, spending $10 is significantly better than a $100 failure cost associated with an overlooked error.
Clearly, manual processes can have a significant impact on data integrity and accuracy. While you can implement checks and balances – such as approval layers and having a colleague double-check your data – these can be time-consuming. Thus, limiting human intervention can improve efficiency and reduce the chance of errors.
While every company will have their own tailored strategy for ensuring data integrity, software that offers these two key features can help reduce errors and ensure your property tax data is reliable:
We've spoken at length about the importance of data centralization in other blog posts, so won't dive into it here. Data automation promotes business efficiency and allows specialized employees to focus on high-impact activities, such as analyzing data rather than manually inputting it. According to Smartsheet, 97% of workers believe that implementing automation in the workplace can benefit the company. For instance, automating data collection and entry can reduce manual labor and help prevent data from being lost.
While automation can be used in a variety of property tax processes, two key areas are related to data entry and data transfer/sharing.
Tools like itamlink Capture use Optical Character Recognition (OCR) to extract property tax and assessment data directly from bills. Implementing technology like OCR can increase your team’s efficiency. In some cases, this type of software can reduce data capture time by 75% when compared to manual processes.
As many companies still receive the majority of their tax documents by mail, the time savings quickly add up! Imagine a multi-national that receives 78,000 tax bills each year. If they spend 5 minutes manually entering a single bill – a reasonable assumption, since they must open it, review it, enter into the system, then have it double-checked - OCR can save them 204 days a year! For a team of 10, that’s a total of 20 days saved each year per employee.
Integrated systems enable direct communication and data transfer between systems, reducing the need for data reentry and duplicated tasks.
Some integrations also offer built-in approval workflows that can be configured by the end user. This increases the auditability of approval processes and can also trigger notifications for approvers when needed, reducing back-and-forth communication. For example, itamlink offers a variety of integrations with industry-leading systems such as Yardi, MRI and Nexus Systems, which can help simplify the property tax payment process and automate data flow.
Clearly, reducing manual processes and human intervention can help improve data accuracy. In turn, a more robust, reliable dataset is one of the most pivotal factors of good property tax management. When data quality and accuracy is prioritized, property tax teams realize a number of benefits.
Missing a tax payment deadline or mailing a payment to the incorrect address because of an incorrectly keyed date or address can lead to expensive penalties or fees. With effective software tools, such as itamlink’s built-in calendar and notifications for managing appeal and payment events, you can avoid high-cost penalties altogether.
Effective tools for managing appeal dates and deadlines keep you on track through your appeal processes from filing to close. It also reduces the likelihood that you miss a deadline, ensuring you don’t forfeit your right to overturn the assessed value of your property and pay more than you may have to.
Accurate data that is shared and easily accessible between your accounting and property tax teams can make the forecasting and budgeting process significantly smoother. For example, using integrated systems (over manual back-and-forth) can help teams work faster and reduces the likelihood of an error slipping into a forecast. Especially as this is a process that involves a high number of stakeholders, prevention is key for saving time, resources, and predicting future property tax liabilities.
Clearly, the cost of manual processes on property tax teams is high. But high-quality, accurate data is an attainable goal. Through the use of dedicated software solutions, you can reduce the time spent on tedious, manual tasks and improve your data integrity.
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