Whether you’re considering transitioning to new property tax management software or you’re a first-time user, the road to implementing a new property tax tool can be a long one. No matter what software you end up transitioning to, though, one thing is certain: You’ll only get the full benefit of the software if the data you put into it is clean and accurate.
Unfortunately, a great deal of tax data is out of date or just plain incorrect. Property tax is built on data, so data errors set the stage for a minefield of mistakes (not to mention inefficiencies) with potentially significant consequences (Tweet this!), including penalties, misapplied funds, and missed opportunities to reduce your tax liability. Organizing your property tax data is the best way to hit the ground running with new software—and fortunately, it’s a lot easier than you may think.
We’ve advised countless clients on how to clean property tax data in preparation for a transition to TotalPropertyTax (TPT), but our recommended process, outlined in the four steps below, can be used no matter what system you’re transitioning to.
Property Tax Management: 4 Steps To More Accurate Data
1. Make a list of your tax-related responsibilities.
Before you can begin cleaning and organizing your property tax data, make a list of all your tax-related responsibilities. Don’t worry about updating incorrect or out-of-date information yet—you’re just laying a foundation.
Focus on three segments: returns, assessments, and bills.
- For your personal property returns, how many are you filing each year? What are the account numbers and who are the assessors for each?
- For your personal property and real estate assessments, how many notices do you receive, and what are the associated account numbers and assessors for each? What are the values associated with your assets?
- For your bills, how many do you pay, and what are the associated account numbers and payees for each?
Although bills may be your top—or only—priority, we advise against only including bills in your list. By cleaning all your tax data, you will not only get the most value from your property tax management software, but you’ll also have the data you need to protest assessments. (Property tax software isn’t just about paying bills—it should also help your company save money!)
Before you switch to new software, download this free guide to find out what five things you need to put in place to make the switch a success.
2. Remove inactive or outdated accounts from your list.
Now that you have a complete list of your returns, assessments, and bills, comb through that data and make sure the information is up to date. Since you’re trying to clean up your property tax data, leaving inactive accounts in the mix will only cause confusion.
3. Check your data against real tax documents.
Next, go back to your actual tax documents to verify the corresponding property tax data for each account. In legacy systems, account numbers and names can end up mistyped, misspelled, or missing entirely. (Account numbers are critical to property tax practice. We’ve seen some companies send returns with inaccurate account numbers, leading to double-assessments and penalties for non-existent accounts.)
Fortunately, you don’t always need to check every single number on every single document, because assessors from the same jurisdiction typically use a unified format for account numbers. First, review a sample of notices from various assessors in each state to make sure the account numbers are correct. If there are no errors, then look at the rest of your notices from that state, and see if they fit the formatting pattern of your sample set. For example, if the accounts from a handful of real estate notices from California are numbered “12345,” the rest of your California real estate accounts should also be formatted that way. If they are, it’s more likely the assessment numbers are error-free. Conversely, if you spot a California real estate account numbered “12-17b-3467-p,” you’ll know right away that this account needs to be reviewed.
You can rinse and repeat this process with your bills. Look at a sampling of bills to confirm they are correct and identify the formatting pattern. Then, look at other bills from that jurisdiction and correct the outliers.
4. Identify what each asset means to you.
If you won’t be filing personal property returns, you’ve finished your cleaning and organizing. However, if you have personal property returns to file, you should take one more pass over your cleaned tax data before it’s ready for your new property tax management system.
Your account numbers mean one thing to your assessors and collectors, but don’t provide all that much insight to your team on their own. Fill in this information gap by noting which assets are filed under which account numbers (i.e. which of your properties is associated with each account number). With this final piece of info, your team can ensure they’re always referring to the right property.
Automate Your Data Cleansing For Better Results
Cleaning your property tax data is crucial to making the most out of any property tax management software, but it can be a labor-intensive process. Tax teams that take advantage of CrowdReason advanced property tax tools can save time cleaning up data—and perform the job more accurately—than those that do it manually.
Instead of trying to clean up your old account numbers yourself, you can simply run your previous year’s tax documents through MetaTasker PT. MetaTaskerPT is a data extraction tool that helps verify and log accurate records fast. It is a web-based solution that handles the “microwork” of data entry, both extracting all available strategic content from your property tax documents (structured and unstructured) and verifying it for accuracy. So you not only get clean (greater than 99% accurate), structured data from the start, but you save time doing it—letting your team work on higher-value tasks. Your clean data can then be uploaded into TotalPropertyTax (TPT), our property tax management tool that provides advanced support for every phase of the tax cycle.
Sign up for a demo today and see how you can make your property tax management software transition a smooth one.