New Program Feature! Prompt Payment Utility
Rent Magic has recently developed a new utility called Prompt Payment within ManageUDA Small Business and Enterprise Editions. While there are going to be a few enhancements added to it down the road, it is fully functional right now and can aid you in your quest for good cash flow.
WHAT IS PROMPT PAYMENT?
One of the things a property manager needs to be constantly on top of is making sure tenants pay their rent on time. While there are legal threats that may keep tenants from delaying too long, most landlords would obviously love to have the rent in on the 1st of the month. One of the ways to do this is via incentive. We have seen landlords offer free parking or hydro for paying rent on time (see Bonuses/charges in the Rent Magic Documentation), but there is another way: Prompt Payment Agreement.
The basic premise is the tenant agrees to a gross (higher) rent, but would pay the lower net rent if rent is paid on time. When setting up a lease with a new tenant, the lease should state the two rents. The first should be a gross amount. The second would be a lesser amount.
While this is a great incentive, landlords have been slow to use this procedure for one simple reason: It’s difficult to keep track of. However, we have developed a great module that will process everything quickly and easily.
WHAT WILL MANAGEUDA DO?
The idea for this utility came from one of our clients in Ontario. In Ontario, the law provides an allowance of a maximum of a 2% discount, so for now, ManageUDA is defaulted at 2%. When setting up a lease with tenant, you would select the prompt payment option in the tenant Editor. When charging rents, ManageUDA will charge the gross rent and then credits the 2% prompt payment in the tenant’s ledger. The discounted rent shows up in the Rent Roll. If the tenant pays on time, you do not need to do anything more. If the tenant misses your deadline, you simply need to reverse the credit. Easy, right? Not when you are dealing with hundreds or thousands of tenants. How did we make it more efficient?
If ManageUDA is open in front of you, click on Tenant Management | Tenant Editor. Select the tenant you wish to work with and click 'Next'. On the first screen you should notice a checkbox below the Rent Charge area called "Discount Rent". When you select it, a box will appear that will show the discounted rent should the tenant pay on time. Do this for as many as your tenant as you like and make sure to save.
Now click to Tenant Management, Batch Mode Functions and Prompt Payment. Select the building you are working with. Here you will find a list of all the tenants whom you have set up with Prompt Payment. Also, you will notice a few columns stating current rent charge, discount amount and 1st Payment and the Amount of Payment. Here is where you make the decision to reverse the discount. If the tenant has not paid, it will say ‘none’ under the 1st Payment column and you will be able to select all those who have missed the agreed upon date…
At this point, ManageUDA will charge back the applied credit for all the chosen tenants and you can then run the Late Payment Form utility. The system will use the current owing amount – in this case the higher amount – in the legal form, as this is the correct amount owing to you at this time.
THE LEASE
As mentioned earlier, the lease is required to stipulate the conditions. See Templates to learn more how ManageUDA can help you set up the lease via templates, so that you can create your lease with one click of the mouse.
WHAT’S NEXT FOR PROMPT PAYMENT?
We are still enhancing this unique utility. There will be a few more columns in the batch screen to help you determine if the tenant is on-time. For example if the tenant prepaid, it will now show the current balance. If it is at or close to zero, you will know the tenant is up to date. We will also build in the ability to choose the discount amount per tenant. You would then be able to have each tenant on a custom plan.