When it comes to collecting rents, a significant quantity of property management companies still collect paper checks. According to a survey by the Association of Financial Professionals, the most common form of payment is still the old-fashioned paper check. The survey showed that paper checks are used, on average, 50% of the time to make payments. In property management for commercial buildings this number is probably significantly higher.
There are difficulties with paper checks, though.
First, payment by check is slow. All the checks must be gathered together and taken to the bank for deposit. After that there is a waiting period of several days to see if the checks cleared. In addition, there is the possibility of loss or fraud. Even the best bank can lose a check and even the most careful property manager can be given a fraudulent check every now and then.
So what is the better solution?
Property management companies should consider processing payments online. Here’s why:
More Timely Payments
When collecting rent, a challenge that you are likely to encounter is getting tenants to make payments to you in a timely manner. Although there is a variety of reasons why they do not make payments on time, one of the reasons could be that making payments has obstacles to it. Clients are less likely to pay on time if they encounter difficulties when trying to pay. One of the obstacles is mailing a check or having to go to the property management office during work hours to make a payment.
According to a recent study on online payments conducted by the Federal Reserve in 2016 titled “Consumers and Mobile Financial Services 2016”, an increasing number of consumers are using online payment processing services and mobile payments to pay their bills. Giving tenants the choice to pay online can be a real help for the tenant. In today’s flexible internet environment, tenants are adapting very quickly to making payments online. Because other businesses are offering online payment options, they can begin paying online with a property manager that offers the same thing. Paying online is convenient, saves the tenant a lot of time and is available 24 hours a day.
Revenue 24 Hours a Day
The ability to provide a variety of payment methods is quickly becoming vital to rent collections. Providing multiple payment options, including all major credit cards, debit cards, bank transfers (which are called Account Clearing House (ACH) payments) and online automatic payments that are available anytime are very helpful to the tenants. Because their daily costs can change, tenants appreciate the flexibility in payment methods. The advantage for the property manager is that online payment processing means 24-hour-a-day 7-days-a week revenue flow that is credited to the proper account automatically. In addition, the added security and Payment Card Industry (PCI) compliance adds another level of confidence to the entire transaction. Through providing a variety of payment methods, both the tenant and the property manager benefit.
A benefit of installing an online payment processing system is the fact that payments can be made without an agent being involved. A significant challenge in property management is being able to accomplish more with less staff; the less time spent with each tenant taking payments or trying to contact them for late payments, the more time is available to focus on other important business tasks. By empowering the tenants to easily make payments online and even set up automatic recurring payments, the number of staff required to focus on taking payments can be leveled off or reduced.
But what if some of your tenants want to talk with an agent, or at least not deal with a faceless web portal to make their payments? Then offer them an Interactive Voice Response (IVR) system. IVR payment solutions on the front end of your phone system can be used to take payments over the phone without an agent being involved by directing the caller to an automated phone payment system. Barring that, if the caller wants to talk with a real person, the IVR can direct them to the exact person they need to speak with in order to expedite the call and have the rent/dues paid quickly and easily.
In short, moving tenants toward making rent payments online is beneficial for both the tenants and the property management company. It saves time and delivers convenience and security for everyone involved.
BillingTree provides payment processing software that offers a wide variety of payment methods from web portals to mobile payments to IVR systems. To find out more, contact BillingTree or call us at 877-424-5587.