Tax seasons wreak havoc in the workplace. You have employees scrambling through their desk drawers and shoe boxes for paper bills, and frenzied finance professionals drowning in mounds of bills and receipts for days together. Claiming and processing tax benefits can sure be taxing and time-consuming, and the pre-tax season is the perfect time for retrospection. 41% employees need to submit 1 form on each claim, and 71% of companies end up losing at least 8 days in processing claims. These telling stats explain why so many companies are wary of deviating from traditional compensation structures that don't require additional bookkeeping on their part. Then again there's the constant wrestling with the conundrum - do you risk losing a good employee who won't take anything less than a flexible tax-saving compensation package or precious man-hours spent on processing reimbursement claims? Thankfully, these aren't ultimatums. There's an easy way out.
Digitisation of employee benefits has given rise to somewhat of a tax-saving time-saving utopia. Businesses are waking up to the world of automation and the ease with which it handles and simplifies menial everyday tasks. Digitisation has made claiming tax benefits as simple as the swipe of a card or the click of a button - you choose - it's the age of convenience after all. More and more businesses are opting for paperless tax reimbursement options, whether it is through electronic cash cards or apps. The ease that these automated tools offer is not just at the user end, but also the business end of the problem. While users, or employers in this situation, don't need to worry about storing paper bills, filling out claims forms, and tracking claims during approval, accounting teams have little to complain when a smart tax benefit reimbursement system stores, organises and validates claims, keeping it audit-ready. Digitisation means increased operational efficiency and productivity.
Let's talk about adoption barriers that businesses anticipate while migrating to a digitised tax reimbursement system. The good news is that a smart cloud reimbursement solution does not require a major upheaval or complex change management strategy to onboard users, as other digitisation moves would ask. The greater challenge is convincing a management that's accustomed to legacy systems to move to forward-looking tax administration. Organisational inertia can play spoilsport in embracing digitisation; you're not just introducing technology but changing the clockworks in the organisation after all. It helps to get everyone on-board to understand the greater vision, and see how the benefits far outweigh the challenges change presents. Once this barrier is crossed, it's simply a matter of customising the solution so it adapts to your organisational salary structure, limits and policies. With simple capture and upload actions at hand, digitised tax reimbursement platforms can even be adopted by Gen-Xers and the Baby Boomer generation with ease.
Is there a right time to digitise?
Can you remember the last time you received a memo? Before you start wondering if that's an inconsequential question, get this - a meagre 6 per cent of organisations today have gone completely digital with their tax reimbursement process. Still doesn't add up? Another reason you're going to love an automated tax benefit system that does all the math. Paper-based tax administration is positively going down the memo route - disappearing into the same void where all obsolete systems go. Last year, we saw the RBI mandate for meal vouchers to be digitised. It's safe to assume that it won't be long before the trend trickles down to other tax benefits as well. And with good reason too. 2 in 3 employees find their benefits processes to be too complex. Digital natives, in particular, have come to expect arduous tasks like claiming tax benefits to be simplified and reduced to just a few clicks. As per a study, 90% of employees prefer digital reimbursements over traditional paper-based reimbursements. Clearly, the question here isn't how you'll be automating your tax benefit system, rather how soon you'll get to it. With the pre-tax season just around the corner, now's a good time to ponder on whether you want to start off your next financial year with a smart tax system.
The author Mr. Ramki Gaddipati is the co-founder and CTO of Zeta