Accepting monthly rents in cash is a stressful recurring task for many property managers. Even though having the funds in hand alleviates your most immediate problem, cash comes with responsibility and quite a bit of risk. Collecting the tender from residents, keeping it under lock and key, and then getting to the bank to deposit it can cause whole host of issues—even if you are a seasoned pro.
For many property managers, this is a recurring theme every month that’s accepted as an unavoidable cost of doing business. Still, if a large number of your residents pay their rents in cash, it can tarnish your bottom line drastically when left unchecked.
Recently, Buildium announced an integration with PayNearMe to solve for this challenge—allowing property managers to accept cash without touching a cent. That said you may still wonder the degree it’s affecting your own business. Here are the top 4 reasons why accepting cash from residents can be associated with hidden costs that impact your profitability.
The hidden costs of accepting cash: #1
How many times have you heard that “the check is in the mail”? Even if the check was sent, there is always the chance that it will bounce due to insufficient funds when processed.
All the while, this delay in getting current financial information could be the last straw before an eviction process begins. If this sounds familiar and you are dealing with a difficult resident, you’ll most likely want to resolve the situation as quickly as possible without any additional hurdles that can cause you and your owners even more strife.
The hidden costs of accepting cash: #2
Real liability and risk
Rent payments can add up fast—and if you are accepting multiple payments at once, it’s not uncommon to accumulate large sums of cash. Carrying a heavy purse each month to the bank can cause your team a huge amount of agita.
Plus, when that much cash is handled it’s also easy to miscount, misplace or even experience theft. Many property managers have mentioned that they drive around to pick up cash payments, which puts their safety at risk. You might also be subject to fraud, especially related to wire transfers.
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The hidden costs of accepting cash: #3
Lack of accuracy
Another issue comes up related to accuracy. If you are using property management software, you already understand the benefits of automating your processes to save time, avoid operator error, and reconcile bank accounts. When you receive cash, you’ll have to manually enter it into the system and that opens you up to errors.
The hidden costs of accepting cash: #4
The efficiency ripple effect
The effort it takes to chase down residents for rent and then deposit the money will cost you the most valuable asset of all: time. Many property managers claim that their offices transform into Grand Central Station on the first of the month, which can no doubt frazzle the staff and cause undue inefficiencies.
When your resources are literally spent, it’s difficult to devote time to other mission-critical priorities like delivering exceptional customer service and growing your portfolio. In today’s competitive landscape, a certain amount of portfolio loss is expected and you can’t afford to neglect your residents and owners.
Technology to the rescue
The good news is that there are software solutions built to help you. In fact, Buildium’s integration with PayNearMe gives property managers a convenient way to accept cash through 20,000+ retail partners in 48 states, then see the transaction automatically reflect in the related Buildium account within 5 days.
Regardless of what software you use, the best way to accept cash is to let a 3rd party manage the transactions for you—then you don’t have to deal with the risk and inefficiencies that can weigh down your business. It is possible to get to collecting 100% of payments electronically when you use other services like ACH and ePay.
Technology should empower you to focus on what matters most to your success. After all, you’re not running a bank and it doesn’t have to feel like it.