Outsourcing, which became part of the business lexicon in the 1980s, is simply subcontracting a process to a third party.  The decision to outsource property taxes is usually made in the interest of reducing cost and utilizing time and energy more effectively.  It allows a company to focus on its core competencies.  Unfortunately, a couple misconceptions with regard to outsourcing property taxes have surfaced… 1) Outsourcing means losing jobs, specifically in the United States… 2) Outsourcing means a loss of control, and the resulting benefits not actually coming to fruition.

Outsourcing property taxes does not necessarily mean a loss of American jobs.  There are firms whose core competency is property taxes with compliance practices in the United States.  Companies who look at outsourcing property taxes to the United States will continue to find ways to process property tax returns in a cost effective fashion without transferring jobs overseas.  If that is an important consideration to you, make sure you ask who will be processing the returns and where.

Property taxes management can be confusing, complex and voluminous, but it does not require a loss of control.  With technological resources available and by not totally washing their hands of the responsibility, companies can successfully transition the work but not the control.  The relationship between the company outsourcing and the outsource provider should be like “the office next door”.  If you had the staff internally instead of outsourcing, what would that look like?  Take that same model and talk to your outsource provider about replicating it.

If you would like to learn more about the pros and cons of outsourcing to help you better evaluate your situation, email me at dlevan@advantax.com.