Preauthorized payments are a form of payment automation where customers enable companies to withdraw funds for recurring payments directly in their account, typically via the EFT (electronic funds transfers) or ACH (Automated Clearing House) process. Preauthorized payments have been around for a while but have become more popular as the use of cash has declined, the 2016 Federal Reserve Payment study found that over 144 billion payments in the US were non-cash and they totaled over $170 trillion. The shift away from cash persists, 83% of American businesses leverage ACH/EFT payments.
Here are 5 reasons why you should too:
Convenience
Preauthorized EFT/ACH payments minimize the number of charges being paid in person by check, cash, debit, or credit. Customers no longer have to travel to and from offices to make payments improving customer service, while employees can work continuously on one task without interruptions from customers looking to make a payment. Preauthorized payments please owners and tenants because it adds simplicity to hectic bill payments saving both parties time.
On Time Payments
When customers authorize their property management company to take AHC/EFT payments, it virtually eliminates the possibility of late or missed payments because customers no longer have to remember their payment due dates. Instead of waiting for customers to issue a payment, property managers receive payments on their scheduled date without having to remind customers of missed payments or charge late fees. This helps to maintain cashflow and plan future maintenance and other spending decisions with greater accuracy.
Batch Processing
Property management companies that are collecting payments from hundreds to thousands of customers every month for rent, management fees, and special assessments can process pre-authorized EFT/ACH payments all at once. Software that enables batches processing of preauthorized payments streamline what would otherwise be a lengthy and repetitive manual process boosting productivity in for property managers and accounting staff.
Paperless
Besides authorization forms, which can be digitized, preauthorized payments are completely paper free. Minimizing paper usage facilitates organization, increases profitability, improves brand reputation, and enhances customer loyalty all which enable growth. Paper can be hectic and confusing to sort, file and compile for everyone including owners, tenants, and property managers. With paper comes many costs including paper, stationary, filing, and printing which can negatively impact profitability. Leveraging preauthorized EFT/ACH functionality can eliminate those costs by digitizing the process from pay from payment to receipt and ledgers for owners and tenants across your entire portfolio.
Rewards
Customers who permit preauthorized payments on their credit card can easily reap the benefits of credit card point systems like travel miles, cash back, or grocery points which can improve customer satisfaction. In paying their bills, owners and tenants can benefit in other areas of their life which boosts the positive impact your organization has on their day to day life. Preauthorized payments also help to improve customers’ credit scores by giving them the opportunity to charge payments to their credit card instead of directly to their bank account on a recurring basis.
Preauthorized payments benefit your entire property management network including frontline staff, customers, vendors.
