Automation offers the potential for property management and real estate firms to unlock a seamless approach to handling account payments and finances, writes Quadient’s Joey Glazer
This year has brought significant challenges to the property management sector.
With increasing regulatory concerns, and rising inflation and interest rates, the industry is under growing pressure to maintain positive relationships with tenants whilst encouraging business growth.
A recent survey reflects this: 74% of property managers felt their job damaged their mental health. Despite these challenges, the industry has also seen a rise in possibilities for growth, with a large percentage of residential property management groups seeing opportunities for expansion and improvement in 2023.
In fact, the sector is expected to grow by nearly 10% in the coming years.
Real estate organisations are facing similar challenges as they tackle declining gross domestic product, rising interest rates and supply chain disruption. However, many companies are looking beyond these challenges and focusing on transformative action that can help them thrive in the current climate.
Accounts Payable (AP) teams look after incoming bills and invoices within organisations. If managed properly, AP can help property management and real estate companies to improve cash-flow, streamline processes, and save employees’ valuable time. However, to achieve these benefits, AP teams must first eliminate timely AP processes such as manual data input and invoice management.
Driving cash flow with accounts payable – finding the balance
There is a delicate balance that property firms and their finance teams must find when making payments and optimising cash-flow.
Property managers and real estate professionals must manage their payments in a way which enables them to meet their obligations and deadlines, without hurting cash-flow or incurring penalties.
For example, property managers must deal with mortgage repayments, home reparation and utilities costs, as well as track incoming finance like rent payments.
The same goes for real estate managers, especially as income can be very unpredictable with high vacancies and tenants facing a very disruptive economic situation.
AP automation software can help property and real estate managers find the balance between incoming and outgoing cash.
Driving cash flow with accounts payable – the benefits
By automating the AP process, property firms can benefit from centralising payables information and providing end-to-end oversight of the payment process.
The transparency this offers allows for a more strategic analysis of how and when to make payments. This is particularly important as property and real estate managers deal with numerous external vendors, contractors, and suppliers, assisting them in deciding when to best make their payments and avoid jeopardising their cashflow.
AP automation can also help property managers keep track of these vendor agreements that may provide discounts for early payment, making it advantageous to pay an invoice sooner in certain circumstances.
AP automation also allows for customisable workflows, helping organisations to track the customer journey and payment process through a single view dashboard. These workflows help to ensure that the approvals and payment process progresses smoothly.
By doing so, any unnecessary delays that lead to late payments are eliminated, given the end-to-end visibility of the entire customer journey.
The digital nature of these customisable workflows means that property and real estate managers can complete approvals from anywhere with the knowledge that they have a single source of truth on every customer. Ultimately, this saves time to put more energy into building relationships with key vendors.
The forecasting process can also benefit from AP automation, as it allows property managers to retain end-to-end visibility of the invoice lifecycle. This ensures a seamless solution to help organisations look ahead at their finances and highlight growth opportunities.
Without AP automation, AP teams cannot manually monitor the flow of an invoice from the time it is received until it is paid. Invoice management involves verifying invoice legitimacy, approvals, and maintaining up-to-date records of payments.
Performing these tasks manually is impossible to do efficiently. This results in property managers and real estate professionals failing to identify potential bottlenecks that may prevent timely payments.
A source of revenue
For property management and real estate companies, AP automation provides better cash flow and forecasting, assisting in their ability to expand and grow within the sector.
In fact, automation can also impact cash flow by becoming a minor source of revenue. Through the potential of discounts for early payments, and negotiating leverage with vendors, automating the AP process opens doors to put money back into company’s bank accounts.
Through adopting an automation solution, property and real estate professionals can tackle existing challenges such as late payments and timely manual processes, and embrace automation to help them flourish in today’s rapidly evolving financial landscape.
Joey Glazer is director of accounts payable automation at Quadient
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