The Pros & Cons of a Paperless Property Management Business

Years ago, businesses were built on paper.

Paper, paper, paper. When you manage apartments, paper is probably a considerable part of your life. It’s still a fundamental business management tool today, but it’s increasingly becoming less and less necessary. So if you’re thinking of switching to digital, the time is now.

Guess what—in today’s world, paper is becoming increasingly obsolete. From ordering supplies to collecting rent, digital options are everywhere. Here’s what you need to know to step into the future and start running a paperless property management business.

Going paperless save trees
Image “Going Green” courtesy of Flickr user State Farm licensed under CC by 2.0

We’ve gone digital, man, and the frontier lies before, not behind us.” Unless you’ve been living in a cave (an office full of filing cabinets probably feels like one), you’re reading this and thinking it’s past time to ditch the paper pile. Taking the paperless plunge seems risky for many business owners. After all, going paperless means embracing technology, and yes, that’s a daunting prospect in any industry. But the question is always how do you become a paperless property management business?

The truth is, many apartment management groups still rely heavily on paper. But why?

We’re living in a time of significant transition, one in which the old system of record-keeping used for thousands of years (think clay tablets, papyrus, and bamboo) is finally giving way to more modern solutions.

Someday, your business will be forced to switch to paperless to keep up with contractors, vendors, service providers, and tenants. It’s possible to go nearly 100% paperless across the board. The future is already here, so it’s wise to move to paperless apartment management immediately.

To Switch or Not to Switch: How to Go Paperless

The realistic way to update to a paperless business is with a measured approach. First, examine the way your business currently manages and stores paper records. Likely, much of your business is already digital. What will the scope of the switch to an entirely paperless business look like?

Fortunately, there’s flexibility in the timeline to go paperless. While you could switch today, there is still a lot of practicality to using paper. Receipts for credit card transactions and employee records are just a few areas where paper works fine. For now.

Of course, as new technologies become the norm, expectations shift. Many renters prefer digital receipts and the convenience of online rental applications and lease agreements, easy payments, and maintenance scheduling. Vendors may push you toward online payments, EFT, and digital invoices. As time marches on, so will technology. It will become increasingly necessary to turn your business into a paperless office.

There are plenty of options available to those wanting to modernize. For larger property management companies or those with a high volume of records, consider hiring a firm to take on the record conversion for you. Depending on your budget, data management companies will help you organize and store data, then provide maintenance services once the conversion is complete.

Smaller businesses managing a single apartment complex may want to take the process slow and save money with a DIY approach. Simply establishing systems and using digital data management as you move forward will help. Scan and convert records as you move along. Manually scanning documents is clunkier than hiring a data management service, but progress is still progress.

5 Benefits of Paperless Property Management

Still not convinced a paperless office is the right way to go? There are several areas to explore as you weigh the pros and cons of taking your business into the 21st Century (which is NOW).

1. Financial Benefits

Bank accounts are easy to set up for EFT (electronic fund transfers) and withdrawals, simplifying the payment process for employees and vendors, and rent collection for tenants. Money goes into your account instantly, and you receive payment confirmation without bounced checks or fees to contend with.

Paperless billing also benefits you on the A/P side. You’ll avoid late fees by setting up automatic withdrawals, recurring payments, and opting for the convenience of digital statements. Payroll is easily set up as a paperless service as well—no more fussing with check stubs and paperwork. If you spend hours paying your bills each month, you’ll be amazed at how easy automatic billing is. Better yet, come tax time, you’ll have a clear record of your A/P, so there’s no searching for signatures and receipts.

2. Time & Space Savings

We all know time is money, yet many of us still wrestle with technology because we don’t want to sit down and learn. This is a pennywise and pound-foolish mentality. You may save time now, but eventually, you’ll be left behind. If you don’t feel comfortable going digital, it’s a worthy investment to take classes or hire a consultant to train you.

Going paperless will save you time in the long run by eliminating lost and misplaced documents. You’ll save on human resources, too—employees won’t need to spend their time processing, filing, and organizing paperwork. Experts estimate that businesses save 40 work hours each week by switching to digital.

One of the best aspects of digital data is searchability. Compiled data is easily searchable, and information is at your fingertips. When you digitize your documents and use cloud storage, you can access information wherever you are. If you’re inspecting an apartment, for example, you can pull up the records on your phone and see when the carpeting was last replaced or if some damage is new. Reduced delay means faster response, so ultimately, you’ll even be a better landlord.

Finally, look at your filing cabinet and the overflowing boxes in storage. Imagine storing all that information in a space the size of your fingernail. Paper takes up a lot of room you could use for a cappuccino machine.

3. Cost-Effective

Take a look at your supply budget. How much do you spend on ink, postage, and yes, even paper? The costs associated with paper add up quickly. You’re always looking for ways to save money, right?

Digital storage and converting files or paperless property management is an investment now, but in the long run, you’ll save money, in addition to time and space. Cancel your storage unit rental. Stop paying for maintenance on your printer and copier. Turn your file room into a coffee station. It may be less expensive than you think, and you may realize cost savings right away.

4. Never Lose Files

When it comes to going paperless, many apartment management businesses fear losing files. We’ve all faced the terror of tech problems at one point or another. Many business owners fear a digital meltdown, which is why paper feels so safe: it’s tangible. You can always refer to paper records.

Yet, with cloud storage, you have easy recovery even if your systems all go down. Work anywhere and access any piece of data you need for your business.  You can create a digital trail too. Most entities, including the IRS, allow for digital filing and reporting. With digital files, it’s easier to create a “paper trail” or historical record.

5. Environmentally Friendly

Paperless property management is also good for the planet. Paper accounts for 25 % of landfill waste. Cutting this waste by 10% would eliminate 1.6 million tons of greenhouse gas production—the equivalent of taking 280,000 cars off the road! Paper processing and even recycling requires energy and creates waste.

The move to becoming a paperless rental business has peripheral benefits too. Going paperless reduces the waste from ink cartridges, energy used by printers and other paper-involved machines. Think of shredding and document destruction. Imagine the energy required to overnight a single document across state lines for a signature! Going paperless cuts out all that extra waste.

5 Drawbacks to Going Paperless

Now, there also are a few drawbacks to a paperless rental management company. These considerations are important, especially if you’re planning on making a quick switch to digital. Before you go entirely paperless, here are a few items to examine.

1. Protection from System Failure

If you face a system failure and your documents aren’t backed up with an off-site cloud location, you could face a huge loss. For small businesses who go paperless without a strong plan, a system crash is a nightmare, and failing to back up is a critical mistake. Before you make the leap, have backups in place.

2. Security

Sensitive and personal information is vulnerable to hacking and theft, especially when the data is digital. Every paperless property management houses sensitive renter information, starting with the details in the online rental application. You must protect your data with encryption and restricted access. 56% of organizations in the United States encrypt their data to protect personal information.

3. Revamping Processes

Every business owner knows that change is tough to implement, especially among long-term employees who might resist change. Significant changes to operating procedures can seem overwhelming. Provide plenty of training and time for your staff to learn the new ropes.

4. Upfront Costs

Going paperless may save you money in the long run, but in the short term, it may be expensive. Online rental application and payment services often entail an extra expense. Robust computer equipment, scanners, and subscriptions to cloud backup services will require an investment. Training staff to use the new systems is another expense to remember. It’s essential to plan for extra costs, especially if you’re watching your bottom line.

5. Health Reasons

While technology eases our stress and strain in many ways, hours at a computer can lead to health concerns. Carpal tunnel syndrome, eye, back, and neck strain are all potential consequences of computer work. Spending hours hunched over stacks of receipts and hauling file boxes cause health issues as well. Look for ergonomic equipment to counteract the effects of too much screen time.

Ready to Become a Paperless Property Management Business?

As you see, there are many benefits to going paperless and converting a paperless property management system. Even with the drawbacks, time continues to march forward, and our world is using less and less paper. When you switch, your business will save time and valuable office space. In addition, going paperless is environmentally friendly, and ultimately, ditching paper saves you money and enhances communication with your renters.

Of course, going completely paperless all at once isn’t suitable for all rental property companies. Instead, you can tackle the process in baby steps. Keep in mind the switch to more technology is inevitable, but it’s perfectly fine to go at your own pace. Slowly make gains as you become a paperless apartment management business and step into the future.

 

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