PropertyManager.com » Technology

Using Excel Instead of Property Management Software Is Risky Business

Mary Girsch-Bock — Mon, 30 Aug 2010 19:11:47 +0000

It’s no secret that there are a lot of Excel users in the property management community. An outstanding spreadsheet program, Excel frequently plugs in the gaps commonly found in accounting programs. But there‘s a group of property managers that may find themselves relying on Excel a little too much.

In recent years, Excel aficionados, fed up with the intricacies of accounting software products, have begun using Excel as their primary accounting software. And while there will always be success stories about those who chucked their “non-functional” accounting software for an easier life with Excel, the fact remains that using Excel exclusively as your accounting software product will ultimately cause more problems than it fixes.

Here are things Excel lacks when compared to a dedicated property management accounting software system:

Data Integrity
Excel’s flexibility, an asset on most fronts, can prove to be a detriment to those who utilize it as a complete accounting program. While flexibility in a spreadsheet program provides users the ability to customize data and change formulas when needed, the downside to using Excel as a complete accounting solution is that it customizes data and allows formula changes. Even an elementary accounting product offers a semblance of controls to ensure data integrity.

Protection Against User Error
Excel offers no double entry accounting system. The accounting equation Equity = Assets – Liabilities has been used for centuries with good reason. It keeps books in balance. And while any information entered into a computer is only as accurate at the person entering it, the fact remains that an integrated accounting program offers a level of protection that Excel cannot.

Ease of Use
You have to be really skilled in Excel in order to utilize it as an accounting software substitute. Yes, there are numerous templates available that make this process a bit easier, but in order to keep an accurate and organized record of your business transactions, you’d better know your way around Excel. In contrast, accounting software products have made it easier than ever to set up a solid financial system that requires little maintenance.

Efficiency
It’s much easier to track transactions, balance bank accounts, and produce accurate financial statements when using a traditional accounting program. Again, while it can be done using Excel, a small property management company that does not wish to spend a lot of time on accounting would be better served using standard accounting software, rather than spending hours trying to set up an Excel spreadsheet to produce the same information. In addition, some property management software programs have integrated the accounting functionality with online rent payments.

Using Excel as the spreadsheet program it was designed to be will produce more benefits to the property manager than spending hours trying to shape it into an accounting program.

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Your Paperless Office: Five Great Reasons to Move Payments Online

Jim Semick — Wed, 28 Apr 2010 23:34:20 +0000

A single check seems small enough. But added up, the checks your property management company deposits or prints can ultimately bury your staff under a mound of paper. If you are on the way to a paperless office but haven’t yet tackled electronic payments for receivables and payables, you are paying more than you need to run your operation.

Many property management companies use a blended approach of electronic and paper-based payments, although the trend is clearly towards electronic payments. Most electronic payment implementations involve a combination of one or more of the following:

Moving resident rent payments, application fees and other receivables online using ACH (Automated Clearinghouse) and credit cards.

Moving your payables online by sending electronic payments to vendors, owners or investors, employees and others.

You may have already implemented check scanning for receivables or MICR laser check processing for payables. Congratuations – both these technologies are effective ways to streamline your backoffice. However, these methods still carry handling costs. Electronic payments can dramatically reduce these costs even further.

Here are five great reasons you should implement electronic payments as part of your paperless office initiative:

Improve efficiency and accuracy. After all, isn’t that the reason you decided to go paperless in the first place? With electronic payments, your staff can save a significant amount of handling time and reduce errors. According to independent studies, each paper check you eliminate can save your company at least $2.00 in handling costs.

Greater security. Each time a check is handled, whether it’s by the post office or your backoffice staff, the odds of a loss or security issue is increased. Online payments are a more secure way of getting the payments into or out of your account.

Improve cash flow and visibility. Rent payments made using an ACH system are deposited more rapidly than a traditional paper check. Notification of non-sufficient funds occurs faster as well. In addition to faster funds availability, electronic payments provide your accountant and management team with a more real-time view into receivables and payables.

Fewer trips to the bank by you and others. Payments you receive online are automatically deposited at the bank, saving you trips to the bank and improving deposit security. Your payables are deposited directly as well, and although this doesn’t affect your bottom line, it’s the greener way to go.

More convenience for your customers. Payments by paper check are clearly on the decline, and forward-thinking companies are offering innovative electronic payment methods to their customers. In property management, you can provide more convenience to your customers: residents, vendors, investors/owners, and employees. These customers expect it.

You can find electronic payment solutions from multiple sources, including your bank, independent payment processing companies, and from your property management software vendor. Once you get started with electronic payments, you can streamline your operation even further and start to unbury your staff from that mound of paper.

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How Property Managers Use Social Networking to Grow Their Business (Apr. 22 Webinar Recap)

Aimee Miller — Mon, 26 Apr 2010 18:53:16 +0000

In this April 22nd webinar video recording, Mike Whaling, social media expert for the residential property management industry, talks about how property managers can incorporate social media (think Facebook, Twitter, blogging) into their marketing efforts and to connect with current and prospective residents as well as prospective owners.

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Rent Week Pain Relief: What’s the Best Online Payment Solution?

Jim Semick — Wed, 24 Mar 2010 21:51:08 +0000

It’s rent week again, and all hands are on deck. If you’re like many other property management firms, you have an unwritten rule: no vacation during rent week. You realize that rent checks cost your property management company time and money with unnecessary handling, data entry, errors, staff frustration and other inefficiencies. Surely there has to be a better way.

Even if you have invested in check scanning, implementing the right online payment solution can streamline your operation, improve your cash flow, increase resident satisfaction, and most importantly, minimize your staff’s pain during rent week.

Most online rent payments are made using electronic transfers from a bank account (ACH). Credit cards are a less popular choice for rent payments. You can find these online rent payment options from several vendors:

Online rent payment companies. You can partner with a solution that specializes in property management payment processing. With these solutions it’s important that you be able to integrate the online payment data with your accounting solution.

Property management software provider. Your current or future property management software vendor may offer online payment capability. The benefit of using this service is that it is often tightly integrated with your accounting system.

Your bank. You can work with your bank to send and receive electronic checks and credit cards. This is often the most cost-effective solution, but the most time-consuming for you to implement.

Here are a few essential questions to ask when evaluating any solution:

How much does it really cost? Evaluate the total cost for setup fees, monthly fees, and per-transaction/convenience fees. Even if you expect your residents to pay the convenience fee, keep in mind that the higher the fee, the lower your adoption rate.

Does it integrate with your accounting? Look for a solution that seamlessly integrates with your AR system. Many systems can generate an export file you manually import into your AR system, but this adds another step and delays reporting.

Does it provide real-time access? Does your resident get real-time access to their upcoming charges and payment history? If you need to manually upload charges and payments to the system, the information is outdated almost immediately.

How easy is it to use? Don’t overlook this one. A solution that is unintuitive or packed with bells and whistles may actually decrease adoption by residents. How easy is it for your back office staff to use the reports, NSF notifications and data without training?

What is the settlement time? After your resident pays, how soon are the funds deposited and available in your operating account? The most common settlement timeframes are 24-72 hours depending on pricing.

Are there a variety of payment options? Make sure residents have the option of one-time or automatic recurring electronic funds transfers (ACH). If you give residents the option of paying by credit card, keep in mind that credit card fees can be as much as $10-30 per rent payment, so you may want to find a solution that allows you to pass these fees on to the resident.

How flexible is the solution? Will the solution match your monthly processes? Ask whether you can select which operating bank account(s) the payments should be credited to, whether the system can be incorporated into your Website, and how much marketing support the company provides to increase adoption by your residents.

In the end, the choice you make depends on how quickly you want to get up and running, ease of use, how seamlessly it integrates into your accounting system, and how much you want to pay. Choose the right solution, and who knows, you might be able to take a vacation day during the next rent week.

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Seven Reasons Why Rent Checks Cost More than You Think

Seven Reasons Why Rent Checks Cost More than You Think

Jim Semick — Thu, 11 Feb 2010 15:00:36 +0000

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:

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.

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.

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.

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.

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).

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.

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.

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Ditch That Rent Check: A World of Online Payment Options

Jim Semick — Thu, 28 Jan 2010 17:35:50 +0000

Sure, the lowly check will be with us for a while. But that doesn’t mean that you can’t help send checks the way of the dodo bird. According to a Federal Reserve System study, check usage is in steep decline, and checks now represent only 30 percent of all non-cash payments. Electronic payments are now the clear winner with consumers.

But for many property managers, checks continue to be business as usual. If you are like most property managers in the U.S., you have explored online payments, but have not made them a core part of your operation. Even if you have implemented check scanning, there is a cost to every check you handle – moving more of your resident payments online can save your property management business time and money every month.

If you haven’t yet made the move to electronic payments, ACH and Credit Cards are great ways to go checkless. There are many services that can help you implement a solution quickly and begin offering online payment options to your residents.

ACH (Automated Clearinghouse)

ACH is an electronic funds transfer from the resident’s checking or savings account to your operating account. Residents pay their rent directly online or through a transaction that you initiate. You typically receive funds 48-72 hours after the resident pays. You can get ACH processing from many payment processing companies or directly from your bank.

If you get the ACH service from a payment processing company, the resident (or you) pays a convenience fee typically ranging from $1.00 to $3.00. The advantage of picking up the tab is that you get more residents signing up for the program, and thus greater savings for you by handling fewer checks.

Online payments shouldn’t be expensive however. You can find solutions with a low transaction fee structure and low monthly fee. Another important factor in your decision: Your payment solution should seamlessly integrate with your accounts receivable system. Any savings you get from online payments will be wasted if you are stuck entering payments by hand into your system.

Your bank can offer you ACH services at a low cost, but the hassle and time implementing this yourself will reduce any savings you might realize. You will need to have a software solution that can create an electronic file in the correct format and then upload that file directly to the bank for processing.

Credit Cards

There are a variety of ways you can use credit cards in your operation. Many property managers accept cards for deposits and application fees only, while others will gladly accept them for rent.

The challenge with credit cards is the high transaction fees that must be paid by you or the resident. For rent payments, these fees can be significant, running $10 to $30 or more. A resident who is faced with a steep late fee from you may gladly pay the credit card fees instead.

While you can become a credit card merchant and process the payments directly from your office, the easiest way to accept credit cards is to partner with a service that will administer the program and collect the transaction fees directly from the resident. These services will often offer an online portal for your resident to pay directly online.

Of course, the check will be with us for the foreseeable future, but there are many options that can help you streamline your process today and reduce the pain of rent week. The choice you make depends on the options you want to offer your residents, how much you want to pay for offering that convenience, and whether you want your operation or the resident to pick up the cost.

Jim Semick is the Director of Customer Development at AppFolio where he is responsible for software market development, new property management software technology, and working with property managers to provide input into the AppFolio Property Manager product.

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SoftwareAdvice.com Survey: How Are Property Managers Using Technology?

Aimee Miller — Wed, 23 Dec 2009 15:00:19 +0000

SoftwareAdvice.com recently sent out a survey to learn more about how property managers are using technology in their business.

A few interesting highlights:

1. Almost half of the companies surveyed grew their business last year – either growing by increased revenue or more units. This is great to hear in a struggling market! But how did they do it? The companies that grew made use of technology – over 60% used property management specific software.

2. The survey also found that companies who used property management specific software managed an average of 102 units per employee, this is compared with those who use spreadsheets or more generic software – they averaged 61 units per employee. The SoftwareAdvice team believes this is because investing in technology enables business growth.

3. Although there is so much talk about Facebook and Twitter, there was no concrete evidence from the survey showing that businesses who engaged in social media tactics really had more growth. I think this is for a variety of reasons – the property management industry (and many others too!) is still building knowledge and learning about how best to use social media to engage with prospects and customers. Using social media tools like Facebook and Twitter is first about building loyalty and communicating with your existing customer base so it will always be hard to track the effectiveness with solid Return On Investment (ROI) numbers. It is like getting a referral from a few happy customers…you know they drive your business but this lead channel is always difficult to quantify.

For the complete survey, click here.

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Preparing Your 2010 Property Management Marketing Plan (Dec. 15 Webinar Recap)

Aimee Miller — Thu, 17 Dec 2009 20:41:12 +0000

On December 15 AppFolio hosted a joint webinar with Multifamily Insiders and brought in a special guest speaker, Lisa Trosien. In the video below, Lisa shares her perspective on marketing trends, social media, tips and creative ideas from around the country to help you create a great plan for marketing your vacancies and property management business in 2010. Lisa is an award winning multifamily speaker, educator, marketer and consultant. If you’re interested in learning more about her services, go to www.apartmentexpert.com.

Below we’ve included links to video recordings / slide decks of previous webinars:
4 Year-End Property Management Accounting Best Practices, (Nov. 19, 2009)
Top Marketing Trends in 2010 To Help Property Managers Capture More Market Share, (Oct. 29, 2009)
Website Best Practices for Property Managers, (Sept. 15, 2009)

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Keeping up with the Jones’s: Compare Away!

Aimee Miller — Mon, 21 Sep 2009 17:40:32 +0000

Here are three sites I’ve found that help property managers compare things that are worth comparing:

Average rental rates
This is a helpful tool from RentBits (link). It lets you compare rents for apartments and houses in many geographic areas. It has an easy interface and you can see both the average and median prices over the past 6 months. Definitely helpful when figuring out the right market rent.

Grade your website for free, and compare against your local competition
Hubspot provides a cool site (link) that allows you to enter your website and others you care about (maybe your competitor? your friend?) and then you get a “website marketing score” that incorporates things like the traffic to your site, SEO ranking, social popularity and a few other factors. The report is emailed to you and you can get some quick advice on how your website could be improved from a marketing perspective.

Find out how you’re doing with Local Search
GetListed.org (link) shows you how your business is listed at Google, Yahoo, Yellowpages.com and other search engines. Then it gives you the links to update and manage your local listings. Local search is very important for property managers interested in improving their “organic” search rankings.

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Moving Marketing Online: Interview with Nick Scarabosio, Jackson Group Property Management

Aimee Miller — Mon, 14 Sep 2009 21:08:26 +0000

I recently had the chance to speak with Nick Scarabosio from Jackson Group Property Management in San Francisco, CA. San Francisco is a competitive market and you have to be thinking of creative ways to reach your audience…and Nick is pretty creative!

Aimee: How has your property management marketing changed over the past couple of years ?
Nick: Our marketing has changed quite a bit over the last few years – especially how much more we can do, for less. We used to be heavily focused on print advertising and mail, both are very expensive. But now we’re more focused on using online marketing to reach our customers. And this definitely saves us money.

Aimee: It sounds like you’re spending your marketing budget differently, what are you doing?
Nick: Yes we are. We have reduced the advertising budget because we are exploring different avenues. We’re spending on targeted Google Adwords as well as testing some Facebook advertising. We basically only do print ads in the Yellow Pages – the majority of our advertising is now on the Internet.

Aimee: You’re in San Francisco so I’d assume the people are pretty tech-savvy – do you think your approach works in all markets or just those like San Francisco?
Nick: I think it works especially well in markets like San Francisco but the ideas apply for everyone because our culture has changed in the last 10 years due to the tech boom. I know grandparents who are getting on the Internet now to talk to grandchildren and they realize it is an easy way to do business from greater distances. Phone books are getting out of date – you can use the Internet to look up and find a property manager in New York even if you’re in Los Angeles.

Aimee: How did you get started using the Internet for marketing?
Nick: It has definitely been trial and error because I really like to figure it out on my own. I started working by putting together the Google ads together myself. You really need to start with the simplest form you can find – I think you have to be hands-on to be sure your ideas really come through.

Aimee: What are your most effective Internet channels right now?
Nick: Craigslist right now is the #1 resource. In San Francisco 95% of rentals are filled via Craigslist postings. Second is social networking like Twitter, Facebook, MySpace – it is not always what you know it is who you know! So we use it for finding residents as well as business networking, owners, potential clients, vendors. We’re building our Facebook community and we use word of mouth extensively. If I know I have 25 friends in San Francisco who are in the business in my social networking group I’ll ask for a referral for a painter or plumber. It is natural to look for personal referrals so we always make sure to provide great service so our network will feel good referring us.

Aimee: Do you still find time to engage with the local community?
Nick: First you have to have a good foundation, meaning a good market presence and solid company. You always have to be involved with the community. An example is we do simple flyers to neighbors when we take over a property saying something like “Jackson Group is proud to have rented 120 A Street, please join us on Facebook where we share local offers and specials.” It is important to have a good mixture because it is hard to get people to just find you on the Internet. Find opportunities to connect with neighbors to get people to join you online, then you really have your presence set.

Aimee: How do you use Twitter and Facebook?
Nick: We listen on Twitter for different words but Facebook is the most important for us. On Twitter you can’t just sit there waiting for people to find you. Proactively look up people in your area that might be talking to your prospects. If you say something great they might “retweet” to their followers. With Facebook it can be even easier, you may be able to get in on a conversation that has bearing on what you do and then you can get involved. You have to take the time to listen to what other people are saying. So don’t just post vacancies to your community – that’s boring after a while. We even go as far as putting together a plan so we mix city info with resident info. An example is we’ll inform people that composting is now mandatory in San Francisco and we’ll provide the link and more details.

Aimee: What do you want to do next?
Nick: We’re trying to build a web following where people really want to hear a daily update from Jackson Group. We want people to feel that we provide good quality information and basically build trust so they will recommend us in the future. We want the reputation that if you’re a client, resident, vendor or someone who lives in the area you trust and listen to us. When we build an audience who trusts us, our name is in their mind when they have a future need…so they come to us eventually.

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