Property managers have a lot of responsibilities but if they can’t effectively collect fees from their customers then they can’t do much else. While it may be cliché, it’s true – cashflow is the lifeblood of any business, so property managers find effective, efficient, and convenient methods to collect payments to enable growth, enhance customer service, and optimize planning.
Cash remains a preferred payment method for many Americans which means this option keeps many customers happy, but alternatives such as electric, debit, and credit are quickly becoming more favorable to Americans. For businesses, the benefit to cash, once it’s handed over to you, is that it’s readily available to be used without no transaction fees, waiting periods, or account holds.
However, cash payments can pose challenges to property management companies, it’s more difficult to anticipate which can throw off planning. To collect cash payments, companies require staff to be available when customers come into the office which can slow productivity by interrupting other work and increase labor costs. Ultimately cash is difficult to document requiring manual steps which can disrupt staff for long periods of time and its hard to trace because it is not electronic.
Personal checks offer many of the same problems as cash, they are difficult to trace and time-consuming to document. They can also bounce or be put on holds which can delay the time it takes for companies to access funds. A bounced check can cause turmoil between customers and property managers diminishing customer relationships.
Cashier’s checks are far more trustworthy than personal checks because the funds are guaranteed by the customer’s bank. A cashier check comes directly from the bank and is only created after the bank withdraws the money from the owner or tenant’s account.
Mailed checks are an option for owners who may not live nearby their property or property manager’s office and for tenants who are away. Unlike cash, these checks help overcome distance, but they’re still difficult to track. They’re also at risk of being lost in the mail which can cause distrust and confusion for customers and employees.
In person credit and debit payments are convenient because the paid funds are quickly transferred to your organization and available. Because both are electronic forms of payment, the payer and payee are provided proof of a payment which facilitates tracking and documentation. Organizations are often charged transaction fee when accepting credit card payments, but those fees can be charged back to customers to offset costs.
Collecting rent online minimizes workload for accounting teams who would otherwise be spending time collecting cash payments, recording them, or entering them individually into their software system individually for every customer in the portfolio. An integrated payment processor allows owners and tenants to pay charges conveniently at any time, on-demand which are then automatically available to your accounts receivable team.
When processing ACH/EFT, also known as “electronic funds transfers” or “e-checks,” payments you can easily process multiple payments at once. Payments are always on time because they are pulled by your accounting team not the payer i.e. owner or tenant. Having this technology in place can also simplify accounts payable for instance, if for any instance money needs to be returned a customer, if there is a refund being processed, or if your company is offering a discount on fees.
No one payment method can be 100% perfect for your property management, but by weighing out options as well as the pros and cons, you can create a payment strategy that benefits both your team and your customers.