AvidXchange is an IREM Director Level Industry Partner. This article is published on the IREM Blog as part of that partnership.
The property management industry is struggling to find solutions to everyday property problems. Juggling transactions, financial statements, accounts receivables—and more—isn’t easy. But the accounts payable (AP) cycle is the process that causes the most pain, especially for AP managers. Countless responsibilities make it nearly impossible to optimize the payable process, resulting in the waste of valuable time and money. Top performers in the property management market are becoming the best in the business with one simple, streamlined solution. AP automation is no longer a “nice to have,” but a necessity that’s critical to your company’s goals and growth. Here’s why:
Manually Managing Maintenance Payment Processes is Tough
Regardless of the number of properties you manage, maintenance costs add up. Naturally, maintenance invoices equal payments that your property management organization is responsible for paying on time.
In a recent Buildium study, one in three respondents reported maintenance and efficiency are their biggest challenges in the property management industry. Even though property management software helps manage expenses, it doesn’t simplify the accounts payable or payment process. Your organization may still be stuck in the Stone Ages of paying for maintenance with paper checks and manually keeping track of payments with various electronic and manual processes. Let’s not forget the worries that come with payments getting lost in the mail, or bills for repairmen and supplies sitting under stacks of paper.
AP managers are tasked with juggling multiple steps to ensure suppliers and repairmen are paid on time. But, unfortunately, handling payments with mixed processes and solutions has been proven to lead to overlooked bills and late payments that ultimately upset tenants.
Top performing organizations are relying on AP and payment automation to streamline the payment process and minimize problems. With automated AP and payment processes, invoice details are entered into one portal for easy electronic reviewing and approval rerouting. The even better news is that with AP automation solutions like AvidXchange, once invoices are approved, the system works closely with vendors to pay them the way they prefer. AP automation allows the best property management AP managers and specialists to save time and money without worrying about bills getting lost or irritating maintenance suppliers with late payments.
Paper-Based Payment Processes Aren’t Easy
The biggest priority of real estate professionals isn’t handling payments, it’s handling clients and tenants. However, a great deal of a real estate professional’s work day is spent juggling all types of payments, including mortgages, insurance, cleaning and more. Chances are, each type of invoice and payment must be handled with care, compliance and internal processes. Processing each invoice and payment manually wastes valuable time that your organization cannot reclaim.
Automating processes improves efficiency without adding a steep learning curve. Your team has time to focus on bettering growth and services such as delivering prompt responses to current or potential tenants, participating in negotiations, and managing receivables that keep your organization thriving. AP and payment automation have also been proven to reduce costs, headcount and hours, to aid in meeting the need of scaling for growth.
One of the biggest fears the real estate industry faces is sending out unauthorized payments, which profoundly impacts the bottom line. Thankfully, there’s a simple solution. During AP automation setup, you can create rules to instruct the software when to send payments and when a manager’s review and approval are required. Rules can be established to alert your team when details don’t match, a bill exceeds a certain threshold, and even when vendors require a special review. Trusting AP automation to streamline these steps and alert you when necessary allows you to spend more time focusing on exceeding expectations for your properties and customers.
Scaling for Growth is Impossible without Automated Solutions
Let’s face it, it’s impossible to scale for growth with manual AP and payment processes. Efficiency has been proven to lead to savings for any business. Multiplying soft and hard payment processing costs by each payment can add up costs quickly. If your organization plans to handle more with less, implementing automated solutions is critical. AP automation doesn’t multiply costs or increase hours when a new invoice is received. You’ll have the ability to virtually handle an unlimited amount of invoices and payments with batch payment processing and paperless invoice routing.
When businesses consider growth, they often consider profits. Two ways to improve earnings in property management are to increase profit margins or add more clients and properties. With manual processes, you’ll have to choose which way is best for your business, but with AP automation, your business can have both. AP and payment automation solutions allow you to control payment processing costs better and give your team time to focus on property management needs at the same time.
In addition to reduced costs, your organization can focus on perfecting other processes like maintenance requests and property marketing. As your sizeable business continues to grow, your AP solution will pay for itself within months and without any additional costs. You’ll be able to scale up regardless of the number of properties in your portfolio.
Whether your property management company handles single family rentals or industrial properties, manual AP processes can be a pain. In its eBook, Top 3 Reasons AP Automation is Critical for Property Management Companies, AvidXchange shows you how AP automation saves money with streamlined payable processes, how it fits perfectly into property management businesses, and how it can turn your company’s cost center into a controlled, efficient machine.
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