I am turning to our readers today for some feedback on process.
A lot of renter’s in our communities are one life circumstance away from total financial ruin up to and including losing their apartment. It has given cause for desperate behaviors such as sacrificing their electricity, gas, phone, cable etc. in order to make the rent. In other cases they use creative means such as robbing electricity via extension cords run to your common area outlets in hallways and laundry rooms. It’s amazing what you see out there anymore.
Now one could argue that life choices predicated on fulfilling wants over needs or necessities has contributed to a lot of this and in the same respect I think there an equal amount of people out there that make all the right decisions and still get hit with the downside of adversity.
Our residents are not the only ones faced with making the rent. Many of our employees are waging the same battle month after month. And, sometimes it leads to desperate actions.
That leads me to the premise for my question – money orders left blank by the prospective resident and or current residents paying rent are so very tempting in a desperate time of need. Can you share some of your processes with me as it relates to keeping good people honest. What do you do to keep integrity in the system on your bigger sites where you have six, eight or even ten people working an office and handling money. Specifically, what do you do to make sure these blank money order gems are not used as float to get by to the next pay period? How do you make sure that once an application is taken that it is processed in your property management software asap?
While they are a necessary evil – I have to believe there is a system of handling that keeps theft to a minimum.
Thank you in advance for your considerations and feedback.
Your ready for some economic prosperity friend,
M
0 Responses
Mike though I don’t have much thoughts specifically on money order processing, the principles you are speaking of to me have a much higher calling within a company’s culture. I am sure this is not the only aspect of community management that requires a higher level of honest and integrity. What I did for the company I ran in Florida was to highlight any and all examples where my team showed honesty and integrity and highlighted the benefits at our meetings. Not only did the team member appreciate the commendation but it helped develop a sense of closeness as a result of doing the right thing and that management supported it.
I am not sure if that helps or not but in my experience honesty is tricky to institute in difficult times so it is something that as a company you need to daily aspire to on every level. It can be something as simple as returning a pen you borrowed 🙂
Thanks for the post. I always enjoy your commitment.
J
Thank you for the kind words and adding to the conversation here.
This is a tough subject to put out there and in the same respect it is a reality we all deal with. I do agree that we have to level some degree of trust with all of our business partners be it vendors, employees or otherwise. Integrity with self and others despite it’s simple nature is likely the hardest character trait to imbue on the minds of others as your likely trying to undo years of bad habit. I like the repetitive nature of your approach. It’s the key to mastery.
Take care my friend and thank you again for your thoughts, they always add value…
M
I think that you have a level of trust with your employees. Ponzi Schemes (using ones rent to pay for another) ALWAYS unravel. The house of cards always falls down.
We do have reporting that shows if an app fee hasn’t been collected on an application. (It checks our Cash Write-up Database). We make people deposit and send up the slip along with the Cash Batch the same day they receive it. You are not allowed to hold money in the office.
As I said above, you do have to have a level of trust with your employees right? I would be curious to hear what other people do to keep an eye out.
B
Thank you for taking the time to comment.
It’s interesting, I’ve seen instances where the guest card and application never made it into the system leaving no real trail. And, if well timed, funds are floated for up to two weeks before the card gets dated and entered. That is where the trust factor gets extended and crushed.
Take care
M
This is a good question Mike! I think that having ethically sound employees is a concern in all businesses… Having a system of checks and balances works for things like cash payments, etc… But there is only one way to catch someone stealing cash or money orders.The issue can probably last a long time if they are covering their tracks well enough… I know of someone who went to prison for doing exactly that – stealing blank money orders. The company then adopted a stricter system for accounts receivable payments.
Managers just have to have a good sense of who they want to give financial responsibility to.
Warm wishes for a lovely holiday!
Athena
Thank you for stopping by, I appreciate the feedback.
You are right on with the covering tracks piece. The best technology systems can not flag what is not input. Paperwork comes in – money orders change hands – it all goes in a briefcase and we are none the wiser. It floats for a week or two – replacement money orders are purchased – paperwork makes it into the system and again we are none the wiser.
What were some of the front end steps in the stricter A/R systems, if you don’t mind me asking?
Thank you again. Hope your weekend was awesome!
M
I think the best way to monitor this is to set a standard for rent collections and hold those standards monthly by having your on site teams report to you their delinquency. It’s one thing to just pull the reports yourself, but if you ask your teams to pull the reports and send you the data on the 15th every month then they know you are watching.
People make poor judgement calls, and life can sometimes be challenging. Those are not excuses, but reality. We must trust one another, but hold people accountable for their actions by having them participate in the measurement of their work.
Mark
How are you, man! It’s been too long.
Let me run this one by you. You tour and lease with me. You fill out your application and hand me blank money orders to cover my application and application deposit. I take your application, knowing your are not moving in for 14 days, and put it in my brief case along with your money orders. I cash them and use them as float to get me to the next pay period whereby I purchase new money orders to cover. I then put enter your guest card and application into the system and use the new money orders to suffice the fees.
In the early stages it’s nearly fail proof given there is no real “red flag” for me to catch it.
M
Like Mark Said, It is essential that you outline with the tenants the rent collection methods. I believe that the future of rental deposits will lie in direct deposit, similar to how you may be paid at work. Each month on a specific date, let’s say the 30th of the month, the rent is automatic transfered from the tenants bank account to the landlord. This is a hands off approach and is easier for both the tenant and the Landlord. We all have busy lives and dealing with collecting things like money orders is a waste of your time! Why not automate that process? If you have any questions, please let me know! I run a blog on Property Management for the new generation called DoorMouse! Check it out if you like. I just did a post of How to improve your Rental Property Advertising Campaign.
Hope this helps with your money order issues! Best Regards, Brendan Benson
Brendan
Thank you for taking the time to pen out a comment.
You are spot on in your thought and we already have those technologies in place via ACH. The problem is that not all people have bank accounts. The incident that I refer to in this post has a large number of residents whose incomes are subsidized by the government. And, they live on a cash basis. They get a check once a month. They go to the bank and cash it. The purchase money orders and leave the agents to fill them out. Therein lies the issue. Dishonest agents float the money orders between their own paychecks.
I do look forward to the day when we live in a cashless society.
Have a stellar day.
M