Dallas–While shedding the use of paper has been a big challenge for the multifamily industry, when undertaken, this one initiative can serve two goals for apartment management and owning companies. It can reduce clutter and simplify record keeping, thereby increasing efficiencies in various areas of a company, and it can help companies achieve their green goals. So naturally, there was a lot to talk about at a session titled “Achieving a Paperless Office: What Does It Mean? Where Is It Going?” held at the 2010 NMHC Apartment Operations and Technology Conference in Dallas today.
It is evident that top multifamily companies are trying to reduce or eliminate the use of paper in several departments, but haven’t yet achieved what many think is impossible—a paperless office. It is possible, however, as executives on the panel demonstrated. They all started with the acknowledgement that “paper is a beast, a monster,” as Dan Amedro, chief information officer of Archstone and moderator on the panel said.
Online leasing is one of the biggest areas where firms are making big strides in getting rid of paper. It is also an area where high volumes of paper are used.
Camden Property Trust started doing online leasing about four years ago. Kip Zacharias, vice president of business services at Camden, said, “Either residents sign all documents electronically or we email them. They sign and send them back and then we scan them so we have all the leases online. About 45 percent of them are signed electronically. We are now in the process of piloting renewals. When you look at how the physical documents are saved—in boxes and garages and God knows where else, electronic makes more sense. We also see the service aspect as residents can sign whenever they have time. It works out for our staff as well, because they don’t have to wait for residents to read and sign documents. Instead, they can focus on calling up leads.”
Camden has also been using e-checks. “Fifty-five percent of the checks we receive are scanned from manual checks and 45 percent are electronic. The rest are manual, which cannot be scanned due to problems such as ink on the document being unclear,” says Zacharias.
Camden holds the checks for 60 days before shredding them. “There typically isn’t a problem, especially once it has been scanned and associated with a particular resident.”
Steve Small, chief information officer of AMLI Residential Properties, L.P., another panelist, talked about how the company has managed to get about 70 percent of the documents associated with leasing online. “We’ve been doing online leasing for six years,” said Small.
Equity Residential has recently become aggressive about e-signature, and now 80 percent of their leases are done electronically. As of 2010, the company does not have any paper copies of leases. “It is a big win for us and we are deploying it to all other functions in the company,” Michael Manelis, senior vice president of Property Operations at Equity Residential, said.
Equity started online check signing two years ago and is now very much committed to eliminating paper altogether. “Sixty-five percent of our residents pay rent online. The rest of them send checks and we scan them. So 100 percent of the payment records are available electronically,” said Manelis. “Our internal auditing team is agnostic to this, even though they like the efficiencies and now they don’t have to travel as much as they used to. However, we believe this is a good investment because it increases our sales group’s bottom line.”
One of the concerns about electronic signatures among multifamily executives is whether they pose as an issue in case of evictions or other legal matters involving residents. “We have got the green light from lawyers to go ahead with this,” Zacharias said. “Electronic signatures are legally admissible.”
Procurement is another area where companies are making significant investment in order to go electronic. Small said, “We have gained a lot of efficiency in this area and have reduced the number of people in accounting by 50 percent over time. We have nearly a 100 percent of our invoices available virtually. For a while, we had them centralized and we would scan them, but at this point we have eliminated that. Our return on investment is upward of a million dollars and we achieved that in nine months.”
AMLI rates every single transaction that goes through the procurement system. Over time, based on reviews, the procurement guys can decide what vendors to keep and what not to.
“If we receive an invoice on Wednesday, we make the payment on Thursday. So another benefit to moving procurement online is that vendors get hooked on fast payment and therefore they are reluctant to make frequent price changes, as that would mean there is a delay in payment processing,” said Small.
While Camden Property Trust hasn’t reduced headcount, they now run about 25 percent of their payments on a virtual system.
Equity Residential too has pursued e-procurement quite aggressively. “We have added 110 vendors to our online invoice system. They go into the portal and submit invoices electronically. We have identified 1,000 vendors who will transfer to the invoice-online-only model. 85 percent of our operating expenses will be online, ordered or invoiced online. We will figure out if we should centralize or outsource or transfer to online the remaining 15 percent. Utilities are the next frontier for us,” said Manelis.
In addition, all three companies also use various virtual programs for human resources-related tasks—everything from new hire pay stubs to employee reviews.