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Weekly UpdatesThe real estate industry is moving into a leverage and extend mode. This refers to the growing trend among commercial and residential property owners and managers to get the best possible value from their investments, while complementing them with solutions that enable business process efficiency.
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The procure-to-pay process, which traditionally required much manual and paper-intensive work, is ripe with opportunities for improvement, including green initiatives that reduce paper flow. In response, leading real estate management software producers are delivering sophisticated electronic and paperless processing capabilities for invoices as well as maintenance, repair and operating (MRO) supplies procurement.
Areas that commercial and residential real estate companies are "leveraging and extending" technology toward new solutions include the following examples:
Vendor Management
The process of signing up a vendor typically begins with a paper-based application that the vendor completes and submits. Such an application can be many pages in length, and once submitted, it still needs to go through a manual approval process. One way to improve this paper-heavy scenario is a vendor portal, which streamlines interaction between vendors and property managers in both certification submissions and various day-to-day tasks. Once signed up, vendors can use the portal to submit invoices, check payment status and upload insurance certificates to a central location.
Request for Proposals/ Request for Quotes
Customers are seeking streamlined delivery of requests for proposals and quotes to certified vendors, one that does not involve the cumbersome process of compiling and mailing paper bundles. One approach to automating this process involves working with supplier sources to develop green purchasing strategies. This step calls for engaging the supplier to provide port folio-level product usage and devising alternative suggestions for lighting, janitorial and other supplies that include potential energy, waste and cost reductions. Such suppliers also might recommend eco-friendly maintenance, repair and operating (MRO) supplies, along with an online supply catalog. They also can leverage integrated, centralized spend management to refine spend analysis and intelligence, allowing tracking and monitoring for additional savings opportunities.
Purchase Orders
Using advanced software allows organizations to move a purchase order through the approval process electronically. Complex approval criteria can be established within such a sys tem, automating the approval process within the purchasing workflow and delivering automated notifications to the appropriate individuals who enter their approvals directly to the sys tem. Benefits of this approach include advance capture of budget details and significantly faster invoice processing. Real estate companies that implement a purchase order system avoid the hack-end obstacles created by an unmanaged procurement process.
Invoice Processing
The trend toward eliminating the paper invoice is growing. Vendors can upload invoices or fill out forms online. Leading-edge procure-to-pay systems that nearly eliminate paper invoices and reduce the time and money needed to store, sort and mail printed invoices are on the market. These solutions--some of which ate developed specifically for the real estate industry--automate the manual steps involved in receiving, entering, coding and approving invoices. Many real estate companies have completely outsourced invoice handling and processing to service providers, relieving them of a nonvalue-added paper-handling task.
Payments
Processing checks is time consuming, so the move to electronic payment in the form of electronic funds transfer is growing in popularity. In this scenario, vendors are paid either through automated clearinghouse (ACH) or check, eliminating the need to print checks internally, this lowers transaction costs, reduces payment processing errors, and makes cash flow more controlled and predictable.
Add up the aforementioned factors and you see that it is possible to achieve efficient paperless processing in procure-to-pay. One example came recently when CB Richard Ellis revamped its accounts payable process into a centralized) electronic invoice processing system. An element of the company's planet building initiative, this holistic approach unifies end-to-end accounts payable processing activities provided by four solution partners within one interconnected, paperless processing flow, with impressive results.
In CB Richard Ellis's end-to-end sys tem, an invoice is transported to each partnet in turn, much like a baton in a high-tech relay race. This creates an interdependent workflow that accelerates processing time while reducing variables that produce human error and material waste. This centralization reduces margins for error because redundant data entry and manual processes are no longer performed and approval processes are enforced more tightly. The result is a faster, more efficient, more earth-friendly system for processing invoices and paying vendors.
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Foregoing site-based processing also lets CB Richard Ellis redirect resources previously used for back-office processes toward growth and revenue-oriented activities. Centralization also enables accessibility for audit purposes. Moreover, by centralizing and digitizing the process, the company puts itself in a power position for controlling cash flow, and takes strides toward meeting its goal of achieving carbon neutrality in its facilities by 2010. (For more about CB Richard Ellis's paperless process, read the sidebar, right.) Forward-thinking real estate interests are quickly grasping electronic processing's significance in streamlining their invoice processes. Offering competitive advantage, efficiency, customer service, environmental sustainability, return on investment, newly created technologies can be a significant factor in helping real estate owners and managers attain their business goals.
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RELATED ARTICLE: ABOUT YARDI SYSTEMS
Yard Systems, Inc., is the global leader in the design, development and support of integrated asset and property management software for organizations of all sizes. Our client-driven software serves more than 15,000 businesses, corporations and government agencies, representing more than 7 billion square feet of commercial space and 8 million residential units flobally. For more information about Yardi products and services, visit www.yardi.com.
RELATED ARTICLE: HOW PAPERLESS INVOICING WORKS
The following is an up-close look at CB Richard Ellis's paperless invoice system in action:
1. Paper invoices are sent to an off-site processing center for digitization, or are initiated electronically through the MRO procurement service, directly into the procure-to-pay system.
2. The electronic invoice is routed directly through CB Richard Ellis's approval process.
3. Upon approval and order to pay, the payable is automatically routed to the e-invoicing and payments network.
4. An electronic funds transfer to the vendor using the vendor's preferred method--paper check or electronic funds transfer.
With this fusion of best-practice solutions and technology, payment is made in five days or less, compared with up to 45 days under the old paper-oriented system. The process integrates with the core property management and accounting systems with which CB Richard Ellis manages its properties. Moreover, it's transparent, with invoice status being clear to all parties at every step. And with the volume of invoices that the company handles, the results--and the return on investment--are immediately apparent.
By Joel R. Nelson, Yardi Systems, Inc.
Joel R. Nelson joined Yardi Systems' corporate headquarters in 2007 after many years with the Boeing Company and Hughes Electronics Corp., where he won national prominence and multiple awards of excellence for designing and executing communications programs. He earned a bachelor's degree from Pomona College in Claremont, Calif.
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