Public utilities: power, water, gas, meters, invoicing, billing…not exactly a topic that sparks the imagination. Still, property managers are often expected to become experts on the myriad ways that exist to manage their properties’ energy and utility use, and to be able to select and implement the best solutions for their community. Let’s be honest: even if this topic were more sexy, getting your head around all of these options can be quite overwhelming.
Here’s a common scenario. Let’s assume the average cost of $1.50 per 1,000 gallons of water, and an average usage rate of 100 gallons per person per day. For a 300 unit property with an 80 percent occupancy rate and average three people per household, costs for water alone will be $3,240. Even if the property bills residents $10 per unit each month for water, the $2,400 collected falls short of the $3,240 costs by $840. That’s nearly $1,000 per month that comes straight out of properties’ pockets…and profits.
How do you get that money back? The solution is often a combination of finding ways to manage your properties’ utility billing and overall energy management. The keys to doing this well, and deciding whether to focus on efforts to reduce consumption and promote conservation or find ways to allocate costs to consumers more effectively, can be discovered by performing an audit on your energy management model.
Auditing your utility usage and billing may sound like the opposite of a good time, but just remember — there are dollars to be saved. We recommend taking a close look at three items: 1) billing methods, 2)utility bill audits, and 3) equipment efficiency. Think of these as the three keys to an effective energy audit.
Something as simple as the way you bill residents for utilities can impact overall costs and consumption. Flat rate billing or a variety of RUBS Methods (Ratio Utility Billing System) can be effective. But if your billing still leaves you paying hundreds of dollars in utility costs each month, you may want to consider submetering. Submetering can help reduce the extra overhead cost associated with energy management and actually discourage wasteful behaviors. After all, people are more incentivised to conserve on their energy usage when they receive an accurate view of their use and are billed accordingly.
Another technique that properties use to simplify utility billing has the added benefit of also reducing delinquencies. Convergent billing means that residents receive a single statement each month for rent and all utility consumption. The ability to pay bills once is more convenient for residents and helps properties ensure that utility bills don’t get forgotten or ignored. Systems like ResidentUtility take the guesswork out of convergent billing by providing single statements to residents each month with their complete balance.
Utility Bill Audits
Properties may receive dozens of invoices from local public utilities each month. Does the work of reviewing each bill for inaccuracies then entering billing data for each unit fall to you or a member of your staff? You should be aware that there’s an easier way. Rather than letting data entry get in the way of other crucial tasks, or worse yet, ignoring it for weeks on end, you can find a service to automate billing audits and invoice processing for your properties.
Utility invoices may contain more errors than you would expect, so billing audits don’t only provide peace of mind, you often come out ahead in both time and resources. Property Solutions provides services for companies seeking double-entry accounting, data validation, 24-hour processing turn-around, and data that integrates directly into your current management software. These kinds of services are vital to ensure your billing is always accurate and timely.
One final consideration is based on the energy and utility infrastructure of your property. Industry research indicates that more than 25 percent of energy and water is wasted. And wasted resources cost just as much as those that are being put to good use. The 2014 study by the SAHF affordable housing nonprofit finds that much of this waste can be “corrected by the expansion of efficiency upgrade programs in multifamily housing.”
Think about the pipes that require repeated repair, or those ancient AC units that run all day, racking up consumption rates and your utility bills. The investment in high quality equipment may feel like a financial pinch in the short term, but those upgrades — whether smart thermostats, lighting upgrades with motion sensors, new water fixtures, point-of-use water heaters, can help reduce bills immediately and save your property well into the future.
Now you have the keys, you can use them to open up thousands of dollars of savings for your properties. For more information about ResidentUtility, convergent billing, or our utility bill audits and invoice processing services, please contact your Client Success manager today.