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PayLease Property Talk: Choosing the Right Provider

As most property managers know, utilities are one of the largest multifamily operating expenses. Recouping these costs from residents is the best way to protect and increase Net Operating Income (NOI). However, the process of recouping utility costs in-house while staying compliant with all state, local, and utility regulations is time consuming for multifamily property managers. So to stay in compliance while efficiently maximizing utility recoupment efforts, many property management companies utilize a third-party utility billing company. But many billing programs hide fees and complexities that end up costing multifamily companies thousands of dollars a year. Choosing the right provider is tricky. If you want to implement a resident billing program at your communities, make sure you understand the types of vendors out there and the top considerations for selecting a billing partner.

Contact PayLease to Receive Your Custom Resident Billing ROI Analysis

How To Choose the Right Billing Partner

In our last video, Your Best Billing Strategy, we talked about the different billing strategies property managers are currently using to recoup costs. But whether you’re interested in using a RUBS method or submetering program, you have to find the right partner to ensure you’re billing your residents punctually and accurately.

There are two types of vendors you would work with if you’re thinking about implementing a billing program:

  • Read-Bill-Collect (commonly referred to as RBC) Vendors
  • Full Service Partner that provides a single, itemized monthly statements


First, let’s take a look at how property managers work with RBC Vendors to implement their programs:

  1. RBC Vendors calculate and bill the resident directly.
  2. The residents pay the RBC vendor.
  3. Then the RBC vendor reimburses you.

Now let’s get into the good, the bad, and the ugly regarding this model.

The Good

Outsourcing utility recoupment frees up your staff to focus on running your business.

The Bad

From the resident’s point of view, residents are receiving multiple bills, which is confusing. There’s one from you with the rent, pet fees, etc. and one from the RBC vendor with the utilities. They also don’t understand where the bill is coming from or who they should contact if they have questions or issues.

The Ugly

From the property manager’s point of view, it slows down your cash flow because the RBC vendor has to first collect the money before reimbursing you. If residents don’t pay that bill, there’s no easy resolution, because you now have a middle man with all of the specific billing information, but no support center. On top of that, any late fees go directly to the RBC vendor – they benefit, although the burden is on you.

All in all, RBC Vendors are great in theory, but there are too many variables and potential pitfalls that turn what was supposed to be an easy solution into a nightmare.

The Solution: Resident Billing Programs

What most property managers are moving towards is a Full Service Partner that offers comprehensive itemized resident statements. Let’s talk about what that actually means.

A full-service partner works with you to figure out the best way to bill based on regulations in your area. They perform utility calculations, and pull all the open charges from the resident ledger including rent, trash, pet fees, etc. and generate a single bill which is then sent directly to your residents.

Now, doesn’t that sound like a dream?

Your residents get one bill, that’s itemized and clear, and coming from you. If they have any questions they can contact you or your billing partner directly. Your dollars flow straight to you, no intermediaries. If someone doesn’t pay, you have several recourse options available.

As an added benefit, studies have shown when using convergent billing it can increase the online payment utilization rate by up to 30%.

To sum it up nicely, you want a full-service partner who is with you every step of the way.

Now, this is the point in the series that we would typically tell you that the PayLease Resident Billing solution is the best on the market, and how we provide you with customized statements, seamless integration with your software, legal and regulatory support, a dedicated onboarding team to make implementation a breeze, continual training throughout the length of our partnership, etc.

But this is an educational series, so we won’t tell you about our full suite of products, our 5,500 happy clients, 98% client retention rate, or 30+ industry awards.

All we’ll say is that PayLease would be happy to offer a free consultation to create a custom analysis to predict our impact on your NOI.

Contact PayLease today for your custom analysis and complimentary ROI report.


Keep Reading! We’ve handpicked a few more articles you might be interested in:

Ebook: Multifamily Utility Bill-and-Collect Schemes Exposed

Blog: As Multifamily Rents Begin to Flatten, It’s Time to Look at Utility Expenses

Podcast: Starting a Utility Billing Program

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