After the holiday season, many people go back to work refreshed and ready to take on a new year. However, for banks and their vendors, January is one of the busiest times of the year.

Tax season kicks off every January. Customers must receive tax documents for reporting income, loan interest payments and other financial data required by the IRS. The process of collecting the proper data, building the documents and sending them to customers can often be stressful, unorganized and prone to mistakes. Banks have the charge of getting their customers the right information, at the right time, designed in a familiar way. This process is crucial to reinforcing the trust institutions actively work to build each day with their customers.

Many banks accept this stressful process as “just the way it is.” However, there are things leaders can do now, before the federal government even releases the annual tax data fields, to prepare for the January rush.

Create a Game Plan
Banks know that the biggest frustration with tax documents is that the IRS typically does not release the current year’s data fields and form requirements until late fall. While the forms do not typically change dramatically year-to-year, there are always some changes that must be mapped from the core into any document generation processes. Banks must then match that form with their individual system.

To begin taking a more proactive approach to tax season, the first step is to treat tax preparations like any other project. Identify what your team can control and what it cannot. What worked well last year, what didn’t? It is important to think critically – remember, the goal of this exercise is to streamline the process.

Work through the process and timeline step by step with your team, including all key employees who work closely on this project. Discuss pain points, things you can control and possible action items that can be taken ahead of time.

Once you have successfully identified all dependencies, fill in your project timeline. It is important to start sooner rather than later. Luckily there are two vital steps you can take right now.

Contact Your Core
Get in contact with your core provider as early as possible to discuss any changes. Discuss timelines and deadlines that can be shared internally and added to your project timeline. If your bank can receive test data from the core to proactively work through the process, that can prove incredibly valuable.

One of the larger obstacles of the tax process is the data matching and correct application of the data on the form. Janine Specht, senior vice president of business applications and innovation officer at Kearny Bancorp in Kearny, New Jersey, makes a point of coordinating with her core as early as possible to avoid these pain points.

“We have experienced missing data and wrong boxes which leads to the files being received by our core processor getting input incorrectly,” says Specht. “Then we realized we weren’t ready to print and send.”

Specht recommends creating a calendar with alerts for when to expect certain steps, so nothing is overlooked.

Contact Your Document Vendor
Once the core data is set and properly mapped, your team should prepare document vendors for a smooth workflow. If possible, coordinate any changes with vendors ahead of time. Securing the test data from your core will help with this; however, there are still steps you can take to prepare with your vendor if you cannot get any test data.

Communicate the deadlines and timelines you received from your core to the vendor, and be sure to get any deadlines or important steps from them to add to the internal project timeline.

Discuss any design issues that need to be solved outside of data fields. It is important to send customers a form that looks like the tax form they will be filling out, since the familiarity makes it easier to figure out what they need to do with the documents and reduce calls to customer service.

Tax season is stressful, but there are steps bankers can take ahead of time to ease some of those pain points. The more bank leaders can work through and plan for, the more prepared their employees will be. As banks are working through the process and create the project timeline, remember to think critically and outside of the box. This proactive mindset will make the New Year start more efficiently and reduce the stress associated with tax season.

WRITTEN BY

Gerald Pettway