5 Reasons Why Multifamily and CRE Companies Should Get off the Fence and Automate Their AP
Before the COVID pandemic forced office shutdowns, processing invoices manually and cutting paper checks was a feasible, although inefficient and labor-intensive way to manage Accounts Payable. That all changed when it became difficult, and in some cases impossible, to head into the office.
Real estate companies of all sizes had no choice but to automate in order to process and pay hundreds or even thousands of invoices each month. Now, as remote work appears to be here to stay, Accounts Payable invoice automation is becoming an unsung hero.
Accounts Payable invoice automation allows high productivity, while saving time and money. Companies don’t need fully staffed teams – in headquarters or out-in-the-field – to process invoices, make purchases, and pay vendors. They can do it with far less manpower.
With these benefits in mind, if you are sitting on the fence about AP automation, here’s five reasons why you should take the next step immediately:
1) Cut invoice processing time and labor in half
Invoice capture is one of the most labor-intensive AP tasks. Accounts Payable invoice automation software can cut invoice capture time in half. An AP team can receive, capture, and upload the invoices to the AP automation software. If they are using an automated platform like Nexus, the AP team can let suppliers do most of the initial legwork.
With a self-service portal, suppliers can upload their invoices, code them, and send them directly to the client’s Nexus account. The AP team can then verify the coding and review the invoice. Invoices can also be sent through e-invoice for processing.
Because there is far less paper shuffling, Nexus customers report that they have been able to reduce their time on invoice capture by 50 percent and are able do the work with 50 percent fewer FTEs.
Per VP Controller, “The admins are not opening envelopes, doing the data entry into the GL and coding. Nexus has reduced duplication of duties.”
2) Speed up Invoice Review and Approvals
With most AP automation systems, invoices are centralized and stored in one place. Every action taken: when the invoice was received, who approved it, and when it was paid, is tracked. This helps keep everything organized and speeds up review and approvals.
With Nexus, invoice approval workflows can be configured for any CRE and multifamily company requirement. For example, different sets of eyes can review invoices that are over budget, or belong to a specific region, or are associated with a different GL or contract.
Moreover, invoice approval workflows can be updated as new properties are added or employees change. Invoices already in flight can even be rerouted in real time.
Nexus customers say that automated routing cuts back on the time needed to manage invoice reviews and approvals by 50 percent.
“The accountants can approve a batch of invoices much easier and there is so much more transparency. We know how long each person has been in the approval queue and who approved what, when. I can't imagine if we had been on paper during this past year.” (VP Controller, Cust E)
3) Eliminate Payment Inquiries with Self-Service Supplier Portals
Supplier self-service portals can significantly reduce the volume of calls AP teams and property managers field from suppliers inquiring about, “When can I expect my payment?” or “Did you receive my invoice?” Suppliers can get those answers 24/7 from the portal. They can see the payment status of every invoice. They can also view when payment was received and by which payment method.
With Nexus’s self-service portal, NexusConnect, suppliers can use one set of login credentials to check on invoices and payments for multiple clients that use Nexus software to manage AP – saving even more time and further reducing call volumes.
A recent market research study indicated that Nexus’s self-service portal shaves 75 percent off the time customer’s spend communicating with vendors.
4) Reduce Payments Time and Cost
Obtaining check approvals, printing checks, stuffing the checks in envelopes, and putting them in the mail also consumes a big chunk of the AP team’s time. Automated payments software changes all that. Teams no longer have to run down the hall looking for an approver’s signature or cut a paper check.
Everything can be handled with clicks. An AP manager simply sends invoices ready for payment directly from the GL to the payments software. A CFO, controller, or another designated approver is notified automatically and approves the invoices for immediate payment.
The payments company then will initiate payments to suppliers – often via electronic payment methods such as ACH or virtual card (a card that is sent via email and is processed like a credit card.) Both methods are significantly faster and more secure than checks.
The benefits? Huge time and cost savings. With Nexus, that electronic process shaves 50 percent off time spent processing AP payments. It also eliminates about 40 percent of the materials cost for check forms, printer ink, postage, envelopes, etc.
5) Reduce Procurement Process Time and Paper Shuffling
Using Accounts Payable invoice automation, time spent purchasing supplies can also be reduced and managed with fewer employees.
Some AP automation software have electronic Purchase Order (PO) functionality to help companies meet spending guidelines.
With Nexus, property management teams, maintenance crews, and procurement simply create the PO, often from a template, and it’s routed automatically to the appropriate approvers – who can take action in the AP software.
The PO can be matched to the invoice once it’s received (two-way match) as well as to the receipt (for a three-way match).
“The PO system provided the biggest immediate impact of using Nexus. I can't understand why anyone would not use Nexus PO. The accountants no longer work with multiple spreadsheets for each property and there is accountability and oversight over the purchasing process.” (IT Consultant, Cust I)
Nexus customers report that they have saved on average 70 percent of their time managing procurement, and no longer have to create after-the-fact paper POs.
Nexus further simplified the PO process by creating an online procurement catalog that property managers and maintenance staff can use to purchase supplies. The catalog uses the prices the customer has previously negotiated with the supplier – so everyone making purchases benefits from the lower prices.
AP and Payments Automation Helps CREs and Multifamily Companies Manage Uncertainty
Real estate companies of all sizes are rethinking their Accounts Payable processes. They know that many employees want the flexibility of working from home, and that counting on a fully staffed team – from property managers to maintenance workers to AP clerks – may not be realistic in today’s world.
The solution is automating invoice processing, payments, and procurement. Not only will it save time and reduce cost, it also helps them manage with fewer head count.
Even if they remain fully staffed, jettisoning paper processes will free up teams to spend their time on more strategic processes.