January 29, 2021
Utility Billing Solutions: All-in-One vs. Best-in-Breed
If you want to effectively manage utilities and increase cost recovery at your multifamily property, an all-in-one system will manage your utilities for you. But there’s an issue: they don’t offer the domain expertise to maximize the cost recovery of your property. In this post, we’ll examine whether an all-in-one property software system can manage your utilities, then present the case for a (basically free!) alternative that will swiftly increase your NOI.
All-in-One Property Management Solutions
Most multifamily property owners use some type of property management software to run their day-to-day operations. And there are dozens of vendors who provide these core suites.
All-in-One Solution Features
All-in-one property management solutions can theoretically handle every aspect of managing your property. This includes rental listings, vacancies, rental applications and more.
One popular all-in-one, for instance, offers everything from accounting and operations to leasing. You can build a website for your property. Take online rent payments. Monitor your financials. Track maintenance requests. Screen tenants. The list goes on and on.
That, naturally, is a pretty attractive value proposition for a landlord or property management company. An all-in-one means one bill, one system of record and one place to go for support.
In many ways, absolutely. Good property management solutions can be a game-changer for landlords. But there’s an issue: Doing everything doesn’t mean doing everything well.
Think, for instance, about utility billing and management.
Can All-in-One Property Management Software Manage Your Utilities?
Leading all-in-one suites do offer utility management service. They can automate billing and bill processing, collect utility data and more.
The devil, however, is in the details.
Simply being able to capture meter readings or implement a form of RUBS is one thing. An expert, strategic approach to utility billing and management is quite another. Your all-in-one, for instance, won’t be able to identify sources of potential waste, troubleshoot submeters or keep up with the latest regulations.
That’s not a bad thing, necessarily – it’s just not what property management services are meant to offer. But any unrecovered utility costs will come straight from your bottom line.
So what’s the answer? Augmenting your all-in-one property management suite with a technology-enabled utility billing service.
Using a Utility Billing Vendor
The best utility billing vendors deliver two core components:
- Hands-on expertise and service
- Access to best-in-class software
This combination of domain expertise and dedicated technology provide a number of benefits for owners.
Properly managing utilities – and maximizing cost recovery, in particular – requires quite a bit of experience and focus. Regulatory compliance, utility analytics, tenant education, advanced ratio allocation, delinquency monitoring and technical meter installation are all essential parts of managing utilities. That’s not something you learn overnight.
Working with a focused utility billing company allows you to leverage domain expertise that isn’t available from property management services. This makes it easier to solve problems and improve cost recovery.
Say, for example, the logistics of your property allow you to submeter only half of the units. A billing company could set up an advance billing method – like allocation by metered reduction – that uses both submetering and RUBS – to create bills that are fairer and more accurate.
None of this, by the way, would force you to abandon your core property management software. A utility billing service simply helps you optimize your property and maximize the money you recover from billing and collections. The best can integrate their purpose-built software directly with your all-in-one, making the technology handoff seamless.
Return on Investment
A well-managed utility billing system delivers a significant ROI throughout the life of the property. You’ll likely more than cover the cost of a utility billing company through increased recovery and decreased waste.
Better Experience for Tenants
In addition to hurting profitability, poorly managed utility billing also creates a bad experience for tenants. Errors like late invoices or unfair bills can lead to complaints and turnover.
Working with an experienced utility billing company lets you provide the consistency, flexibility and payment options that tenants want.
Billing fairly and offering control over expenses creates a happier tenant. And a happier tenant will tend to stay longer, which is more profitable than turnover.
Poorly managed utilities can sink the NOI of any multifamily property. It’s a hidden expense sucking away at your profitability. And while an all-in-one property management suite does offer utility management services, it won’t offer the strategy and experience of a utility billing vendor.
You can, however, combine the two to get the best of both worlds. A great utility billing company can save you money off the bat and improve the experience of your tenants– essentially for free. And since they’ll work with your existing software solution, change management is a snap.
In the end, it is possible for an all-in-one property management software system to manage your utilities. But wouldn’t you rather maximize your cost recovery with a specialist?