Ever tried running a marathon in a fancy pair of dress shoes? They’re technically shoes, yes, but not built for the terrain, the pace, or the pressure. It’s a rough run, unlikely to end in a win.
That’s what it can feel like using a one-size-fits-all AP automation tool in real estate. You want to process invoices and issue payments fast, but without the right gear, performance can suffer, and results are lackluster. Choose well, however, and you can quickly gain ground.
Here’s what to look for in an AP automation solution to make it the right fit for all the vendors, invoices, payments, and workflows you’re juggling across your real estate portfolio.
1. Lets You Navigate Your Most Complex Invoice Challenges
Any AP automation solution will let you centralize invoices in one system, receive invoices through various channels like email and online portal, and route invoices for approval through various workflows. But there are often nuances to managing invoices in real estate companies because of the varying types of invoices you process and the array of suppliers you deal with.
Because of this, you need an AP automation tool that can accommodate the specific ways your business handles invoices and find efficiencies while doing so.
Here are a few examples of where a real estate-focused AP Automation solution can improve speed and accuracy.
- Improves visibility on utility invoices: Every AP manager in real estate knows that invoices for utilities (electricity, natural gas, water, and sewer) need to be paid as soon as possible, or you risk having services shut off. That can lead to very unhappy tenants.
At the same time, it can be challenging for invoice approvers to process these invoices promptly since they require specific information to be on them, such as account number, meter number, and cycle dates. Many AP automation solutions may offer no way to meaningfully improve the processing of utility invoices, or ensure the right info is on them.
If your chosen AP automation solution allows you to store your utility vendors and all their associated information in the same system as your invoices, you can add these details to those invoices with the click of a button. Invoice approvers will have all the information they need to quickly and efficiently handle those invoices - without the back and forth.
- Saves time on recurring expenses/invoices: If you regularly use Acme Lawncare for landscaping at your Main St. property, and their invoices are similar from job to job, it’s fair to think you could process those invoices faster. After all, most of that vendor’s information is in your system, and the invoices are nearly identical.
Some AP automation solutions can let you do this by using recurring invoice templates.
Once these templates are set up, processing invoices for all vendors you regularly use can be a breeze. Whenever Acme Lawncare performs work and sends you the bill, you can simply log in to your AP automation tool and bring up the Acme invoice template. The fields of the invoice will be automatically pre-populated with most (if not all) of the details you need, like Acme’s company info, the Main St. building’s address, and the typical mowing and mulching they provide.
For any non-standard services Acme performed on their latest visit, like planting bushes, you can simply add any variable fields, like invoice date, invoice number, and so on. Once the invoice is all set, it’s sent for approval(s) through your regular workflows.
With no additional invoice ingestion work and just a few keystrokes, you’d be able to enter and approve your recurring invoices for Acme (or any vendor) more quickly.
- Enables all your suppliers to submit invoices electronically – no matter their size: You’re likely working with everyone from SMBs to enterprise vendors. You want to bring them along on your AP automation journey so they can enjoy faster invoice approvals and, ultimately, speedier payments. One of the best routes to get there is by enabling vendors to submit invoices online and perform some of the coding work up front so they can avoid mail lag times and manual data entry slowdowns. But be aware: vendors may vary in their willingness or ability to switch up current processes.
More advanced AP automation solution providers understand the spectrum of suppliers in real estate and offer numerous ways to get their invoices into your AP system.
Larger suppliers with complex tech stacks may wish to submit one or multiple files containing their invoices via application programming interfaces (APIs) using eInvoice. Smaller suppliers, meanwhile, might feel more comfortable submitting a single invoice via an online portal or creating an invoice from scratch in that same portal. With these varied invoice submission options, each vendor will likely find something that allows them to adopt electronic invoicing without issue.
You may need help in one of the areas described above or have several other hyper-specific invoice-related tasks to accomplish. Map out your invoice processing needs in advance of choosing any AP automation solution and ensure the partner you choose offers a way to help you manage those scenarios more efficiently.
2. Gives You Total Control Over User Permissions
There are a slew of stakeholders and employees across your properties with a vested interest in invoices. Some need to know the status of invoices so they can keep their vendors looped in. Others play a part in managing invoices themselves, whether that’s coding, indexing, reviewing, clarifying, and/or approving them. This complexity calls for an AP automation tool that can let you assign the right permissions to the right people, down to extremely specific responsibilities.
Look for more than just the ability to grant view-only access on invoices, or for the ability to assign invoice deletion rights. Find a solution that lets you manage small but important details, such as changing invoice status, modifying an invoice after approval, updating general ledger (GL) assignments on invoices, and setting priority flags and ‘needed by’ dates.
You may also want to assign users permissions related to other parts of your accounts payable process, such as electronic purchase orders, reporting, and vendor creation and management. When you choose a system that allows you considerable oversight and control of permissions, you can reduce errors, work more efficiently, and even stave off fraud.
3. Offers Centralized Procurement in the Same Tool
Property management companies, Real Estate Investment Trusts (REITs), and multifamily and commercial real estate firms can often negotiate lower prices on goods because of the sheer volume of orders they place with vendors. Vendors often, in turn, provide these real estate buyers with customized catalogs that display not only these preferred rates, but also a pared-down list of pre-approved SKUs and products matching what buyers typically procure.
Once all this work is done, real estate companies understandably want to ensure their internal teams are using these preferred vendors, taking advantage of rates and products offered via catalogs. AP automation solutions built with real estate companies in mind have figured this out and may allow buyers to embed these catalogs directly in the AP solution.
With supplier catalogs available in the same app they’re accustomed to, approved users can search for and select the proper catalog, browse through available items, add items to a shopping cart, and submit their order automatically to the supplier. That makes procurement for real estate companies as easy as ordering through Amazon. Some solutions may even show if the purchase will put that property over budget and then create a purchase order to be approved through the right channel(s) before any expenditure puts you in the red.
If your real estate company is looking for an easier and faster way to set additional controls on your spend – restricting purchasing to a handful of preferred suppliers, limiting who internally can make purchases, etc. – you may wish to steer stakeholders towards an AP automation solution that lets you use online vendor catalogs and electronic purchase orders.
4. Integrates with Your Tech Stack
Of course, AP automation software isn’t the only thing you’ll use to run your business. You also rely on a property management system that allows you to automate administrative and operational tasks for your properties. You’ll need this key tool to integrate seamlessly with your AP automation solution, so you’re not adding data in two places or introducing human error in the AP process.
AP Automation providers with expertise in real estate will offer this, letting you connect your MRI Software, Yardi, RealPage, and other property management systems to their tech.
Be sure to gain a good understanding of what data integrates between the systems (e.g., vendors, budgets and actuals, invoice data, etc.) to guarantee that you’ll always be looking at the correct information.
Also, if you use multiple property management systems or may in the future, or if you’re acquiring new properties, you should validate that you can integrate multiple property management systems in one AP automation account, so you’re only managing one AP system.
You might also rely on other specialty vendors for construction, utility, procurement, and property tax management solutions. There may be opportunities to link these tools with your AP automation solution to reduce friction and give you even greater control in the back office.
Let’s say you use a vendor management tool to automatically collect vendor insurance information. Integrating those validated vendors with your AP automation solution could potentially block invoice approval(s) for any vendor that is out of compliance.
When the solutions you use can “talk” to one another and share relevant data, it can create tremendous efficiencies.
Choose AP Automation Built for Real Estate, Not Just Compatible with It
Real estate accounts payable is no casual jog; it’s a high-stakes, high-volume marathon. Just as you wouldn’t wear dress shoes for race day, you shouldn’t rely on a one-size-fits-all AP automation tool to handle the complex terrain.
If your current solution can’t tackle tough invoice scenarios, enforce granular permissions, centralize procurement, and integrate seamlessly with your tech stack, it’s probably not designed for the realities of your business. When you choose an AP automation solution engineered for real estate, you and your team can run smarter, faster, and farther - with fewer blisters along the way.