Payment distribution errors can occur for a number of reasons, like if a vacated tenant has scheduled outstanding recurring payments, if funds are still being received from buildings that have since switched management companies, or if someone on the board decides to switch banks. Known errors are usually easier to identify and resolve, but unknown errors require intense investigation to be resolved and can lead to significant costs. If a modern system isn’t in place to moderate and resolve these issues, they can compound over time, costing the property management company significantly in operating costs. Property management companies can work to end tenant payment distribution errors with an electronic payments solution.
Open the Possibility of Streamlined Management
If a property management company’s current system for accepting payments isn’t providing them with the solutions they need to deal with payment distribution errors, it might be time to implement a new system. This is especially true if a company is still receiving all, or most of, their tenant’s payments by check. Checks usually take more time to process than any other payment method and can lead to procedural errors. An electronic system can reduce the number of checks a company receives from tenants. Those checks they do receive can be processed accurately with the new system.
88% of organizations say that their main reason for converting to electronic payments is to increase efficiency. An electronic payments solution provides clear payment processing and reporting that is straightforward and intuitive. It also reduces the cost of processing payments and cuts down on the manual labor of tasks associated with collecting and managing those payments. In the end, an electronic payments solution can help a property management company turn a profit by reducing the net decrease in revenue that an outdated system creates.
Separate and Deposit Funds into the Correct Clearing Accounts
When managing an extensive portfolio of properties, property managers often struggle to deposit money into the correct bank accounts. In some cases, a single building will have multiple accounts associated with it. Each account may be designated for specific types of tenant payments, like those made for rent, security deposits, or parking fees. Without a modern electronic payments solution in place, the company faces the task of manually splitting every payment and settling them into their corresponding bank accounts. Once the money is deposited, the company then has to wait to see which payments have failed before they can attempt to resolve them.
An electronic payments provider can offer property management companies an innovative billing platform that enables them to report on different payment types and deposit payments into the correct clearing accounts automatically. Using the information captured by an online billing system, property managers will be able to do the following:
- Separate rent payments and security deposits so they can clear directly into their respective escrow accounts
- Separate other fees that the company may charge tenants electronically, like those for parking, cleaning, and assessments
- Manage every property and separate payments for individual buildings
Efficiently Manage Your Property Information
Another challenge facing property management companies is the successful management of property and building information. When a condominium board or building manager decides to change property management companies, the company has to be able to export information about all the buildings under their management in bulk and validate that all payment relationships with the associated tenants have been severed.
If a relationship with a number of buildings is terminated, the company needs to be confident that any recurring payments from the residents of those buildings have been canceled. In the event that the company acquires new buildings, they also need an efficient way to import all of the new building information, input it into the system, and establish relationships with new tenants.
Depending on how such information is stored, whether it’s an antiquated filing system or a patchwork conglomeration of computer files, these types of processes can take months. A modern electronic payments platform allows a company to manage property information through a single, secure interface and can speed up the process of importing and exporting that information.
Information about every involved party, whether they are a tenant or a building manager, can be accessed and exported efficiently. New information can also be imported and stored where it is easy to locate, should more changes occur.
These types of innovative solutions are designed to reduce or remove the risk of payment errors due to changes in a company’s landscape. Property management is a dynamic industry, so it needs a dynamic solution to accommodate its complexities.
Satisfy Your Tenants and Reduce Their Payment Errors
Another factor that can lead to costly processing and disbursement errors is the behavior of tenants. Old tenants will move out, new tenants will move in, and information has to be added or removed from the system. Tenants whose accounts have become delinquent and are in the process of being expelled have to be prevented from delaying the eviction process by making small, illusory payments.
For all these cases, property managers have to be confident that their online billing system is only accepting payments from current tenants who are in good standing. Managers need a system that maintains all of their buildings effectively and provides the flexibility to support daily updates about their current properties, including which tenants are living there and which payments need to be accepted or rejected.
For tenants in good standing, a modern electronic payment solution can help them pay what they owe on time and reduce the risk of having a delinquent account or, worse, being expelled. They can schedule recurring payments to make payments consistently month after month. If a property management company chooses to, they can even offer to accept payments by credit card in the event that a tenant is short on cash.
When a tenant doesn’t pay on time, a modern solution will send them clear information about late fees and other repercussions. The property management company can even implement electronic payment reminders to reduce the risk of tenants forgetting to pay. If they are concerned that their tenants will be slow to adopt a new payment solution, managers can introduce it as an alternative to paying by check and offer incentives for using it. Sometimes the simplest incentives, like the convenience of the new system and the appeal of going paperless, are effective enough.
Partner with a Payments Solution Provider
Thanks to new, patented technologies developed by providers, property management companies now have the chance to end payment processing and disbursement errors with an electronic payments solution. Addressing the complexities of the property management industry is already a challenge, so it shouldn’t be addressed with an antiquated system. The best electronic payment solutions can be implemented quickly by a provider without disrupting regular collection activities.
After the new system is implemented, property management companies can expect a noticeable reduction in payment processing errors. They’ll be able to separate funds into multiple accounts more efficiently, manage their property information more effectively, and provide quality service to tenants through true bill presentment and online payments.