February 24, 2021
Onboarding a Utility Billing Company: What to Expect
Working with a utility billing company can help multifamily properties save thousands every month in utilities. Here’s what it takes to get started.
Utility billing companies are a vital resource for property owners and managers who need help recovering utility costs. Despite this, many owners find the process of getting started with a new utility company rather daunting.
The good news is it’s easier than most people think. So, whether you’re with another billing company or doing it yourself, here’s what to do.
The first step is to set up consultations with utility billing firms, also called RBCs (read, bill, collect). This means shopping around for quotes online and setting up calls.
During the call, you’ll be able to ask a range of questions about utilities. The RBC’s goal is to identify the problems you’re having and a way to solve them. And to do that, they’ll need to gather a lot of information and ask questions.
First, the RBC will need to understand your property’s utilities and how you’re currently managing them. They’ll also need basic property information for an onsite visit. Here are the questions you can expect.
- Can you tell me about your property? Includes number of units, current utility costs, and any problems you’re facing.
- Do you want to pass fees onto residents?
- Do you already have submeters installed?
- Are you reading the submeters visually or with an AMR system?
- If you have submeters, which utilities have you metered?
- What utilities are you interested in billing? Water, gas and electric are the most common. But an RBC can also help with sewer, trash, internet and cable.
- What services do you need from the billing company?
- Meter reading
- Bill creation
- Bill collection
- How many meters do you have?
- What is the name and address of the property?
- Is there a gate code?
Once they have a better understanding of your property, the RBC will ask about how you’re currently managing your utility expenses.
- What property management software do you have?
- Are you currently with another billing company or managing it yourself?
- What issues are you having with your current RBC? Common issues include lack of communication, missing funds and bills created based on estimates.
- What challenges are you running into doing it yourself?
- Do you need to retrofit an existing property or build a system for new construction?
If you don’t already have submeters installed, the RBC will evaluate which utility billing method is ideal for your property. There are two options: submetering and RUBS.
Most firms start by exploring the viability of submetering as it provides the strongest benefits under the right conditions.
With accurate reads, high cost recovery and significant ROI, the upside of submeters is significant. However, it does require an initial capital investment and comes with installation requirements.
For a property to be a good candidate for submetering, it needs a centralized point into the unit that allows the RBC to get a full capture of all utilities entering the unit. To determine this, they’ll ask you to send them a picture of where the utilities enter the unit.
If technical requirements are satisfied, and you’re comfortable with the upfront investment, submetering will work for your property.
If these conditions aren’t met, you don’t have the cash to deploy submeters or you just need a quick fix, the RBC will use RUBS to calculate your bill.
RUBS, short for ratio utility billing system, is a billing method that proportionally allocates utility costs to tenants. It’s used to bill costs for water, gas, electric, trash, cable and other services to residents – all of whom are weighted differently based on an industry-accepted formula.
RUBS is extremely easy to implement, so the RBC won’t need much information during onboarding if you use this method.
Onboarding with an RBC is a straightforward process. Most of the work will fall on your new partner. You’ll just have to provide the necessary information and access.
Most property managers assume it’s important to share rent roll right away. But it’s more important to take care of the billing methods first.
The RBC will set up your property in their billing software, then define and build out the chosen billing method for your property. You can speed up this process by telling them how you or your previous company handled billing.
If you chose to deploy new submeters, there will also be a step for installation. The submeter installation process can be complex, so the utility billing company will work with a certified technician to properly deploy the system. The quality of the installation has a significant financial impact on your property – and a number of safety implications. Because of this, this step takes time when done properly.
Once the methods and submeters are in place, you’ll need to provide the following:
- Access to submeters (if applicable). Depending on how the meters are read, it could be physical access for visual reads or a modem number to connect to.
- Complete rent roll, including names, move in, move out and occupancy.
- The first utility bill you need billed.
Once the RBC has this information, they’ll draft the first month’s bills and invoices. Management will then review the work and have opportunity to adjust invoice templates. Once approved, the RBC will lock the billing process and send the invoices.
At this point, the property is live.
The final step is for the RBC to set you up with an online account where you can access your portfolio and view billing and financial reports. This may entail a training session to walk you through different actions on the website.
More property owners and managers are working with RBCs to cut costs, save time and transform their bottom line. If you’re considering utility billing to get your cost recovery under control, onboarding an RBC is easier than you might expect.