In uncertain economic times, finance leaders are looking for ways to protect themselves and their organizations from the risks associated with changing overall market conditions. This means implementing plans and processes that can reduce exposure to risk and unnecessary expenses. In real estate focused organizations, the most strategic-thinking CFOs know that one of the biggest and most overlooked opportunities for internal optimization is property tax.
Property taxes are one of the largest business expenses for organizations that own, occupy or manage multi-property portfolios. Unfortunately, this cost is often improperly managed and many organizations miss out on the opportunity to greatly control and decrease this expenditure. Some finance and tax leaders simply pay these bills without realizing that they can take action to potentially reduce this expense. Furthermore, many still manage this process using Excel or completely outsource it. This leaves them with no oversight into the risk of potential penalties, missed appeal deadlines and little control over their property tax strategy.
Land and real estate value fluctuation is compounded during uncertain economic conditions, such as recessions, because of the gap that is created between market values and assessed values. This is why it is important to ensure you have a system in place to accurately budget for changes in values or property tax payments, and uncover opportunities for tax savings. By implementing a long-term strategic property tax management plan, CFOs and other financial leaders can proactively reduce operating costs and maximize business value. On the other hand, organizations that don’t develop property tax management plans can end up with unexpectedly large tax bills that impact budgets and impede cash flow.
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