How to Select the Best Utility Billing Provider for Your Business
Utilities are one of the largest multifamily operating expenses. Recouping these costs from residents is the best way to protect and increase your Net Operating Income (NOI). Plus, outsourcing utility recoupment frees up your staff to focus on running and growing the business.
Whether you currently rely on a utility billing company or are interested in implementing a program, it’s important to recognize there’s more than meets the eye when it comes to utility billing partners. Before committing to a solution, it’s imperative to recognize the traps that can befall property managers who undertake a utility billing program.
In this Property Talk video, you’ll learn about the two main billing models offered by third-party utility billers and the pros and cons associated with each. Watch now and discover which model is best for your business.
Contact PayLease today to learn how our Resident Billing Solution can help boost your NOI.
Whether you’re interested in using a RUBS calculation or submetering program to recoup utility costs, it’s important to understand the different billing models providers use. Too many billing programs seem clear-cut on the surface but hide fees and complexities that end up costing multifamily operators thousands of dollars each year.
There are two types of billing models you could work with if you’re thinking about implementing a billing program:
Utility Bill-and-Collect Model
This traditional billing model seems great in theory, but has many potential variables and pitfalls.
How the Utility Bill-and-Collect Model Works:
The Pitfalls of a Utility Bill-and-Collect Model:
Invoices are sent to residents months in arrears, causing confusion and frustration
Significant reimbursement delays negatively impact cash flow. The vendor collects resident payments, removes their service fees and all resident late fees and then reimburses you with the remaining balance.
Utility Bill-and-collect vendors profit when residents don’t pay. All late fees go directly to the vendor, drastically reducing their incentive to collect.
Resident Billing Model
What most property managers are moving towards is a Full-Servce Partner.
How the Resident Billing Model Works:
The Benefits of a Resident Billing Model:
Your residents receive one comprehensive, itemized bill that includes rent, utilities and all other property-related charges
Cash-flow improves when residents make one payment (usually online) for all charges. Your dollars flow straight to you, no intermediaries
If a resident fails to pay, you have several recourse options available, including eviction
Free eBook! Multifamily Utility Bill-and-Collect Schemes Exposed
Dodge the traps associated with Resident Utility Billing programs. In this in-depth eBook, we outline commonly-used utility billing strategies and identify the key differences of each one. Readers will understand the pitfalls that can come with certain utility billing programs, how they negatively impact your business, and the solutions that are better-suited to maintaining a strong NOI.