How Efficient is Your Accounts Receivables Team? August 19, 2015
Property management is a multi‐faceted proposition. At the core, it’s really all about keeping the tenant happy and making the operation as smooth and efficient as possible. Being responsive to requests, proactive about maintenance and upgrades, and watchful of vacancy rates are important aspects of the job.
Still, when push comes to shove the most critical issue is accurately handling money. The monthly rent is often the largest payment our tenants are making, and it’s critical to them that the process is convenient, secure, and accurately posted every time.
So managing accounts receivable is really a customer service issue. Your office may have a unique method for handling the process. There may be a reliable bookkeeper on staff that knows the property and keeps track of a lot of the details. This can work very well for a time until it doesn’t. What happens when this human capital is no longer there? People retire or change companies, and then the knowledge they carry is lost. That’s one problem with having people manage receivables.
Another problem can arise with growth. We all hope our operations continue to expand, but there is a critical mass that is reached at which existing methods no longer keep up with increasing numbers of units and tenants. Changes have to be considered before that point is reached. Otherwise you’ll be making changes while apologizing to tenants for delays and errors.
If your office has established a clearly outlined process for handling receivables, you’re a bit better off. At least the process will stay in place even as employees come and go. But the issue of growth remains, and can cause inefficiencies to spring up in even the best process, when it’s people‐driven. The question arises about your process: How scalable is it? Can it be successfully applied to much larger numbers of accounts?
Another thing to consider when evaluating this critical function is what it costs to handle it. This can be difficult, since the cost includes salaries or wages as well as costs for billing and reconciliation. It’s hard to determine how efficiently the work is being done without looking at what it’s costing.