With an economic downturn looming, the market is poised to shift in favor of buyers and renters. To navigate the changing commercial real estate market, your residential property management company must embrace technology and efficiently manage its costs and working capital. That starts with streamlining back-office operations.

The Demand for Digitization

COVID-19, combined with a demographic shift, has increased the demand for everyday digital tools. An increasingly large share of tenants are young people—and they expect:

• Information in a single location, not through mail, phone calls or multiple logins.
• Electronic and mobile documents, such as leasing applications, renewals and cancellations.
• Modern payment methods, including electronic, mobile and real-time payments and refunds.

Common Challenges Across Property Management Companies

Meeting these requests may be difficult for management companies, which operate in silos created by a decades-long history of organic growth and acquisitions-related expansion. The resulting piecemeal legacy platforms, antiquated processes and "we've always done it that way" mentality makes it difficult to introduce innovative digital solutions. 

• Time-consuming paper processes increase costs and the risk of fraud 

Many management companies use paper for everything from leasing applications to vendor invoices. These manual processes require more staff members and consume time and money that could be spent developing innovative solutions. They also put companies at a higher risk for internal and external fraud.

• Relationships and accounts at multiple banks can trigger higher bank fees.

Oftentimes your management company uses separate accounts outside of their primary bank. Those accounts multiply, as do bank fees, when you consider accounts receivable, accounts payable and payroll.

• Poorly implemented technology can cause process inefficiencies. 

Without the necessary customization, modules and integration, newly implemented systems may cause more problems. Because the technology may not be properly utilized, the business may question its investment and avoid future ones.

• Incomplete forecasting and reporting can increase the risk of falling behind competitors.

Manually compiled, incomplete inputs are less reliable, making your true cash requirements and funds available for investments unclear. This dearth of data analysis-based insights on things like tenant behavior put you at a disadvantage. 

• Advocating for solutions is more difficult without a treasury team or formal key performance indicators (KPIs).

Companies that lack a designated treasury team often lack KPIs, not only across treasury, but also accounts payable and receivable teams. Without a dedicated treasury team, building the business case for an end-to-end solution can be difficult.

Streamlining Operations to Create Efficiencies

Your company may be hesitant to change. However, if you don't upgrade your back office, your front office and growth could suffer.