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In today's data-driven landscape, the way we process information can spell the difference between mediocrity and resounding success. This is especially true in fields requiring pinpoint accuracy, where even a percentage deviation can exact a significant financial impact. Property tax management is an example of just such a field, as the industry has traditionally relied on manual processes when gathering the information required to make an appeal to what might be deemed an inaccurate assessment.
It should probably come as no surprise that this can lead to errors. A recent article titled ‘data entry across multiple systems’ from December of 2023 demonstrates that manual data entry is fraught with risks and errors, with typical error rates ranging from 1% to 5% depending on the complexity of the data and proficiency of those carrying out the work. Though it may seem like a small percentage, numbers like this can lead to significant discrepancies when assembling the extensive and detailed data required for property tax appeals.
In an article titled ‘How Manual Data Entry and Human Error Are Costing You Money’, author Frank Tilleli states the impact of errors like this are not only numerical; they cost money, which directly impacts financial reporting, regulatory compliance, and strategic decision-making. In the context of property tax appeals, where final decisions will be rendered based on the precision of data presented, even a minor error rate can lead to substantial financial losses, and inaccurate tax liabilities. Circumstances like this underscore the urgency for technological solutions that can automate and refine the data management process, which can go a long way in enhancing accuracy and reducing human error.
The purpose of this paper is to explore the significance of precision in commercial property tax appeals and the role technology can play in achieving precision and maximizing its financial impact.
The scenario is a familiar one. A property owner receives an assessment notice from a local taxing authority presenting a number representing their assessment of what the subject property may be worth. This becomes the basis upon which a taxable liability is derived. The methodology used to arrive at that figure can sometimes be general and is often opaque. Upon receiving this notice, the building owner must first consider how close the assessed value is to their own perception of value. If there seems to be a deviation, the next step is considering making an appeal.
This is something that must be weighed carefully as the stakes can be high and the margin for error is minimal. As such, if a property owner decides to proceed with an appeal, precision is critical not only because of the financial implications, but in many cases for legal and operational integrity.
The need for precision in commercial property tax appeals simply cannot be overstated. Every submission requires meticulous checking for accuracy because the consequences of even seemingly inconsequential errors can produce a cascading effect. As such, investing in solutions that place a premium on data management and centralization is not only advisable, but it is essential for any organization with significant property holdings.
Quantifying data complexity in a disorganized environment is like battling a multi-headed beast. Without advanced technology, data often comes from fragmented sources like spreadsheets and manual records, making accuracy difficult to verify. The core issue is the lack of centralization. Aggregating information into one location is challenging, especially when multiple stakeholders across various jurisdictions have differing data collection methods. Without uniformity, this process becomes problematic.
This is only the beginning, as we need to address volume and scalability issues when managing commercial property tax appeals. There are several implications to handling large amounts of data and the required processes needed to effectively manage this. Consider some of the issues detailed below:
To address such volume and scalability issues, companies should seek out specialized property tax software solutions like itamlink. itamlink can offer the following:
Human error is effectively neutralized, and becomes a non-issue if organizations opt to adopt robust technological solutions like itamlink. We have touched on issues associated with manual input including the inability to efficiently manage data ingestion, cumbersome processing, and limitations of robust data analysis. Adopting solutions like itamlink neutralize these issues in their tracks as they become automated, which effectively streamlines the entire process.
This can yield other valuable benefits as well, not the least of which is enhancing reporting capabilities. The nature of reporting itself can be spontaneous. A senior executive about to go into a meeting needs to know a year-over-year comparison of property tax liabilities in a given region. If a company finds itself still using manual processes, it may have to draw on several sources to get a reasonable estimate of what this figure might be. However, with itamlink, they can effortless access this information in real time, and obtain year-over-year reports for taxes, and measure variances. It’s a powerful upgrade from the standards that existed before.
Integrations into other systems play a significant role with itamlink as well, as it can integrate data from multiple sources and ensure compliance with constantly changing tax laws and regulations. Itamlink was designed to process property taxes and action the data so it can be used in various locations, meaning it can be pushed to other applications, providing there is an API connected to other applications.
A prominent retailer with a national footprint spanning hundreds of taxing jurisdictions had a significant portfolio of assets that were both owned and leased. The traditional approach they employed to manage their portfolio was to decentralize the property tax management function, which offloaded these responsibilities to multiple departments, third party service providers, and software solutions. In the absence of an integrated platform to efficiently manage assessments and appeals with one source of data, they faced the ongoing challenge of managing the risk exposures associated with non-centralized management and data.
The complexity associated with multiple networks of stakeholders and processes across multiple jurisdictions often led to chaos, which overburdened staff and hindered the effective execution of other duties (a problem that became particularly pronounced during peak periods).
Though itamlink was being used by some of the stakeholders, its full potential was not being fully realized. To achieve this, it was important that the property tax management function was centralized to a single source of truth which sought to end manual input inefficiencies once and for all.
After itamlink was adopted throughout the organization, a go-live date was established, and within 10 months, a plan was set in motion for system-wide implementation. The initial focus was on assessment and appeals work, but the main emphasis was converting more than 50,000 scattered files – mostly historical records into electronic data. This was a process that needed to be done manually. In the end, this monumental task was completed within 9 months.
The new streamlined approach to property tax management significantly reduced operating costs, as previously disparate systems and processes were now efficiently centralized. As a result of this change, itamlink fundamentally changed the way they managed this important corporate function. In effect they transitioned from a reactive property tax management approach to one that was far more proactive, and hence strategic. They evolved from a dispersed tax operations management model, heavily reliant on manual input, to a centralized data-centric model.
Property tax appeals represent a critical component within the property tax lifecycle. It is the point where property tax professionals need to decide what property tax assessments need to be appealed (and ideally, create an ordered sequence of relevancy), they need to quickly and efficiently assemble data from multiple sources across vast portfolios to make their appeals submissions.
In this regard, the process requires pinpoint precision, and as the scale of some portfolios become so large, doing this manually with scattered systems and processes becomes untenable. This is the point where technological solutions need to be implemented to effectively create order out of chaos.
itamlink stands alone as the premier industry solution to infuse that necessary order and precision to the appeals process. It centralizes data, has embedded tools to give clarity on many property tax-related dimensions to the portfolio, and streamlines reporting. Effectively, it replaces all the disparate systems and processes used to manage this complex and critical corporate function. It’s a game changer and will fundamentally transform and streamline your approach to property tax management.
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