Learn the advantages of outsourcing resident utility billing for multifamily operations
People tend to be lax with spending when someone else is picking up the tab. When it comes to utility usage in multifamily communities, the same concept applies.
Not billing residents for their utility consumption, or including it in the price of rent, leads to higher usage—which means you’re paying higher utility expenses. A survey conducted by Fannie Mae found that when owners paid for all energy costs, the median annual energy use was 26% higher than when residents were responsible for paying the energy costs. For this reason, many savvy management companies have turned to resident utility billing solutions to recoup their growing utility costs and promote conservation.
In-house multifamily utility resident billing is tedious
Charging residents for their utility consumption is arguably the most important component of a successful utility management program; however, it’s not the easiest process to handle in-house. For one, understanding the applicable state and local regulations is confusing. It’s tedious for your staff to determine how much each unit owes and produce invoices that detail those charges.
If you are performing resident utility billing in-house, you’ll need someone to handle the following tasks:
- Understand and stay on top of utility billing regulations
- Perform submeter readings (if applicable)
- Calculate monthly charges
- Prepare and deliver comprehensive resident statements
- Track resident utility payments
Over 50% of multifamily firms are outsourcing resident utility billing
Luckily, there’s a way to avoid the headaches associated with the billing process and still recover utility charges from residents. By outsourcing this high-value task to a utility resident billing partner, property management companies save time, stay in compliance with all regulations, and gain valuable insight about usage within their communities.
The benefits of outsourcing resident utility billing are so plentiful that it’s becoming a popular trend among multifamily companies.
What multifamily companies gain from outsourcing utility resident billing
Utility resident billing partners make sure that the cost recovery process is a seamless experience for both residents and apartment operators. If you are considering outsourcing the process, you’ll benefit from its advantages.
Accurate and easy-to-understand resident statements
Your billing partner takes on the responsibility of determining what each resident owes. Some companies find this to be the greatest benefit of working with a resident utility billing partner. Depending on your circumstances, your vendor will perform RUBS calculations or take readings from your submeters.
Once they determine the charges for each unit, they generate individual statements. Each statement will include your residents’ rent, utility charges, and any other applicable monthly fees (trash, parking, pet rent, etc). Each line item is clearly labeled, giving residents complete insight into their monthly charges.
Complete and on-time resident utility and rent payments
This is an unquestionable advantage of using a resident utility billing solution—tenants receive one consolidated statement for all their charges, and pay everything at once. This saves your staff from collecting multiple payments throughout the month. It also benefits cash flow because residents pay for everything when their rent is due.
Peace of mind about regulatory compliance
If you aren’t keeping regular track of regulatory laws, it’s easy to fall out of compliance. Resident utility billing partners have a dedicated team of regulatory experts who actively monitor these laws. When you begin your utility management program, they’ll advise you of the billing structure you need to adhere to—and if there are regulatory updates, they inform you right away so you can act accordingly.
Renters sometimes have questions about their utility charges. Or they might need assistance with making a payment. Instead of taking up their community manager’s time, your resident utility billing partner can help. Most offer 24/7 assistance dedicated to helping your tenants. Help isn’t limited to residents, either. Resident utility billing partners also offer comprehensive support for community staff, too.
Better visibility into utility data
A billing partner will also regularly provide business intelligence tools about utility usage, recoupment rates, trends, and potential leaks. This is a big deal. When you have access to this data—in a clear and easy-to-understand format—you can use the information in a variety of ways. For instance, you can discover and fix any anomalies that require maintenance. It also helps you benchmark your portfolio’s utility performance to install retrofits or qualify for green loans.
Zego (powered by Global Payments) integrates seamlessly with Rent Manager and is a proven resource for thousands of multifamily communities across the country. Increase operational efficiency, promote conservation, and gain insight into your portfolio’s performance through business intelligence provided by Zego’s utility management program.
Contact Zego to Receive Your Custom Resident Billing ROI Analysis