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6 Ways to Control Multifamily Expenses From Source to Pay

According to NAA statistics from 2022’s operating statements of 9,263 rental homes with five or more units, owners of multifamily homes earn only 7 cents per dollar in rent. Since the rising cost of living is affecting residents just as much as owners, increasing rent isn’t the only solution. The owners must instead concentrate on using technology to get more control over operating expenses.

An 2023 National Apartment Association (NAA) article and informationgraphic demonstrate the huge financial challenges that multifamily owners have to confront. According to NAA it is estimated that for each dollar of rent, owners of multifamily properties make a profit of just 7 cents. Their research is taken from 2022 operating records from 9,263 rental homes with 5 or more apartments secured loans from Freddie Mac CMBS. Illinois, New York and Wisconsin owners make a greater average profit of $9 cents per $1 of rental but the margin remains very small.

With rising costs directly affecting the residents, as well as the owners, increasing rent isn’t always the best option. Instead, owners should concentrate on using technology to get greater control of their operating costs. The solution isn’t procurement-to-pay but they do not cover the whole purchase process.

The future of spending management is source-to-pay. It’s the most effective method of reducing operating costs, reducing expenditures and boosting NOI with centralization and automated processes throughout the entire buying process. Multifamily experts from RealPage (r) recommend using a source-to pay solution which can assist you with the following ways.

1. Plan a buyer journey that is strategic

A successful buyer journey begins by centralizing and integrating the entire purchasing, invoicing and engagement with vendors from sourcing to procurement until payment. It must also provide timely information across your entire multifamily portfolio.

Automation and centralization can allow you to:

  • Manage vendors more effectively, including vendor credentialing
  • Maximize purchasing power
  • Make sure that property spending is under control
  • Keep up with the latest real-time data-driven insight

2. Improve the purchasing, procurement and efficiency in the invoice process

Enhancing the procurement, purchasing and invoice efficiency is much simpler with the implementation of an end-to -end purchase and procurement system. This software will reduce the cost of processing invoices as well as eliminate paper invoices from vendors and provide more control over your purchasing, invoicing and management of vendors.

The ideal expense management software should allow back-office consolidation, which includes purchase orders and invoice entry, as well as advanced approval workflows, and reports with actionable information. It must also be able of integrating with your current accounting software.Reduce the cost of an invoice by an average $16 each year in efficiency of invoice processing. 1

3. Modify your process for purchasing

How do you know about the companies from which you purchase your supplies and parts? How often do your staff source parts from vendors that you’ve never previously worked with? Are you buying at the lowest cost? Reduce your risk by using an option that allows you to access an online marketplace of verified suppliers.

It is also possible to search for a the category, the location or other criteria to find results immediately and browse through bios, pictures and videos.

4. The focus should be on the credentialing of vendors

The management of vendors is more than just conducting background checks. Without the proper solution, the process of vetting can be time-consuming and complicated. Errors and missteps can result in higher costs as well as risk and fraud. It is essential to have a complete vendor credentialing system that can be tailored to meet your specific business needs. It is essential to only work with suppliers who meet your compliance requirements.

Additionally an effective vendor credentialing program will allow you to define security requirements for your company or property level. Additionally, it should allow you to monitor compliance status, metrics for success as well as background checks and levels of risk. A thorough performance profile can help you to lower the costs associated with risk and liability, as well as to ensure compliance.

5. Modernize and manage vendor payments

If you pay vendors by check and cash, your staff is spending long hours dealing with paper. A software solution for source-to-pay can assist you in transforming to a digital, modern vendor payment solution that streamlines and streamlines the entire process of acquiring vendors. Reduce costs and eliminate the use of paper checks that are susceptible to mistakes due to lengthy manual process.

Another tip is to Make sure that the software provides immediate visibility into the status of payments and integrates with your accounting software.

6. Make use of group purchasing and gain access relevant data

The old saying “There is power in numbers” is true when you join with hundreds others of similar property management firms to benefit from group purchasing. This is the most efficient way to purchase the highest quality products from trusted suppliers at the cheapest costs.

You’ll also require insight and data that are crucial to improve decision-making and identifying trends in vendor usage. The solution you select must, therefore, offer you:

  • The quarterly purchasing effectiveness and purchasing power reportincludes an in-depth examination of the overall spending profile and the performance of the process using particular metrics for property operations and used vendors
  • Budget dashboards, widgets, and other tools which provide the benchmark metrics for performance and information on efficiency in purchasing and efficiency, as well as a three-way match of orders, contracts and invoices in order to manage and alter spending patterns.
  • Transparency and reporting on compliance of vendors as well as master contracts
  • Integrations with forecasting and budgetshelp reduce spending on site by providing real-time information

RealPage Source to Pay

The RealPage Source to Pay Platform includes all the capabilities and features you need to get better control over your expenses starting with parts sourcing, purchasing products to invoicing vendors to payment by the vendor. Source to Pay helps you navigate the buying process with real-time information across all of your portfolio.

RealPage Spend Management, the foundation part of the Source to Pay Platform, is a complete procurement and buying solution. It centralizes and streamlines the entire source-to-pay process and makes it easier for procurement, invoicing and engagement to cut down on the cost of processing invoices and remove paper invoices and checks. Include credentialing for vendors in your strategy for source-to-pay to reduce the risk and liability of your vendor.

Source to Pay is compatible together with RealPage Accounting for a streamlined and a more complete experience. It’s also platform-agnostic. it also works with third-party applications, such as Yardi, MRI, Entrata and many more.

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