Utility Billing Best Practices for New Property Managers
If you’re new to managing a property, you might find utility billing a bit complicated. It’s necessary for you to have enough information so that you can be a successful property manager. With more knowledge, you’ll be able to make better decisions and improve your property.
There are many common mistakes that property managers make including the following:
- Incorrect Billing Amounts: Failing to accurately calculate or record utility usage which can lead to incorrect charges.
- Lack of Transparency: Not providing clear explanations of how utility charges are calculated, causing confusion among tenants.
- Delayed Billing: Sending out utility bills late, can lead to late payments and tenant dissatisfaction.
- Failure to Update Rates: Not adjusting billing rates in line with changes in utility company rates or new regulations.
- Poor Record-Keeping: Inadequate tracking of utility usage and payments, making it difficult to resolve disputes or manage billing effectively.
- Ignoring Local Laws: Not researching or following local and state regulations regarding utility billing, can result in legal issues or fines.
- Inconsistent Billing Methods: Using inconsistent methods for calculating and distributing utility costs, leading to unfair billing practices.
- Neglecting Dispute Resolution: Failing to address or resolve tenant disputes about utility bills promptly and professionally.
Don’t let your property fall into these billing issues! With the right information and utility billing management company, you can ensure that you’re set up for success. Here are some best practices to help you handle utility billing like a pro.
1. Understand the Basics of Utility Billing
Before you dive in, it’s important to know how basic utility billing works. The more that you understand this process, the more that you will know what to implement and how to proceed. You need to:
- Know Your Utilities: The first step is to identify which utilities you’re responsible for (e.g., water, electricity, gas) and how they’re billed. Take time to review your property’s billing process so that you understand how resident utilities are currently handled and other third parties that your property may use.
- Read Your Bills: The next step is to review your current utility bills and understand how utility companies charge for each service, including rates and any additional fees. You will also want to research what they provide in terms of software integrations, customer service, automatic billing, and more. Be sure to do a thorough job of researching so that you have a greater understanding of what your property billing process currently is. It will also help you to know if there are any current issues or pitfalls.
2. Choose the Right Billing Method
To be a great property manager, you need to understand the various billing methods that exist and how they impact your residents. This will also help you to choose the right billing method and make any changes needed. There are different ways to bill tenants for utilities. Here are two common methods:
- Submetering: This involves installing separate meters for each tenant so they pay for exactly what they use. It can be costly to set up.
- Ratio Utility Billing System (RUBS): This method divides the total utility cost among all tenants based on a formula (e.g., number of occupants or square footage). It’s easier to manage and has many benefits for both the property and the residents. It results in greater cost savings and allows you to increase the ROI for your community.
3. Set Up a Clear Billing Process
To manage utility billing well, it’s important to have a clear and organized process. Regardless of what systems you use or what kind of property you are, organization needs to be a priority.
Clear communication is also key. Residents appreciate additional information that breaks down their billing and informs them of any changes. This way, tenants will understand exactly what they’re being billed for and won’t be confused about their charges.
Additionally, you need to ensure that your multifamily utility billing company is set up to greatly reduce your costs Protect your rents from the pressure of utility rate increases. Using the right utility billing service makes managing your property much easier and more efficient. You want to partner with someone that has accurate and timely billing, so you don’t have to worry about mistakes or delays.
At Utility Billing West, our system helps track and analyze utility usage, which can save you money and ensure you’re only paying for what you use. Plus, our customer service is top-notch, so if you ever have questions or issues, we’re here to help quickly. By choosing our service, you get a reliable way to handle utility bills, keep your tenants happy, and make your property management smoother.
4. Implement a Fair and Transparent System For Residents
Utility management for residents can often be associated with feelings of stress or frustration. You want to do what you can to help them feel understood and also provide accurate information and education. Fairness and transparency are important for keeping tenants satisfied with their utility billing. Here’s how you can ensure both:
Explain the Charges: It’s crucial to make sure tenants understand how their utility bills are calculated. Include a clear explanation of how charges are determined in your lease agreement or provide a separate document that explains the billing process.
Handle Disputes Fairly: Be ready to address any questions or disputes about utility bills quickly and professionally. If a tenant has a concern or questions about their bill, respond promptly and calmly. Review the details with them and provide clear answers. If there is an error, fix it as soon as possible. Handling disputes fairly helps build trust and shows tenants that you are committed to resolving any issues they may have.
5. Stay Compliant with Regulations
Different areas have different rules about utility billing, so it’s important to stay informed. First, you need to research local laws to understand the specific regulations in your area. This means looking into what methods you can use for billing and any rules about how to handle disputes with tenants. Each place may have its guidelines on how utilities should be billed and what information needs to be provided to tenants.
Next, you should follow legal requirements to make sure your billing practices are in line with both local and state laws. This helps you avoid potential fines or legal trouble. Make sure to regularly check for any updates or changes in the regulations, so you stay compliant and keep your property management on top of utility billing best practices. Being aware of and adhering to these rules ensures that your billing process is fair, transparent, and legally correct.
Property Management Meets Utility Billing
Utility billing might seem complicated at first, but by following these best practices, you’ll make the process smoother for both you and your tenants. The most important step is to consider which multifamily utility billing company you’re partnering with! Property managers should think about partnering with Utility Billing West because it makes managing utility bills much easier and more reliable.
We offer accurate and timely billing, which helps avoid mistakes and delays. Our system tracks utility use carefully, so you only pay for what you actually use, which can save you money. Plus, Utility Billing West provides excellent customer support, so if you have any questions or problems, we’re quick to help. By working with our team, you can streamline your billing process, keep your tenants happy, and focus more on other important tasks in managing your property.