Advancements in real estate-related technology continue to hit the market for multifamily owners and operators. Some of these new property management and accounting ‘bells and whistles’ come in the form of packaging that simply makes things look and feel better; others serve to enhance functionality and increase efficiency.
Within this rapidly changing landscape, which new capabilities can be incorporated into a multifamily enterprise technology system to truly add value and provide a quick return on investment? Four areas are well worth noting and considering.
Utility billing: Sub-metering apartments or implementing ratio utility billings (RUBS), as allowed by local regulations, enables multifamily property owners to eliminate water and electric costs by making residents responsible for their actual use of these utilities. Utility billing software, which enables seamless integration with utility billing companies that manage this type of resident invoicing, is growing in popularity.
On a monthly basis, the system automatically provides the selected billing company with a list of residents and their sub-metered or RUBS activity; the billing company produces and sends out the invoices. While the billing company may charge $3 or so per month to generate each invoice, that fee can be added right to the residents’ bills.
Resident portals: Many multifamily owners/operators today are choosing to deploy portals that provide residents with the ability to log in to see news about their apartment complex, enter work orders, and, most importantly, pay their bills online via an ACH withdrawal or credit card. When that online portal interfaces with a company’s property management accounting system it can result in significant cost savings.
A work order submitted online can be routed directly into the property management system and assigned to maintenance. When a bill is paid online, accounts receivable automatically updates as well. This immediately eliminates the need – and costs involved – for someone to enter work orders and payments manually. On the payment side, electronic transactions hit faster than paper checks. While there is a transaction fee associated with ACH withdrawals, it is minimal. Credit card payments can be billed back to the resident as a service charge.
Check conversion: The implementation of check conversion software improves cash management and streamlines the workflow for payments dramatically; time of entry can go down 50 percent or more for a 250- to 300-unit property. A scanner on the payment processor’s desk associates a check’s coded line to a particular resident, and the amount of check is converted to an electronic ACH transaction. The first time around, the resident information must be entered manually, but thereafter the software automatically recognizes the bank routing and account numbers.
As mentioned previously, electronic payments hit faster than paper transactions. Property owners/operators also are notified faster in the case of insufficient funds. Electronic transactions also take precedent over paper at banks. And, with paper checks, banks only allow one repeat check submission; electronic payments with insufficient funds can be resubmitted twice.
AP scanning and workflow: Traditionally, vendors mail invoices for individual apartment complexes directly to the properties. The property manager reviews them, enters them into the system, signs off and then bundles them to be sent to a regional manager. The regional manager checks the forwarded invoices and then overnights them to the home office. From there, they are processed into the AP system and, ultimately, paid. AP workflow changes the process significantly.
All vendors mail invoices to a centralized P.O. Box. One point of contact scans them into the software, which enters much of the critical data right into the system. The invoices then are sorted into electronic approval routes. If the property manager needs to approve an invoice, it is sent to that property manger electronically, and then to the regional manager and to the AP system. Once payment is made, the information flows back into the system – including check number, amount, and processing and payment dates. This eliminates time and money spent on data entry and shipping in the traditional distribution model, not to mention issues with lost invoices.
In all four cases – utility billing, resident portals, check conversion, and AP scanning and workflow – the capabilities require integration between a company’s enterprise property management and accounting system, and third-party software products. Where to turn? Real estate technology companies that have multiple partners in these areas and that can work with other vendors upon request are best positioned to help.
Investment in each of these four areas makes sense. While implementing new software does cost money, these particular enhancements provide rapid ROI. Most importantly, they allow multifamily owners/operators to boost the bottom line by streamlining operations and reallocating resources to focus on finding and retaining residents.