5 Tips to Help Real Estate Companies Find the Right Payments Vendor for Them
Blog / AP Payments
April 13, 2022
While consumers are quickly adopting digital payment technologies – everything from Venmo to PayPal – real estate companies are moving a lot slower. Often, it’s not fear or technology that’s holding them back, it’s the noise that exists within the B2B digital payments landscape. There are so many conflicting messages and strategies.
So, how can businesses - real estate companies in particular – navigate through all this noise, when they don’t have PhD’s in payment technologies? Here are 5 tips to wade through the noisemakers.
Tip 1) Ensure No Manual Uploads Are Needed
Many virtual payments programs market a fully integrated and automated solution that eliminates all manual intervention, but that’s not what happens in practice.
- File downloads and uploads may be required when preparing the payment file or issuing payments. ●
- Supplier information updates such as address changes and payment election modifications may also not transfer back to your existing accounting or enter-prise resource planning (ERP) system.
These scenarios introduce the opportunity for human error. Fraud is also possible.
The electronic payment application you select should automatically process payments after the payment file is submitted – without any intervention. It should also sync all data back to your existing accounts payable (AP) software and other business applications.
Tip 2) Payment Status Should Be Visible 24/7
The payments solution should also deliver complete visibility on payments as they move through your systems. You should know when a payment is open, pending, and sent. You should also be able to view the payment method for each supplier – check, ACH, and Virtual Card. This information should be sent to your ERP/GL for visibility during payment processing. Not only should your internal teams have this information at their fingertips, but suppliers should have access to this data - including real time payment statuses and reference numbers - as well.
Tip 3) Suppliers Shouldn’t Be Forced into a Payment Method
Some e-payments vendors tout that one payment type will suit all suppliers. Others go so far as forcing suppliers to accept the payment method they themselves prefer. These indicate the provider does not understand the critical importance of the client-supplier relationship.
Real estate suppliers range from small, single unit proprietorships to large enter-prises – and have different payment processing needs and capabilities. For example, large suppliers might be able to accept all electronic payment types, ACH and Virtual Cards, but smaller local operators may not be able to accept Virtual Cards because they don’t have point of sale terminals on which to process them. A good payments provider will work with suppliers of all sizes to find alternatives to costly check writing.
Moreover, an ideal payments provider will offer payment options that suit your overarching goal, whether that be:
- Replacing manual check handling
- Generating rebates via e-payments
- Mitigating risk of fraud
Tip 4) Supplier Onboarding Should Be Customized
In the 2016 AFP Electronic Payments Survey, 76 percent of respondents cited difficulty convincing suppliers to accept electronic payments as a barrier. However, the right payments provider can get suppliers on board with a customized approach that considers your needs, as well as those of your suppliers.
For example, an ideal payments provider will:
- Promote the benefits of alternative payment methods to checks, including faster payment receipt and greater visibility into payment status.
- Reach out to all suppliers, not simply those with whom you spend the most (in many cases, payments providers only seek out high-value suppliers who they think will generate the highest Virtual Card processing fees).
- Communicate on a rolling basis to engage new suppliers as some providers can only commit to performing one, short-term supplier acceptance push.
- Provide a designated campaign manager or supplier services team.
After consulting with you to develop a tailored onboarding strategy, an ideal provid-er will provide continuous consultative services to you including reporting, insights, and program analysis to ensure maximum adoption over time. On the supplier side, the provider should be equipped to address objections to virtual payments and perform post onboarding supplier support. Having an appointed champion for your payments initiative can prove key to achieving your desired results.
Tip 5) Don’t Get Misled by Higher Rebates
Rebate potential might be the most commonly cited benefit of supplanting paper checks with electronic payments, and specifically Virtual Cards. The higher the payment volume on Virtual Cards, the higher the cash rebates. However, the very fact that each provider produces different rebate estimates should tell you there is no singular, definitive formula upon which you can rely to generate these cash back figures.
An exemplary provider will be willing to share their analysis of your supplier list and the breakdown of those they anticipate will accept Virtual Cards. They should show you:
- Which payments are ineligible, such as mortgage payments, insurance payments, and other tax or governmental payments.
- How much supplier adoption is realistic amongst those remaining suppliers that are included in your likely rebate totals.
Simply because a supplier has accepted Virtual Card payments before and is there-fore part of your theoretical highly likely match doesn’t mean they will accept Virtual Cards through you. Your payments provider should be willing to work with you on developing a convincing supplier value proposition to increase the likelihood of successful supplier conversion.
While real estate companies may need to parse through the chatter from a plethora of payments providers, there are compelling reasons to shift towards e-payments. Automated payments are cheaper, more efficient, accurate, and secure. They can also provide suppliers with greater visibility and shorter service-to-cash times. When real estate companies take into consideration the 5 tips mentioned above, they will have a better understanding of their options and what’s right for them.