Spend now to be ready for tax season

By Citizens Staff

Digital transformation spending is expected to exceed $6.8 trillion by 2023, according to IDC research. If your business plans to lean on technology to strengthen its competitiveness, you may want to make those purchases by year's end. Spending now, before the end of 2021, may result in more tax deductions when it's time to file.

Always check with your tax or financial advisor before making spending or tax decisions, but investigate what's possible soon, before tax savings opportunities pass you by.

Now, more than ever, it's important for businesses to embrace change and invest in their organization,” says Dan Watling, Business Banking Relationship Manager at Citizens. “Operating with a digital approach can help with everything from customer service to employee retention.

If you plan on digitizing to compete in 2022, review the following list of potential areas of investment so that you can act before the end of the year.

Human resources. Payroll and benefits management can take an inordinate amount of time and put a drag on company productivity. Research from Paychex® finds that HR tasks eat up an entire month each year of staff time when handled manually.

Digital HR tools for payroll and benefits administration can help your business operate more efficiently and improve employee retention. “When you onboard a new hire and empower them with tools to manage their benefits and personnel information, both from the office or when they’re working remotely, you’ll instantly gain their buy-in and loyalty,” Watling explains. “This is key in today’s competitive job market.

With tight competition for talent, 39% of employers surveyed by Willis Towers Watson plan to improve the employee experience in 2022. Thirty-six percent of companies are making changes to health and well-being benefits, and 33% are increasing workplace flexibility.

Digitizing your HR processes can benefit your business by:

• Automating your payroll processes, enabling you to pay employees accurately and on time, while ensuring that taxes and other deductions are made correctly.
• Providing employees with easy, self-service access to their tax forms, benefits information, vacation and sick time requests, and more, empowering them to make updates when and where necessary.

Customer service. According to a study from Pega, nearly one-third of customers express frustration that the businesses they deal with don’t understand their needs. Poor customer service can damage a business’s reputation and result in customers defecting to the competition.

Digitizing your customer service channels can help your business respond to issues and questions quickly, in the channels they prefer. Depending on your product or service, this could include:

• Offering chatbots or live chat on your website to answer simple questions.
• Monitoring social media to respond to posts on your social channels.
• Automating email customer service to provide automated responses for common questions or problems. 

No matter what channel you use, remember to set expectations by letting customers know how long it typically takes for a response. This could be done with an automatic email reply letting them know their request has been received, or an FAQ section on your website explaining the process.

Financial management. Online and mobile banking services save time, money, and trips to the bank. With a comprehensive suite of financial account management tools, you can track payments and monitor your cash flow with a single remote view of all your accounts.

Using online and mobile banking can improve business efficiency by:

• Scheduling automatic payments and transfers, and setting reminders for recurring charges.
• Automating collections with a centralized, branded invoicing system.
• Improving security by specifying levels of access for users, and setting alerts for suspicious account activity.

Payment solutions. Many customers prefer digital payment options for online and in-location purchases. These tools simplify the shopping experience and make it easier for buyers to review their bills and pay them on time.

Visa® reports that post-pandemic, nearly 75% of consumers will continue to prefer contactless payments, and 82% of small and midsized businesses have updated their businesses to accept digital payments.

Transitioning to more electronic payment solutions became paramount during COVID, and it will continue to be important going forward,” says Watling. “Businesses should offer these options to all customers to remain competitive.

Offer payment alternatives to your customers, such as:

• Accepting tap-to-pay, contactless payment cards and mobile wallet tools, such as Apple Pay®, Venmo®, and Google Pay™, and stored cards for frequent customers who allow you to keep their card on file.
• Implementing buy-now-pay-later (BNPL) solutions to help customers break up larger, one-time expenses into smaller, more manageable monthly charges, without incurring interest payments.

Social media. Sprout Social reports that 55% of consumers learn about new products and services via social media. Given the wide reach of these platforms — Facebook, for example, is used by 3 billion people and 200 million businesses worldwide — social media is much too important to ignore.

Social media management tools, such as Hootsuite® or Sprout Social can help your business improve your social media strategy by:

• Scheduling posts in advance, so you don’t have to worry about posting new content every day, freeing up your social team to engage with follower comments or questions in real time.
• Giving you a dashboard to view which types of posts get the most engagement, and when are the best times of the day or week to post.
• Monitoring what keywords your audience responds to, to help improve the quality of the content you share.

There’s still time this year to invest in the transformative steps you need to take to compete and succeed in today’s rapidly evolving environment. “Review your expenses, and look at what purchases will strengthen your balance sheet and competitiveness,” says Watling. “There’s still time to do this before the end of the year by leveraging relationships with your trusted advisors and connecting with them now for advice and guidance. Citizens is here to help.