Are you tired of drowning in a sea of invoices, receipts, and paperwork? As a real estate professional, managing accounts payable can feel like an endless and daunting task. But fear not – there’s a game-changing solution that can help you streamline your financial operations, cut costs, and free up valuable time: accounts payable automation.
By automating your accounts payable processes, you can ensure smooth work functioning with your vendors, and improve your bottom line by reducing errors, and avoiding late payments, leading to better operations.
Let’s take a closer look at the benefits of accounts payable automation for real estate, so you can see why it’s a smart investment for your business. So, let’s get started!
Who are these Vendors to Real Estate?
No real estate company can function in isolation and working with several businesses and vendors is vital for its growth. So, who are these vendors and businesses that are very important for real estate firms? Here are some of them:
- Architects and engineers
- Building materials suppliers
- HVAC contractors
- Plumbing and electrical contractors
- Painting and finishing contractors
- Furniture and decor suppliers
- Home warranty companies
- Moving and relocation services
- Marketing and advertising agencies
- Home inspection companies
- Title and escrow services
- Mortgage lenders and brokers
- Property appraisal firms
- Environmental testing and remediation services
- Home automation and smart home technology providers
Of course, there are many other types of vendors that can be relevant to real estate, depending on the specific needs and goals of a particular property or project.
Challenges with Real-Estate Accounts Payable
Accounts payable are an essential function in any business, and the real estate industry is no exception. However, the real estate industry poses unique challenges and problems for accounts payable professionals. Here are some challenges and problems that arise in accounts payable in the real estate industry.
1. Inaccurate or Incomplete Invoices
One of the most significant challenges in accounts payable in the real estate industry is inaccurate or incomplete invoices. This issue arises because real estate transactions frequently involve multiple parties, making it difficult to keep track of all the details.
Critical information such as the property address, unit number, or lease term may be missing from invoices, making it difficult for accounts payable professionals to process payments accurately.
It occurs when accounts payable professionals fail to implement a proper system for validating invoices and fail to follow up with vendors to obtain missing information.
2. High Volume of Invoices
Another significant challenge in accounts payable in the real estate industry is the high volume of invoices that must be processed. Real estate companies often have multiple properties and tenants, each with its own set of invoices. Processing all these invoices can be time-consuming and overwhelming for accounts payable professionals.
Real estate companies fail to consider implementing an automated accounts payable system that can streamline the invoicing process.
3. Reluctance to switch to automated AP solutions:
As the majority of the real estate business has been around for a long time, most of them still rely on age-old practices which come with their own set of challenges and problems. For example, manual or hybrid, the processing is almost always performed by relying on paper-based processes, spreadsheets, or other manual and time-consuming processes which increase the likelihood of errors burns more time and are often difficult to manage and optimize for better performance.
In the age of automated solutions, customized real estate Accounts Payable solutions, cloud storage, and computing, manual and paper-based processes hold back real estate accounting from achieving better performance.
4. Late or Missing Invoices
Another significant issue in the real estate industry’s accounts payable is late or missing invoices. When vendors fail to submit invoices on time or when invoices get lost in the shuffle, this problem can arise. Late or missing invoices can result in delayed payments and strained vendor relationships.
There is a lack of clear guidelines for invoicing and regular follow-up with vendors to ensure invoices are submitted on time.
5. Duplication & Discrepancies in Billing
Discrepancies in billing are another common problem in accounts payable in the real estate industry. This problem can arise when vendors bill for services or products that were not provided or when billing amounts do not match the agreed-upon rates.
Whereas, duplication of information can lead to major financial mismanagement, especially in a high-ticket industry like real estate.
6. Complex Payment Processing
When dealing with multiple properties and tenants, the real estate industry frequently involves complex payment processing. Accounts payable professionals face significant challenges in managing payment schedules and ensuring that payments are processed on time.
Manual payment processing can also complicate accounts payable, causing delays and even financial losses over time.
Why Real Estate Companies Should Embrace Accounts Payable Automation: A Look at the Benefits
1. Increased Efficiency and Accuracy
Accounts payable automation can improve the efficiency and accuracy of financial transactions in the real estate industry significantly. Businesses can eliminate manual data entry, reduce errors, and ensure payments are processed on time by automating invoice processing. This leads to fewer discrepancies and faster payment processing times, which can assist businesses in maintaining positive relationships with vendors and suppliers.
2. Enhanced Security and Fraud Prevention
Accounts payable automation systems are useful in the prevention of fraud and unauthorized access to confidential financial information. Automation solutions provide multi-level authentication and authorization processes, secure electronic document storage, and strong encryption methods to protect financial transactions from fraud. This is especially true in the real estate industry, where large sums of money are frequently on the line.
3. Cost Savings
Accounts payable automation can save real estate companies a lot of money. Businesses can reduce the need for manual labor by automating invoice processing and payment schedules, which can result in lower staffing costs. Automation also assists businesses in avoiding late payment fees, which can accumulate over time and result in unnecessary costs.
Furthermore, by streamlining the payment process, businesses can take advantage of vendor and supplier early payment discounts, resulting in additional cost savings.
4. Improved Vendor and Supplier Relationships
Real estate companies rely heavily on vendors and suppliers to provide goods and services that are critical to their operations. Accounts payable automation can help businesses maintain strong relationships with vendors and suppliers by reducing payment errors and improving payment processing times. Payments can be processed more quickly and accurately with automated systems, which can help businesses build trust and credibility with their partners.
5. Greater Visibility and Control
Accounts payable automation gives businesses greater visibility and control over their financial transactions. Businesses can use automated systems to track payments, view invoices, and manage their accounts payable in real-time. This enables businesses to make more informed financial decisions, identify potential problems early on, and make necessary adjustments to their strategies to stay ahead of the competition.
<strong “>How to Implement Accounts Payable Automation for Real Estate
Congratulations! You’ve made the decision to implement accounts payable automation in your real estate company. Making this decision can result in increased efficiency, accuracy, and cost savings for your company. But how do you go about putting this technology into action? Here are some procedures to follow:
The first step is to assess your existing accounts payable process. This includes identifying your current system’s pain points, bottlenecks, and inefficiencies. Examine the number of invoices processed by your company, the time it takes to complete each step, and any errors that occur. This will provide you with a starting point for comparison once automation is implemented.
Research and Select the Right Solution:
You can begin researching accounts payable automation solutions for the real estate industry using the information gathered from evaluating your current process. Look for a solution that is scalable, flexible, and offers excellent customer service. Take into account the pricing, integration capabilities, and user interface. Choose a solution that will scale with your company.
Define Roles and Responsibilities:
To ensure successful implementation, roles, and responsibilities for each team member involved in the process must be defined. Roles such as system administrator accounts payable manager, and accounts payable clerk should be assigned. Define the responsibilities of each role and how the automation system will affect their daily tasks.
Develop a Plan for Data Migration:
You must transfer your current accounts payable data to the new automation system. Plan how this will be done, including any data cleansing and mapping that may be required. Test the data migration process to ensure that the data is accurate and complete.
Train Your Staff:
A new system entails a learning curve. It is critical to train your employees on the new automation system so that they are comfortable with the new process. Train users on the system’s features, user interface, and troubleshooting. To ensure that your staff is prepared to use the system, comprehensive and ongoing training should be provided.
Test and Monitor:
After you’ve installed the automation system, thoroughly test it to ensure it’s working properly. Regularly monitor the system to identify any problems and ensure that it is providing the expected benefits. Collect feedback from your employees and vendors to ensure that the system is functioning properly.
Use AP Automation for Competitive Advantage
But perhaps the most compelling reason to embrace accounts payable automation is the competitive advantage it can provide. In a rapidly evolving industry, staying ahead of the curve is essential. By adopting automation, you can differentiate yourself from your competitors, attract new clients, and build a reputation as a tech-savvy and efficient real estate business.
Ultimately, if you’re looking to take your real estate business to the next level, accounts payable automation is a smart investment. It’s a powerful tool that can help you optimize your financial processes, boost your productivity, and enhance your profitability. So why wait? Choose the right AP automation software today and see the difference it can make for your business.
