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October 21, 2021

4 Examples of Automation in Real Estate Tax Management

Our Senior Director of Technology shares the most valuable property tax processes to automate to keep projects on track and improve productivity

Automation can help make complex business processes easier to manage, saving organizations time and money and reducing errors. Today, there are many examples of automation, from writing legal documents to onboarding new employees.

But when it comes to property tax, what applications of automation are there? We discussed this topic with Kevin Grad, Senior Director of Technology at Rethink Solutions. In this post, Kevin shares his views on automation, including examples of what property tax processes could benefit most from the technology.  

Four Examples of Processes to Automate in Property Tax

While there’s a clear benefit to implementing automation in the workplace, opportunities are often overlooked. In part, that’s because companies are busy.

Auditing existing processes, even ones that are time-intensive, may get pushed off because they’re not an urgent priority. Another barrier to automation is a lack of technical knowledge. Many of us working in property tax simply don’t know what processes and functions can be automated. Therefore, we can't see areas in our current processes that could be improved with automation.  

According to Kevin, some of the most valuable property tax applications of automation include:  

  • Complex workflows, such as payment approval processes that require human intervention at multiple points.  
  • Automatic property tax reforecasting based on changes to assumptions, such as when actual data becomes available after forecasts have been built.
  • Notifications, which can help property tax teams stay on track and avoid missing important dates and deadlines.
  • Webhooks, which can automatically update other systems you use based on changes made within your primary system of record.

We’ll break down each of these below.  

1. Property Tax Payment Workflows

Traditional approaches to paying property tax bills may look a little something like this:

  1. Tax bills are entered into spreadsheets or a property tax management system for review.
  2. The required approver/team members are notified, either by email or in person.
  3. The tax bills then go through approval layers.
  4. Once they’re approved, team members must either re-work their spreadsheets or run exports from their software.
  5. The data is forwarded to the AP department, who may have the ability to upload this data. If they don’t, they must re-key all the data into their payment/AP software.

Payment workflows are an example of automation that can help eliminate many of the duplicated tasks within payment workflows. What’s more, approval processes can be made more secure and efficient using electronic verification, and data can be transmitted electronically (removing the need for manual data re-entry). Finally, each step of the process can be documented electronically and is auditable, saving your business time retracing steps and correcting errors.  

Using automation, a property tax payment workflow may work something like this:

  1. Tax bills are received and uploaded, ideally with a property tax data abstraction tool like itamlink Capture.
  2. Tax bills are entered into an automated approval workflow designed by an administrator.
  3. Team members receive in-app or email notifications when they need to review/approve a tax bill.
  4. Once finalized, the tax bills are automatically transmitted to the AP system for payment, all of which is tracked by an electronic audit trail.

Clearly, automating property tax payment processes reduces the need for back-and-forth, ensures the same data set is transferred between all stakeholders, and saves companies a whole bunch of time.  

2. Automatic reforecasting based on updated property tax values

During forecasting and budgeting season, most companies will use base assumption values within their projection calculations, since they don’t have all necessary data available to them. As data becomes available, your base assumptions must be modified to create accurate projections for the upcoming year.  

For instance, you may receive the actual value for a jurisdiction’s property tax rate after beginning your projections. If it turns out your actual value differs from your projected value, you'll need to adjust the values in your projections accordingly. But updating this rate across multiple projections and formulas is tedious and prone to error.  

This is another example of automation that can streamline this process, allowing you to update the forecast with your actual value in bulk. Systems like itamlink can take this new value and update your calculations, such as the current year accrual and future year forecasts, automatically and across multiple projections. This process preserves the accuracy of your projected property tax forecasts and saves you from having to re-enter new data to each of your calculations individually.  

3. Notifications

Notifications are a seemingly simple example of automation that can help companies significantly reduce their property tax liability.  

They can be a game-changer when it comes to ensuring projects remain on track and tasks get completed on schedule.  Leveraging notifications within your daily property tax workflow can help you avoid penalties due to late or missed payments. They can also remind you of upcoming appeal events, such as hearing dates and filing deadlines.  Though they can be displayed in a variety of formats and systems, email notifications are some of the most widely used.

4. Webhooks

Webhooks are a tool that can send data from one system to another in an automated fashion. They help reduce time-consuming tasks such as manual data entry or having to double-check data for input errors. Because webhooks allow you to update information in various systems based on updates made within a central location, they help keep systems up to date without the need to rekey data.  

One useful application of webhooks for property tax teams is during the creation of a property or parcel. Typically, creating internal records for new properties requires many distinct steps. For example, every time a new property is created in your central system of record, a team member may send an email or physical letter to the property owner requesting necessary details for tax purposes. This can be a time-intensive process, as you need to wait for the letter to arrive, be completed, and sent back for the process to move forward.

Using a webhook, the creation of a property or parcel in a central repository like itamlink can trigger an email or letter to be sent to the owner or occupier automatically. Once the letter has been filled out, the data can be sent back to the original system, updating the records automatically.

While webhooks are a useful example of automation for property tax teams, it is important to keep in mind that technical expertise is required to set up and maintain them. As such, this can be a barrier to the implementation or adoption of automation technology.

We talked about some of the major process to automate in property tax in this post. But there are many other examples of automation, including:

  • Integrating with other systems you use in your company, such as your ERP or AP systems to streamline data transfer.
  • Data capture to help you digitize property tax bills/assessment notices.

As your company scales, automation is a tool that can help you efficiently manage internal business processes and ensure effective communication amongst specialized employees. Ideally, automation helps specialized employees focus their time on higher-impact tasks and promotes preventative measures to protect your company from potential costs and risk.  

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© 2023 Rethink Solutions. All Rights Reserved