There’s an ongoing debate among commercial property managers: should we be invoicing our tenants monthly? After all, tenants should already know how much their rent is and when it’s due. This information is in their lease and it doesn’t change. Shouldn’t we save time and resources by skipping these recurring invoices?
While we understand those arguments, we still believe that monthly invoicing is a valuable tool that you should take advantage of. Here’s why sending a monthly invoice to your commercial tenants is important for you and your tenants – and how you can streamline the process using technology to make it easier for yourself!
Avoid Missed Payments
Like all commercial property managers, you want to maximize on-time payments. Invoicing monthly can help! In general, most tenants will remember to pay on time, but we know that others might forget even with a reminder. Even so, sending monthly invoices gives tenants one less excuse for missed or late payments.
To maximize the effectiveness of your reminders, send them out about a week before the rent payment is due. This is usually just enough time to ensure they make an on-time payment, but not too far in advance that they will end up procrastinating or forgetting.
Avoid Missed Rent Escalations
While you are likely keeping track of rent escalations that are in the tenant’s lease, your tenants may not be paying that much attention. Tenants are busy with their own business and may forget that the rent rate is changing due to a planned escalation. Missed rent escalations cost you money and create an excuse for your tenant to not pay the full amount owed.
When you invoice monthly, the tenant knows exactly the amount that they are expected to pay. Invoicing monthly will help reduce income loss due to a forgotten escalation.
It Builds Credibility
Virtually every other type of service will automatically send out invoices. Your commercial tenants that aren’t getting invoices from you are still getting invoices from their utility provider and all their vendors. Not sending an invoice makes it easier for their rent payment to slip through the cracks.
Sending out reminders is a great way to simply establish greater credibility in your commercial real estate business. It looks more professional and shows that you’re organized. Many of your tenants will also appreciate the reminder which improves tenant satisfaction.
Whether you choose to send invoices by mail or go paperless, invoicing monthly will help you get the same level of attention that all those other vendors’ invoices receive. Rather than being the very last bill, your tenants think about. Hopefully, yours will be one of the first!
Improve the Consistency of Cash Flow
You have bills to pay too. And when several tenant rent payments are late, it can be a major disruption to your cash flow. You may not have the necessary cash to make payroll and pay for janitorial or landscaping services. This can damage your relationship with contractors and trigger a chain reaction of consequences.
Sending out reminders emphasizes the importance of not just paying rent but paying rent on time. It helps ensure your cash flow remains consistent no matter what.
Monthly Invoicing Made Simple with STRATAFOLIO
The bottom line is that if you are looking for an increase in on-time payments from your commercial tenants, you should be invoicing them every month. While invoicing all your clients can seem complex when you’re managing numerous properties, it gets much simpler with STRATAFOLIO. STRATAFOLIO is an online platform that streamlines your day-to-day commercial real estate operations, helping you send monthly invoices with ease! Also, STRATAFOLIO automatically captures rent escalations, so you can rest easy knowing that your invoices are up-to-date and accurate.
Interested in knowing more about STRATAFOLIO and how it can help you send invoices in just a few clicks? Schedule a 1:1 demo to see how STRATAFOLIO can improve your commercial real estate business, or contact us for more information.
9 out of 10 companies are missing lease escalations.
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