While community associations are generally not-for-profit entities, there’s no reason why they shouldn’t be treated like any other business.

Think of the daily challenges that association boards and property management firms must address. Paying bills. Meeting payrolls. Budgeting. Making repairs to assets on the property. Dealing with delinquencies. Initiating foreclosure proceedings.

Add to the equation that directors and property managers are charged with preserving the property values of their constituents’ most valuable asset – their homes.

Managing a community association is a large undertaking whether it is self-managed or run by a professional organization. Regardless, associations often cite cash flow and collections as some of the most challenging issues they face on a regular basis. One major reason is that many don’t have disciplined processes in place to accomplish these important tasks.

There are available solutions and payment systems that are used by associations and businesses to automate these tasks. These systems can essentially fulfill all the functions related to billing and accounts receivable. Once implemented these programs free up finance departments of the tedious and frustrating tasks of collecting outstanding bills and invoices. The results are clear: Associations which use these systems have improved cash flow, fewer delinquencies, and an enhanced ability to build up reserves for emergencies.

Whether it’s an association with 10 units or 1,000, maintaining cash flow is perhaps the most widespread problem facing boards and managers. A recent study indicated that approximately 70 percent of community associations are under-funded and don’t have sufficient funds to pay for major projects or repairs. This situation frequently results in special assessments and anger among homeowners who may not have it in their budgets.

The key advantage of these automated payment systems is that they professionalize and automate accounts receivable with predictable, convenient, and consistent processes. Many finance departments have referred to these systems as their “automated billing attendant”.

Let’s take a look at some of the advantages:

1. Invoices are presented on a timely, professional basis. There are instructions with how to pay with one click or text, and clear explanations of due dates and penalties for late payments. The proper and timely presentation of invoices gives homeowners the impression that the financial health of the Association is a priority, as it should be.

2. These systems can also be programmed to address past-due accounts and delinquencies with customized texts, emails, and phone calls reminding homeowners of past due amounts and providing a one-click or text solution to make an immediate payment.

3. A major benefit is that these automated payment systems offer a variety of payment methods to make it easy and convenient for the homeowner such as credit and debit cards, electronic checks and ACH, and even cash payments. They can also enable automatic billing to a designated account on specific dates or custom schedules to eliminate delinquencies altogether.

Another advantage is that these programs take all of the guesswork out of who paid and who didn’t since they keep accurate logs of each unit’s payment history.

Consider the following, as well:

  • Seamless integration with popular accounting software
  • Variety of convenient payment options including credit, debit, ACH and cash
  • Payments can be made over the phone, online, via SMS or mobile app, or in person
  • Clients can securely pay with one click or text

By centralizing and automating all bill presentment, reminders, collections, reconciliation, and payment history, these systems also eliminate the potential for human. There are no lost invoices or records of payments. Issues related to duplicate or missing entries are a thing of the past.

There’s no secret that making the dreaded collection call is an emotionally draining experience for those in the association’s or property manager’s offices. It’s something no one wants to do simply because of the unpleasant nature of the task. Spending time making collection calls also takes away from the many other tasks these employees are charged with completing. In some instances automated payments systems can also reduce operational overhead.

The automated process also puts in place a system where “cronyism” can become a thing of the past. There are no favors granted to friends of board members when it comes to paying assessments and dues. Everyone is subjected to the same rules: the ones owners agreed to when purchasing a unit or home.

While cash flow will always be a challenge for businesses and associations, the new technology offered by automated payment systems can provide effective solutions.