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How to Use RPA to Get the Most Powerful Results for Property Management Accounting
October 24, 2022
0 min read
Innovation isn't typically a top priority for property managers, but it should be. Innovation through automation can offer significant benefits and allow you to gain a competitive edge in a fiercely competitive real estate landscape. This is why RPA is sweeping through the property management sector.
RPA, or robotic process automation, helps streamline property management operations and reduce costs. Or, in other words, it handles all the boring and time-consuming manual processes so you can focus on the jobs that add value.
One of the most prominent use cases for RPA across industries is accounting, and with good reason. Accounting is stacked with tedious, repetitive, rules-based processes, making it a prime candidate for disruption via automation. But what exactly can RPA do for you? How does it help with accounting? And which smart bots are having the most impact today? Let's get into it.
Why Use RPA to Help With Accounting?
Here's the bottom line. Accounting processes are some of the hardest to scale manually. From daily data entry, invoice processing, and income statements, to preparing end-of-year reports, there's so much to do and limited time and people to get it done.
The manual intensity of accounting can become a problem for property management companies. Finance teams don't just crunch numbers. They also help company decision-makers steer the direction of the company. However, if finance teams are overwhelmed with daily repetitive tasks that eat up all of their time, they have little time and energy left for high-order tasks. This is also true for smaller-scale property managers.
This is where RPA comes in. RPA helps save time and money by boosting productivity across the board, improving efficiency to generate income, creating better tenant experiences, and eliminating human error.
High-Impact Use Cases of Smart Bots in Property Management Accounting
Tracking and processing rent income is arguably the most critical task for any property manager. Without rent income coming in, the company can't function. However, while managing rent income is crucial, it's also time-consuming and error-prone.
Every hour employees spend manually reading rent checks and entering the data into various other systems is time they could spend on more creative tasks that propel the business toward its goals. And critically, every human error costs the business money. According to one alarming report by IBM, erroneous data costs US businesses more than $3.1 trillion annually.
Fortunately, there's a way to save time and eliminate costly human errors in the rent management process - automation. With this in mind, here's how RPA can help with rent management tasks.
- Tenant Rent Income Posting: This bot posts rent income or management fees in the property management system every month.
- Tenant Rent Deposit Reconciliation: Each month, this smart bot posts the Rent Income to both the Tenant and Unit Ledger as a Bank Deposit in the property management system.
- Tenant Rent Check Reader: This smart bot reads the rent check using Optical Character Recognition (OCR) and gathers the data for further use.
Gartner defines vendor management as "A discipline that enables organizations to control costs, drive service excellence and mitigate risks to gain increased value from their vendors throughout the deal life cycle." It sounds a little wordy, but when you break it down, it's about managing your suppliers and everything that entails - managing risks, controlling costs, and facilitating communication and feedback.
Vendor management involves a ton of manual processes that are easily automatable. Here are some of the tasks automation can help with:
- Vendor Catalog Upload: A vendor catalog is a list of goods available from different vendors. This bot retrieves the vendor catalog and adds it to the vendor or property management system at a specified time interval.
- Vendor Bill Payments: Of course, if you buy an item or service from a vendor, you'll need to pay the bill. This bot will open the related spreadsheet, locate the unpaid items, and navigate to the payment website to enter the bills.
- Vendor Certificate of Insurance Tracking: The certificate of insurance is a crucial document for any business working with suppliers. It outlines the insurance policies and limits of coverage for the commercial contract. This bot manages the collection, receipt, and documentation of the vendor certificate of insurance.
- Vendor W9 Tracking: Keeping track of W9 forms is essential in ensuring you're working with reputable businesses. This smart bot manages the collection, receipt, and documentation of vendor W9 forms.
Despite the widespread interest in automation, Accounts Payable departments are still slow on the uptake. However, AP departments are in desperate need of innovation through RPA for several reasons. First, accounts payable teams often receive a high volume of invoices every month, and manually recording, validating, and filing these invoices for auditing purposes is a huge time sink.
To apply even more pressure, AP teams need to process invoices with a high degree of accuracy. A simple mistake or typo could lead to payment delays, cause cash flow problems, and potentially harm relationships with tenants and vendors.
With this in mind, here are some ways RPA can help with accounts payable processes in property management.
- Accounts Payable Invoice Entry: Data entry is one of the most time-intensive aspects of accounts payable, and this smart bot can help. This bot enters multiple (batch) payable invoices in the property management system.
- Accounts Payable Invoice Bill Paying: This Bot reads the vendor invoice using Optical Character Recognition (OCR) and gathers the data for further use. OCR is a critical technology in RPA, vastly improving invoice processing speed.
RPA offers some attractive benefits and ROI for the property management industry as a whole and is especially impactful in accounting. Automating back-office operations like accounts payable, invoicing, and vendor management can help save time and money, both of which are valuable commodities in this uncertain economic climate.
Robotic process automation is the first step in becoming an innovation-centric property management company. And make no mistake, your competitors are either already using, or planning to adopt RPA in the near future, so you should be too.
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