How Local Governments Can Benefit from Automating Business Licensing

Every year, more and more services become available online through the use of digital tools and technology that offer citizens the convenience of completing tasks virtually with minimal disruption to their daily lives. But even in an age where a staggering 85% of American adults are online on a daily basis—with more than 30% online ‘almost constantly’—there are still several key services, such as business licensing, that are bogged down by time- and labor-intensive practices of the past.

Despite clear upward momentum in digital government transformation, many agencies still follow a manual, paper-based process when it comes to issuing and renewing business licenses. As agencies wrestle with outdated systems that often require approvals via interoffice mail, printed notifications and payment by check, the process has never felt more cumbersome, especially in light of the advanced digital solutions available today.

Just as everyday citizens value having quick and easy access to online services, businesses, too, want to be able to interact with their local government in a way that reflects their increasingly virtual world. Improved accessibility via the latest technology has the power to transform the entire licensing experience from start to finish for business owners and government staff. So why has this essential service not been modernized in more communities?

Before we explore how digitizing the business licensing process benefits local governments, let’s first take a look at the outdated manual processes in place and why these often hinder agencies that are working hard to provide the best experience possible to constituents.

The Limitations of Manual Business Licensing Processes

Even in larger municipalities, it is not uncommon to find governments employing the same manual, paper-based licensing processes that have been in place for years. These processes often require citizens to:

• • Download a PDF application form
  • Print and fill out the application by hand
  • Utilize snail mail or email a scanned copy to their local government agency

Once received, the agency is then tasked with:

• • Manually entering all the data into their system
  • Calculating any fees
  • Notifying the applicant manually throughout the process
  • Printing and delivering the actual license to the applicant

Not only is this process burdensome to staff who often balance multiple projects in addition to license applications, but any snags in the process, such as missing documentation or incomplete paper applications, can bring the entire process to a halt.

With the sheer number of applicants, entering and keeping information up to date for hundreds or thousands of active licenses can quickly overtax staff—particularly during the season of license renewals. A single department might oversee the process for dozens of licenses including:

• • Special Event Business License
  • Food Truck License
  • Liquor License
  • Canine & Feline Breeders License
  • Marijuana Business License
  • Short-Term Rental Business License
  • Home Occupation Business License

Manual licensing services also have the potential to strain an agency’s relationship with business owners who simply want to be in compliance with as little hassle and delay as possible.

Benefits of Digitizing the Business Licensing Process

So, what can government agencies do to combat these and other business licensing challenges?

Just as digitizing other government services can lead to an improved experience for constituents, having an online, centralized system where business owners can apply for and renew their business license(s), as well as pay any applicable taxes, can improve the entire licensing process for all involved.

With an online business licensing solution, agencies can provide a single, seamless platform where business owners go to complete all necessary tasks in the registration process and where staff can build customized workflows that follow all required approval stages, automating tasks from the point of submission right through to the renewal process.

Here’s a look at some of the other ways digitizing business licensing benefits agencies:

Increased Engagement with Business Owners

Since an online system captures data at the point of submission, staff have instant access to the latest information, allowing them to easily engage with business owners at any time. This is extremely beneficial when it comes to issuing standard automated reminders as well as in the event an agency needs to relay an urgent message to the business community.

Those with digital solutions in place during the height of the COVID-19 pandemic had a clear advantage when the need arose to issue notifications regarding the latest mandates, closure requirements and programs designed to support the community’s businesses.

Streamlined Tax Collection

For agencies that require businesses to remit taxes, an online solution means payments no longer have to be submitted via check mailed or dropped off in person at the office. That money is not sitting on a desk until the next trip to the bank either. Instead, fees are automatically calculated within the system and any payments collected are deposited directly into the jurisdiction’s bank account. Furthermore, having tax and licensing in the same digital solution creates even more efficiencies for the business.

Simplified Renewal Process

While not all jurisdictions require businesses to renew their license, many have an annual renewal requirement, most commonly at the start of the calendar year. For agencies that rely on a paper renewal form, there is an ongoing need to have someone available to mail out paper renewal reminders and then key in all of the renewal data, but the process can be drawn out if staff is already occupied with other tasks.

With digital tools, this essential part of the process can be automated, and annual notifications are sent with the click of a button. The community can rest assured they have the latest contact (and other important) information about businesses since all data is updated on their reporting as businesses renew.

Local Governments Embracing Digitization

The process of applying for a business license can be tedious and time-consuming, but some agencies are already utilizing digital tools to streamline this service. O’Fallon, IL, for example, has digitized forms to bring their most popular license applications online for the convenience of citizens and staff. Meanwhile, Salida, CO recently launched a business licensing platform that allows short-term rental operators to register online.

For the Little Rock, AR Convention & Visitors Bureau, an online system gives new and existing local businesses an easy way to apply for licenses, renew, and pay taxes. “Our local business owners simply use our online portal to register and apply for a wide range of permits that we have available,” explained Kasey L. Summerville, Senior Director of Tax Revenue at Little Rock Convention & Visitors Bureau. “We then use GovOS Business Licensing to automatically calculate estimated and final tax assessments based on data in our jurisdiction and create custom workflows to send vendors notifications of payment, and even allow them to pay those final assessments online.”

Providing business owners with the tools to quickly complete processes 24/7 on their schedule and with little disruption to their busy lives can mean more time for them to focus on running their business. For government staff, streamlining inefficient processes like this can free up more time for other tasks that actually require a human touch.

GovOS works with hundreds of local governments to bring services online. Visit GovOS products to learn more.