Business growth needs to be carefully managed – and for many property management firms, the more properties in the portfolio, the slower business processes become as a result of the amount of documentation being processed. Approval processes may already be lengthy, with invoices touching a number of people before being signed off, and some companies may find they need a form of transport to move invoices around.
From the use of the incorrect expense codes to the invoice black hole, the lack of document control and visibility can compromise essential communication with key clients such as private investors, local authorities, and top-performing UK property funds. Furthermore, it can take firms ages to locate paper based lease information required to respond to tenant queries, a clear waste of resource.
Given the overhead associated with essential operational processes, especially within finance, how can property management companies ensure portfolio expansion can be achieved without adding untenable cost?
In an uncertain market, efficiency becomes a top priority. From providing investors with confidence to gaining a good reputation with tenants, the speed and accuracy of information processing and communication is critical. Yet given the volume of paperwork generated by day to day property management – from maintenance agreements to copy invoices, insurance and utilities documents and copy leases, as well as correspondence from leaseholders and legal documents relating to the sale and purchase of properties and the original leases – it is easy to become mired in inefficient manual processes.
Spending hours searching for a copy lease to respond to a tenant query or manually searching for, collating and reconciling all end of year invoices in order to accurately create tenants’ service charges, is time that could and should be spent on more productive, added value tasks. Even more concerning for many property management companies is the lack of control over the invoice management process, leading both to excessive management overhead and mistakes.
With invoices requiring approval from a range of different people, often geographically dispersed, as well as different approval levels depending on value, the time taken to route invoices around the business by a variety of means including internal mail and the post can be fragmented and incredibly inefficient. However, by far the biggest issue is missing invoices, with one firm confirming that when using a manual process around 5% of all invoices were going into a black hole.
With the lack of an audit trail, visibility of the invoice approval process was inexact and if there was a hold up somewhere along the line, the absence of any notification often led accounts to assume the invoice was lost and request a copy, sometimes up to four or five copies of each invoice. With firms processing in excess of 100,000 invoices annually, the business implications of this lack of visibility and control are significant.
Fast & Accurate
Adopting an electronic document management system (eDM) can transform day to day operations. With all documents, from leases to bank statements and invoices, scanned and stored within the system – alongside any documents that arrive in electronic format – the company has both complete information visibility and complete confidence that important information is always retained and available whenever required.
With individuals empowered to know everything that’s going on with their invoices, firms can not only streamline the payment process but every aspect of the invoice process. Staff can use strong search functionality to immediately locate the required information to resolve tenant queries or check supplier invoices. For example, if a tenant has a query, a simple search for the supplier name or flat number and block will bring up all related documents.
The speed of this process delivers significant time savings and as a result of staff no longer spending time producing information, they are able to interpret and analyse data and provide for more management information. The eDM enabled process also delivers benefits to clients by making it easy to retrieve and email client statements at the touch of a button.
Room For Expansion
In addition to improving staff productivity, the reduction of paper from the organisation delivers immediate cost savings by reducing storage requirements. Expensive office space previously used to house documents can be freed up to accommodate additional staff; while firms also remove the need to transport invoices across the organisation for authorisation and approval.
This ability to eradicate complex, costly and risky document transport across the business becomes ever more critical as firms add to the property portfolio. For example, at Metrus, one of London’s leading independent property advisors, the expansion in property numbers created a need for Centre Managers at the properties to view invoices which were faxed or sent by post. Adopting eDM enabled the company to use a workflow solution which ensures that when invoices arrive they are automatically sent onto the relevant people at a particular building for approval.
At Lambert Smith Hampton, a commercial property consultancy focusing on the UK and Irish commercial property markets, the use of web approval and coding modules further streamline the process, allowing people to access and approve invoices at any time and from anywhere. Using a matrix to define workflows ensures those staff with the requisite authority can approve invoices; while individuals can also only use the expense codes relevant to each property, avoiding errors.
For the finance team, the visibility offered by eDM delivers a new level of accountability. As Lambert Smith Hampton discovered, it is easy to identify the individual responsible for any part of the process in the approvals chain and any weak links are quickly revealed. With this improved knowledge, individuals within the finance team are empowered to make informed decisions.
As a result, firms such as Metrus are continually thinking of new ways to explore eDM. Management Surveyors are already using the system to gain access to critical information such as leases, while it could also be used within the HR department for holiday forms, which are currently routed around the business and signed off via paper forms.
Critically, by streamlining processes and providing staff across the business with immediate access to the complete information resources relating to each property, firms not only achieve the efficiency required to reduce operational costs in an uncertain economy but also gain the ability to manage far more properties without investing in additional staff.