August 13, 2015
Are Your Residents Still Paying by Cheque? Five Hard Facts You Need to Know
According to recent reports from the Canadian Bankers Association, cheque use has been declining at a rate of 5% a year for the past decade. Most modern companies are transitioning to 100% online payments, while the federal government plans to phase out Canada Pension Plan and tax refund cheques by April 2016.
In spite of this growing trend away from paper payment, property management companies continue to favour accepting cheques for rent payment. Many property managers believe that cheques are the most cost-effective and reliable payment solution.
They are mistaken.
The Cold, Hard Truth About Cheques (and the Benefits of Online Payment)
The truth is, there are too many costs and risks associated with cheques to keep pushing paper. Here are five important points to keep in mind:
- Cheques cost you – both time and money. From administrative and clerical fees, to the time it takes to get to the bank, processing each cheque can cost between $13 and $19. Multiply that by all your units, month after month, and the numbers add up quite quickly.
- Cheques aren’t secure. With any cheque, you run the risk of incurring NSF charges. But the risk doesn’t end there. CIBC reports that Canadian cheque fraud costs North American business more than $20 billion every year. Because property management accepts more cheques than most modern businesses, the risk of being defrauded is quite high for property managers. It can take weeks for banks to clear a cheque; by the time it’s identified as fraudulent, not only would you be on the hook for bank charges, but you’d also be out on that month’s rent from the tenant in question, putting a serious strain on cash flow.
- Digital demand is on the rise. With the rising popularity of mobile devices across Canada, that demand will only continue to grow. Renters want online payment options, and cheques are holding them back. If residents aren’t able to use their preferred method of payment, they’re less likely to stay on as your tenant, or to recommend your property to other renters.
- Online payment is flexible, and convenient and transparent. With digital payment, you can offer renters a variety of options. They can set up pre-authorized payments every month. If that doesn’t appeal, renters can authorize one-time payments each month through a secure resident portal. They can use online banking at any time of day, seven days a week, so they have greater control and accessibility. Digital payments also translate to improved transparency, offering residents real-time payment information, automated receipts, SMS payment reminders and more.
- Going digital saves you time and money. Because all payment information is digitized and centralized, electronic payment systems are more efficient and effective than paper-based processes. Payments are settled much faster than depositing paper cheques, and funds flow directly into the property manager’s account. Electronic rent payment systems allow property managers to spend less time pushing paper and more time improving the property itself. As an added bonus, there is no risk of bounced cheques, so you can save time and money while benefiting from increased protection.
Processing the Future: Digital Payment for Property Management
For businesses and organizations across Canada, cheques are quickly becoming a thing of the past. Property management has lagged behind in adapting online payment processes. But the time has come move away from outdated methods.
Forward-thinking property managers should consider adopting an electronic rent payment system for their properties. It offers a secure, reliable and efficient way to collect rent payments.
Online payment also meets the current demands of modern renters. In today’s tech-savvy world, property managers can’t afford not to stay current; they must provide electronic payment options for their residents.
To discover how Property Vista can help you move away from cheques and toward online payments, sign up for your free account today or give us a call to learn more.