For most property management firms, processing Accounts Payable (AP) requires the largest amount of overhead and offers the smallest return or NOI gain. Yet many property managers are reluctant to outsource the process.
Outsourcing is a mildly spooky term, there is no disputing that. And you’ve probably always raised an eyebrow when a business or an individual states they can accomplish whatever you’re doing in-house better or more efficiently than you.
But in reality, the value of outsourcing often outweighs any potential fears. Outsourcing brings a firm both time and resources – the two biggest assets any property management company can have, whether you’re a publicly traded REIT or own a two story duplex.
Outsourcing isn’t about lowering head count or replacing the ‘core competencies’ of a business. It’s about becoming more efficient at what your firm does best; whether that is leasing, HOA management, or the day-to- day operations of their communities. And a multifamily firm with a few thousand (or tens of thousands for that matter) units should not look at the way they pay their bills as a ‘core competency.’
The largest source of monthly recurring bills to cross the desk of your AP department is utilities. As it pertains to multifamily, each property has a utility provider for water/sewer, another for electric/gas and then a trash hauler. Oh, and don’t forget a cable and telecom provider. So on the conservative side, if the average 350 unit garden-style community has 20 total buildings, that translates to 20 water and 20 sewer accounts.
But that’s not all. You then must account for all of the associated vacant bills with the gas/electric provider if they individually associate accounts to the tenants directly. If this is not the case, add in another 40 total master accounts for gas/electric, plus however many trash compactors are on site (one account per compactor).
So again, on average that would be almost 100+ utility bills a month, all coming in at different times of the month, with different due dates, and various cycle ranges. What logic is there to pay these bills on site, or even worse, having them redirected to your corporate office to bog down your upper level management?
PayLease offers a plethora of utility management services including their award-winning Utilities Expense Management comprehensive expense management solution. Utilities Expense Management allows property owners and managers alike the ability to have all utility bills processed from one consolidated payables source. Not to mention through Utilities Expense Management vacant unit recovery charges can be assessed when a resident fails to transfer individually metered utilities into their name upon move in. Oh, and did I mention they offer a direct link to the EPA’s Energy Star benchmarking program?
Feel any better about the word ‘outsourcing’ yet? Think of giving the responsibility of your company’s utility AP as putting a turbo charger on the engine that drives your business. And why wouldn’t you want to go faster? See you at the finish line.