If you own or manage multifamily residential units–apartments, condominiums, student housing, inexpensive housing, manufactured houses, or military housing–you are almost certainly involved in utility billing in some fashion. Utility expenses for these kinds of properties can be substantial so most owners look for efficient techniques to manage these costs.
The Utility Master-Meter Predicament
It is quite typical for multi-residential and multi-tenant commercial properties to be “master-metered.” Master-metered properties obtain a single utility bill that consists of utility consumption for numerous tenants. The dilemma with master-metered properties is that there is no way to bill residents for their actual, individual usage.
This scenario has led owners to use a selection of techniques to divide the utility bill so that they have a indicates to recoup the tenants’ share of the overall utility expense. In fact, transitioning a multifamily complex from owner-paid utilities to resident-paid utilities can be one of the fastest methods to boost net operating income (NOI).
Resident utility billing is managed in two approaches: internally by owners and property managers or externally by a third party utility billing service provider.
Whilst there can be benefits to managing utility billing “in-home,” billing companies have invested extensively in software program tools and technologies to streamline billing so that it is an efficient, well-supported method. Utility billing is undoubtedly a task that can be quickly outsourced, saving property owners and managers substantial time and effort.
Utility Billing Service Alternatives
The fundamental set of services provided by utility billing providers includes:
- Resident bill calculation, printing, and delivery
- Utility payment processing
- Electronic bill presentment and payment
- Property management/accounting software integration
- Late payment administration and collections.
Billing businesses also give other services such as convergent billing, vacant price recovery, and utility expense management.
Since multifamily owners have a wide range of requirements and billing organizations supply a diverse set of services, it’s typically the case that a specific billing provider will be greater suited to manage your portfolio. It is important, consequently, to clearly outline your requirements so that they can serve as a guide during your evaluation method.
Frequent Challenges in Utility Billing
Understanding the most typical troubles that plague the utility billing industry will support you select a provider you will be satisfied with. A list of issues that trigger the most frustration and unnecessary function for property owners and managers includes:
- Inaccurate and late resident bills
- Customer service that is unresponsive to residents and management
- Manual information entry.
The quickest way to irritate tenants and spur high volumes of calls to the leasing office is to send bills to the wrong residents, calculate those bills incorrectly, or deliver them late. Inaccurate bills undermine resident confidence in the billing process and lead to vocal complaints–often to the public utility commission. And late bills create hardships for residents because they result in a shorter timeframe to pay. Utility billing works very best when it’s managed in a consistent, reliable, skilled manner.
Poor customer service such as unanswered and unreturned phone calls and e-mails or untrained call center staff offering incorrect data will most surely generate tenant criticism. Quickly, friendly, responsive service is the key to a profitable resident utility billing program.
Utility billing generates a substantial amount of information that need to be integrated into property management and/or accounting systems. If the only option obtainable to staff members is to manually enter this data, the process can be extremely time consuming, labor intensive, and prone to error. This is a key area to address when selecting a billing provider.
Asking a prospective vendor the following questions will aid you conduct a thorough evaluation and choose a utility billing organization that best meets your wants.
Billing Services
- What types of billing does the firm administer: submetered, RUBS, flat fee, etc.?
- What billing services are offered: convergent billing, electronic billing, vacant price recovery, payment processing, etc.? [Which services do you need?]
- What kind of electronic payment alternatives are available, e.g. electronic check, credit card, ACH, autopay, etc.?
- What are the expenses associated with on-line payments? [It's widespread for on the web transaction processing companies to charge a service fee of three-four% for credit and debit card transactions.]
- What is the method the vendor follows for ensuring accurate utility bills? [Vendors should incorporate a data analysis and audit procedure to guarantee that billing data is accurate.]
- How and when are utility bills estimated? [Some states have strict rules about when and if bills can be estimated.]
- If bills are sent to residents that are inaccurate or late, what recourse is available to the property owner/manager?
- Describe any performance guarantees provided. [A lot of billing businesses offer refunds or pay financial penalties if they are the cause of an inaccurate or late billing.]
- If the firm has a performance guarantee program in location, what is their track record for the last 1-2 years?
Customer Service
- How does the firm supply customer service to residents and management? [If the firm gives a customer support line, ask for the phone number, call in and see what kind of response you get.]
- What is the typical response time for a resident or staff member to receive an answer to an inquiry? [Anticipate response times in the 1-2 hour range.]
- How are customer service representatives trained?
- Does the business track performance metrics related to its customer service department?
- What is the company’s track record for the last few years?
- What is the difficulty escalation method for more challenging issues? [Depending on the sort of problem, you want to confirm that staff members at the executive management level are offered if necessary.]
Account & Billing Data Integration
- How is move-in/move-out information exchanged? [The data exchange process really should be extremely automated and require very little manual data entry.]
- How is convergent billing information transferred? [Rent, cable, Net, trash and other fees can be added to utility bills to encourage timely payment.]
- What is the process for synchronizing billing and payment data with your property management or accounting system?
Legal and Regulatory
- Does the company realize the regulatory and legal issues regarding your state, county, and city? [Basically you need to confirm that it is legal to bill for utilities employing the strategy of your choice in your area.]
- How does the firm assist with legal compliance?
- Will the firm review your lease agreement?
- What kind of billing contract is utilized?
- If the billing company fails to perform satisfactorily, what options are offered for terminating the contract?
Reporting Capabilities
- What reporting info is supplied to management? [Review sample management reports to ensure that the details you require is included and is effortless to understand.]
- Can reporting be accessed on-line? [It can save staff members a lot of time if the vendor delivers a management portal or other web-based interface for viewing and printing management reports.]
- Can reporting be customized for your portfolio? What are the fees associated with customizations?
Submetering Services
- What submetering installation and repair services are provided? [If your property is submetered, working with a billing company that offers submetering installation and repair services can be advantageous simply because these systems require routine maintenance.]
- How are repairs scheduled and managed?
- What analysis is performed on usage information to detect leaks, meter issues, or possible maintenance issues?
Other
- How are master-meter bills handled?
- How are final utility (move-out) bills for residents produced?
Summary
Developing a clear set of your own requirements and posing these questions to prospective utility billing service providers will aid in your evaluation procedure and guarantee that the company you choose can meet your expectations. Utility billing need to be a quite seamless procedure requiring minimal time and effort on the portion of your staff. It ought to also maximize the amount of money you can legally collect with a utility cost recovery program. The very best utility billing businesses are responsive, flexible, and committed to offering outstanding service to all stakeholders.
