Whether you’re new to property taxes in general or have acquired property in an unfamiliar location, or you have a few too many returns to file for the number of hands available, you’re here because one thing is clear: You need help with your company’s property taxes. The question is, what kind of help do you need—property tax consulting or a software management tool?
For most tax departments asking this question, the answer is most likely software—but that doesn’t mean there aren’t cases where property tax consulting is necessary. In this article we’ll explain the rationale behind our thinking; then it’s up to you to choose the right path to solve your tax department’s current challenges.
Property Tax Consulting Vs. Software: What problem do you need to solve?
The first thing to consider is the challenge you’re facing. Ask yourself these questions:
Do you need help with compliance tasks, like filing returns, collecting data, making payments, etc.?
Do you need specialized or high-level advice regarding valuations, negotiations, or something similar?
Depending on your answer, keep reading to get our take on the best course of action.
If you need help with compliance...
If you’re looking for compliance help, software is the right choice (in most cases—we’ll get to that in a minute!).
It’s likely that the reason you’re struggling with compliance tasks is because you’re using outdated tools and processes to handle them, like legacy property tax software or Excel spreadsheets. The additional assets and properties your company is likely to accumulate over the years will only exacerbate the problem, overwhelming your people and your systems to the point where outside help will be a necessity simply to remain compliant.
Is the software you’re currently using helping you as much as it should? If you recognize any of these 12 signs in your department, it might be time to switch.
Our advice is to change your inefficient processes now to prevent that from happening.
Modern property tax management software (like TotalPropertyTax and MetaTasker) can handle many compliance activities faster and easier than people can. Leveraging software for the tasks below makes them easier and faster to complete so your team can work more efficiently:
- Asset management—It quickly calculates the taxability and reportability of assets based on jurisdiction rules.
- Data entry—It replaces manual data entry with automated data extraction.
- Filing returns—It can generate thousands of property tax returns in minutes.
- Compiling appeal packages—It can generate appeal letters and appeal packages, including the appeal letter and custom attachments.
- Processing tax bills—It can automatically fulfill check requests and handle bill paying.
Tasks like the above require a simple transformation of data and, in our view, should be done using software; otherwise, your tax department simply isn’t being efficient.
The Advantages Of Software Over Property Tax Consultants For Compliance
Although organizations sometimes hire property tax consultants to handle compliance activities, we generally don’t recommend it. Process modernization is a major benefit of software that you won’t get by outsourcing; when you consider that in addition to the points below, the reasoning behind our recommendation becomes pretty clear:
- Software costs less than a property tax consultant for compliance. The ongoing cost of property tax management software for compliance purposes is less than what many property tax consultant firms charge.
- Both software and consultants require comparable amounts of effort to implement. Handing off your company’s compliance tasks requires bringing consultants up to speed on your company and your data, transferring the data to them, explaining your processes, and reviewing their work when it’s complete; a very similar set of tasks is required for software implementation. (Note that while not all tax teams review compliance work, they should. Consultants do not have the detailed and historic knowledge that can lead to misrepresentations or mistakes of your positions or assets, which could result in a higher tax payment than is warranted.)
- Using software gives you the opportunity to continually analyze your data and reevaluate your tax strategy. Having control of your data—and more time to strategize thanks to software automation—means you have more opportunities to optimize your tax positions. You can also utilize the historical knowledge and subject-area expertise of your in-house personnel to your advantage—something a consultant won’t be able to do.
Even with technology, however, there may occasionally be times where you just can’t handle the compliance workload. In those instances, a property tax consultant can help keep you afloat temporarily. A consultant can also buy you time to implement an internal technology change if you’ve decided to go that route.
If you need property tax expertise...
If your company needs high-level expertise, a property tax consulting firm is the appropriate choice. Sometimes you need an expert to determine whether or not your property has been fairly assessed and, if not, someone to help you navigate the process of challenging the unfair assessment. Software cannot take the place of property tax consulting firms in this regard.
If you do hire a consultant for advisory work, it’s perfectly acceptable to let the same consultant handle the related compliance tasks as well. Your compliance documentation needs to match up with your valuation position, so in that case, it makes sense to have the same knowledgeable party handle both tax strategy and compliance.
Interested in finding out how property tax software can help your organization?
Whether you’re currently using a property tax consultant for compliance or thinking about it, consider transitioning to software—a move that will benefit your tax team both now and in the future.
Our property tax software products, TotalPropertyTax (TPT) and MetaTaskerPT, are used by numerous organizations to cut the time they spend on compliance tasks dramatically. (You can read about one of those companies here.) As a result, they have more time to spend strategizing around ways to lower their tax bills. To see how our software works and how you could benefit from it, schedule a demo with us today.