Paper Invoices and Checks Are SO 20th Century

It started with online applications by prospective buyers of apartments. Now co-op and condo bookkeeping is moving into the 21st century, as a growing number of management companies are embracing computer software that speeds the purchase order, invoicing, and payment processes, improving efficiency and providing clients with greater transparency. 

Moving invoice management to the AvidXchange online system has greatly improved efficiency for Century Management Services, says Jacob Sirotkin, a vice president. “The entire process – from the invoice being generated and sent to us by a vendor, to the actual checks being cut – is all time-stamped and virtual. You can go back and look at that entire work flow. And we no longer have stacks of paper invoices all over the place where those invoices are subject to sitting on someone’s desk or getting lost.” 

Boards that are clients of management companies using Avid or another online invoice system will find that it provides them with greater transparency, says Alvin Wasserman, the director of asset management for Fairfield Properties, which this year began implementing Avid for its roughly 60 properties in Nassau and Suffolk Counties. 

“A board member can look back at every payment made through Avid and see what was done,” Wasserman says. “With paper checks, if a board has a question about an invoice, they have to either email or call the manager and ask them to look into it. Then the manager would have to go into the files or the accounting software, and check it out.” 

Scott Rifkin, the board treasurer at the Crescent, a 285-unit co-op at 225 East 36th Street, says Avid has made it much easier for him to do his job. Once he logs into the system, he can view and approve invoices, or check out prior invoices to ensure there’s no duplication of payment. “Everything is in one consolidated, central spot,” he says. “Before, it was more of a haphazard process where it would be incumbent upon me to save certain things.” 

There are downsides to AvidXchange, however. Cost is one problem, says a management executive who uses the system and requested anonymity. “To begin with, it cost between $8,000 and $10,000 to implement,” he notes. “What we’re now spending on the system is close to what we’d spend to have one employee doing our invoices full-time. What’s more, there are substantial training fees of $3,500 to $4,000 a month. We also have a full-time person going in to correct mistakes and code everything, to make sure that things are applied to the right buildings. It’s not as big a cost saving as we expected. Additionally, the AvidXchange does not sync as well with our accounting system software as they said it would. For example, to get copies of paid bills, we have to go into Avid; they’re not saved in our accounting system as PDFs. You’ve got to go to two locations. It’s cumbersome.” 

The executive adds that one of the biggest issues involves unpaid invoices. “Avid syncs with the accounting system at only one point: when the invoices are approved. After that, they get sent to our accounting system as though they are approved to pay. But I might not be ready to pay. The problem is that, unless it’s approved, I’m not going to see that invoice in my open liabilities report. That’s a huge issue, and we’ve had a lot of conversations with Avid about it.” 

The expenses incurred by management companies for implementing the AvidExchange are not passed along to clients, however. “That’s on us – it’s our dime,” says Sirotkin, of Century Management. “But we feel it’s necessary to provide the additional service for our clients.” 

Wasserman, of Fairfield, says the added efficiency has made the investment worthwhile. Vendors can be paid within a few days after submitting an invoice instead of a few weeks. And keeping vendors happy, he says, is good business. “We call them vendors and contractors, which is a neutral term. But those are people,” Wasserman says, “They are running a business, and they need to have reliable cash flow to pay their bills.”