Introduction
Client Profile – The client is a property management and real estate investment company based in Arizona, USA. They specialize in acquiring and renovating underperforming multifamily properties and managing a portfolio of value-add units.
Challenges Faced by the Client
The client struggled with inefficiencies in managing their Accounts Receivable (AR) and property operations. The absence of a dedicated person to audit AR, closing monthly books in OneSite, and coordinating with Property Managers led to various operational challenges
Challenges and Solutions
Tenants Not Properly Charged for Utilities
- Issue: Property Managers missed transferring utility bills to tenants.
- Impact: Utility costs impacted profits and caused inaccurate AR aging reports.
- Solution: We billed tenants for missed utilities and updated accounts monthly until transfers were complete.
High Delinquency Rates
- Issue: Difficulty collecting rent led to high delinquencies.
- Impact: Cash flow disruptions and increased administrative burden.
- Solution: Enforced daily tenant follow-ups and tracked progress in the system.
Lease Document Discrepancies
- Issue: Mismatches between lease terms and software entries.
- Impact: Financial errors and operational inefficiencies.
- Solution: Audited leases, corrected discrepancies, and ensured accuracy in records.
Unreconciled Tenant Accounts
- Issue: AR, prepayments, and security deposits didn’t match the GL.
- Impact: Inaccurate balances and potential tenant disputes.
- Solution: Reviewed GLs, corrected manual transactions, and advised against manual postings.
Delayed Security Deposit Claims
- Issue: Pending insurance claim filings.
- Impact: Cash flow issues and administrative backlog.
- Solution: Conducted an audit, prioritized urgent claims, and streamlined the filing process.
Undocumented Tenant Concessions
- Issue: Concessions were granted without proper proof.
- Impact: Financial discrepancies and risk of misuse.
- Solution: Implemented retroactive forms, established an approval workflow, and standardized concession documentation.
Results
Accurate Utility Billing
Tenants are now billed correctly for utilities, improving cash flow and AR accuracy.
Improved Delinquency Management
Delinquency levels have decreased, with Property Managers consistently updating tenant follow-ups.
Alignment of Lease Documents and Software
Lease records are now fully aligned, with discrepancies identified and corrected promptly.
Reconciled Tenant Accounts
Tenant AR, prepayments, and security deposit balances now reconcile accurately with the GL.
Timely Filing of Security Deposit Insurance Claims
Claims are submitted within required timelines, ensuring recoveries are realized on time.
Proper Documentation of Concessions
Concession forms are prepared and authorized according to standardized protocols, reducing the risk of financial discrepancies.
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