Automation, integration can pay dividends for utility billing

As recently as 10 years ago, hard-wired buildings and DOS-dependent computers represented multifamily property utility billing technology's state of the art. Data collection was slow, the wiring was vulnerable to inadvertent slicing, and proprietary utility billing software made it difficult for clients to change their billing service provider. Over the subsequent decade, utility usage data gathering and transmission became faster and more reliable, as hard-wiring gave way to wireless technology. Wireless enabled utility billing service providers to provide much more reliable service; ironically the elimination of proprietary software made it easier for multifamily companies to switch utility billing providers. But the technology evolution wasn't complete: billing service companies still had to create utility tracking files and send them to their clients, who filled in the resident information and returned them. This involved time-consuming manual processing of invoices, cost allocation calculations, and resident billing, with interfaces required to transfer data between billing systems and resident information databases. Today, in a difficult economic environment, multifamily property managers want to maximize efficiency and minimize technology vendors, software and IT costs. Many are considering the benefits that might be gained from full-business solutions that consolidate multiple business functions, including utility billing, into a core property management and accounting platform, with little or no interfacing. In recent years the multifamily industry's march toward complete, single-platform integration has encompassed processes such as rent payments and check processing, invoice processing, supply and services procurement - and now utility billing, as property managers facing increasing cash flow and bottom-line pressures seek new ways to maximize recovery of their utility costs. Centralization grows NOI A number of multifamily managers are adopting integrated utility management solutions that automate the utility billing process. Automated utility billing processes encompass all elements of utility billing management - invoice processing, meter reading, consumption analysis, submetering and ratio utility billing system (RUBS), online payments, and vacant unit cost recovery. System integration and automation can improve cost recovery, thereby increasing net operating income and property value, with accurate calculations of utility consumption and direct billings to residents. By integrating utility usage information with existing resident, unit, occupancy and square footage information in a central property management database, multifamily property managers can increase control over their utility billing cycle and collection success rate. "By using one platform for property management and utility billing, we don't have to pull up a property ledger and a utility ledger, merge them, and figure out what a resident owes. We save at least 30 hours of staff time and $4,500 monthly at one of our communities for bill processing, report preparation, and other tasks," said Dan Gavin, vice president of Cirrus Asset Management Inc. in Calabasas, Calif. Integrated utility billing services and technologies combine automation, paperless processing, and resident self-service technology. The payables reside in the property manager's centralized accounting system, along with scanned images of the invoices. They can be auto-approved and ready for immediate payment to the utility companies by check or ACH, helping property managers avoid utility shutoffs or fees for late payments. Submetering, RUBS converged with resident billing An integrated billing system measures consumption by submetering and/or RUBS. The system then auto-calculates resident utility charges and calculates individual resident utility charges. Convergent bills, key to ensuring timely utility payment, are auto-generated and sent electronically or by hard mail, or are made available via a portal. Residents' payments are collected and processed either online through the resident portal or by check-scanning automation for bills paid by check. All measurements, allocations, calculations and processing are performed directly in the central database, so no data transfer is required. Convergent billing payments are processed once, eliminating third-party processing, reducing overhead costs, and maximizing cash flow with faster payments. Paperless invoice processing and payments also promote sustainability initiatives while reducing paper handling and postage costs. "The benefit from an integrated solution comes from letting site managers spend more time on their core leasing and property management functions rather than on collecting utility payments," said Missy Castaneda, regional manager for Sumner, Wash.-based residential property manager Investco Financial Corporation. "Another great advantage is automated calculation of move-out charges. This helps us make sure departing residents make their final payments when they move out." Early warning of problems By leveraging integrated utility data with resident data in the property management system, the resulting automation provides early warning for such potentially costly abnormalities as spikes in usage, leaks or broken meters. The system captures anomalous data and sends automated e-mail notifications to property managers. Such integration also makes utility usage trends accessible to property managers by generating utility consumption graphs. This information is instantly available at the manager's fingertips, with no interfaces needed because resident and utility system data are in one place rather than on multiple platforms. Other potential features of utility billing systems are 24/7 call centers from which residents can obtain assistance on utility questions or problems by phone or e-mail. Convergent billing isn't new to the multifamily marketplace; its widespread adoption is still developing. However, integration into one platform of property operations, accounting and utility management is much newer. Final bills can be generated in real time, avoiding delays of up to three weeks for departing residents and improving managers' chance of collecting the money owed. In the current economic climate, residential property managers may wish to consider the potential benefits available from utilizing billing services that completely integrate with their property management systems.2 Joel Nelson is senior writer, marketing for Yardi Systems Inc., Santa Barbara, Calif.