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Chapter 2

Advantages and Challenges of Using Business Licensing Software

Software can significantly ease the burden of business licensing for local governments and business owners. But what are the advantages and challenges of moving to a digital solution?
Chapter 1

Business Licensing
Overview

Chapter 2

Advantages & Challenges of Using Business Licensing Software

Chapter 3

Setting Up an Online Business Licensing System

Chapter 4

Combining Business Licensing & Tax Filing in One System

Chapter 5
Supporting Your Local Business Community

An increasing number of local governments are doing away with outdated systems and processes by moving their operations into cloud-based software. Tasks like business licensing can be time-consuming and resource-intensive for local governments, particularly for jurisdictions relying on old-school methods for managing them.

From liquor licenses and special events to newer licensing categories like short-term rentals and marijuana sales, there are numerous types of business licenses–each with unique requirements and many moving parts. Utilizing software that streamlines business licensing can significantly ease the burden on staff and provide a better experience for business owners.

But what are the advantages and challenges of using software for business licensing? Here’s a breakdown of the benefits and considerations for local governments looking to transition to a software-based solution.

Advantages of Business Licensing Software

Improves compliance rates

As emerging industries like the short-term rental (STR) market and the marijuana business become increasingly popular, the proliferation can make it difficult for local governments to keep up. Business licensing software can make tracking and compliance for rapidly changing sectors like these industries significantly easier, ensuring that these businesses have the proper permits, are up to date with all requirements, and are operated safely.

Increases efficiency

Given the volume of applicants, various types of licenses, the broad range of requirements depending on the business, and the continuous cycle of applications and renewals, business licensing can be a labor-intensive and burdensome process for local governments.

Confirming the order from customer

Outdated systems—such as manual data entry, reliance on snail mail, or payments by check—can slow the process down even more. Software addresses these inefficiencies by moving the various components of business licensing over to digital and automating many of them. Moving to an online platform can also help minimize human errors that happen along the chain, such as automatically flagging missing items or incomplete forms to business owners before allowing them to submit their application.

Business owners can be notified of renewal requirements automatically, making the process easier for all parties. Going paperless reduces paper waste, which is not only beneficial from an organizational standpoint but can also double as a way to show your community the steps you are taking to be more eco-conscious. Ultimately, automated software helps boost productivity and gives employees more time for tasks that require a human touch.

Better data and better departmental collaboration

From finance to planning, business licensing often involves multiple departments in the process. Moving business licensing operations to digital and doing away with traditional paper and email methods makes departmental collaboration faster and more organized. And, because all parts of the licensing workflow are happening within a digital system, local governments get better data across all departments at every stage of the process. This gives stakeholders a better grasp of the big picture and more granular elements like pending tasks.

Get tax money faster

Local governments are potentially missing out on significant tax revenue from tourism industries like STRs, and business licensing software helps eliminate the cumbersome elements of collecting payments for these and other businesses. It also helps municipalities get money faster by simplifying the process for owners to pay, eliminates delays caused by snail mail, and makes payment processing and deposits happen automatically in real time.

Business Licensing Software Can Present Challenges

Data security

As enterprises increasingly move sensitive information and critical business operations into the cloud, data security has become more important than ever. Researching the level of protection a software solution offers is arguably the most important step in selecting the right vendor. Cloud-based applications that are properly fortified are the difference maker in preventing intrusions that could result in lost or compromised data, or an interruption of service that can quickly become costly. A system that features advanced security and data redundancy, like GovOS’ SOC 2-certified platform, is key to protecting data and operations.

Initial startup/transition costs

Implementing a new system, from the initial setup to the transition, comes with a price—both in dollars and logistics. Running a cost/benefit analysis is key whenever you’re looking to significantly overhaul various aspects of workflow. Most local governments can greatly benefit from moving complex tasks like business licensing over to a digital platform, but considering the specifics of your jurisdiction will ultimately determine if it’s the right move for you. Analyze the average volume of business licenses that are being processed, how much time employee time is being spent on business licensing issues, and other relevant data before moving forward.

Learning curve/training

Whenever you’re introducing new processes and technology into the workplace, it’s important to consider the learning curve involved, as well as assess the amount of time that will be required for training. When it comes to digitizing formerly analog processes, these temporary pain points are more often than not worth it from a long-term perspective. Consider what your software vendor offers in terms of guidance and training for your team. How available can they be at various steps of the training process? How involved or steep is the software learning curve? Asking these types of questions will give you a much clearer picture of the software and vendor that’s most suitable for your local government.

Finding the Right Platform for Automating Business Licensing

Digitizing government services like business licensing boosts efficiency and provides a better experience for the end user. But choosing the right platform for your needs can be tricky. GovOS has a proven track record of serving local governments of all sizes with a customizable software solution that is seamless, simple, and secure. Learn how GovOS can help your municipality streamline and automate the business licensing process, from applications to renewals to tax collection and compliance tracking.

on-Demand Webinar

How Local Governments Can Simplify the Business Licensing Process