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Seven Reasons Why Rent Checks Cost More than You Think

Posted on 11. Feb, 2010 by Jim Semick in Business

Sure, the first week of each month is a little crazy at your property management office, but isn’t it crazy for everyone?

Well, not exactly. More property management firms are discovering that they can save a significant amount of time and reduce headaches during rent week by moving their resident rent payments online using ACH (automated clearinghouse) and other electronic methods.

At first glance, accepting paper checks seem simple enough: A resident mails or drops off their rent check and it’s sent on to your central office for processing. But each check you receive adds about a dozen steps and possibly several dollars of labor to your operation. Moving resident payments online makes a lot of sense and can go a long way to boosting the bottom line.

Here are seven benefits your operation would receive by accepting online payments for rent and other charges:

1. Reduce handling time. In many back offices, processing checks is a multi-step process of opening envelopes, verifying resident and property codes, checking eviction status, sorting, and batching the checks in preparation for accounts receivable entry. During rent week this can add up to hours for a single batch of checks. Online payment systems eliminate most or all of these steps.
2. Less data entry and fewer errors. Each check must be scanned or entered by hand into your AR system, taking hours each month. Once entered, most offices still validate and reconcile the total by running a tape. Online payments, if integrated with your accounting system, can eliminate much of this step and provide greater accuracy.
3. Fewer trips to the bank. Online payments are automatically deposited at the bank. Even if your bank picks up checks for deposit, you save time and improve security with electronic payments. Not to mention, it’s the greener way to go.
4. Improve Cash Flow. Online payments bypass many of the traditional steps of handling paper checks so your operation can improve cash flow. A rent payment made using an ACH system will typically be deposited in 48-72 hours. In addition to faster funds availability, property managers can see reduced delinquencies.
5. Faster NSF notification. Today, if you deposit a physical check at your bank, you may not receive notice of non sufficient funds for days. With ACH, you typically receive notice in 48 hours, allowing you to resolve the issue with your resident faster (and promptly charge appropriate NSF or late fees).
6. Increase resident satisfaction. Offering residents alternative payment methods puts your management services in better light. Residents like the ability to pay rent and other charges 24 x 7, or better yet, set up recurring, automatic payments.
7. Preserve your sanity. How much is it worth to you or to your staff to reduce the craziness of rent week?

These are a few of the benefits that quickly offset the cost of an online payment system, especially those that can fully integrate ACH services with your property management accounting solution. Smart property managers have learned that by accepting transactions online, they can reduce or eliminate many tasks that add up to big savings each month.

Related Posts
Your Paperless Office: Five Great Reasons to Move Payments Online
Ditch That Rent Check: A World of Online Payment Options
Rent Week Pain Relief: What’s the Best Online Payment Solution?
How to Get Your Residents To Pay Rent Online
Contest Winner: How Much Does It Cost To Process A Rent Check

Tags: electronic payments, Technology