Ronda Kaysen in Building Operations on January 23, 2014
"It's a little embarrassing," says Seth Kobay, president of Majestic Property Management. "Even though it's going through this four-step process, [accidents have] happened."
When the wrong vendor is paid — or if the invoice is mistakenly paid twice — the only solution is to call the vendor. At Impact, a contractor was recently paid twice for a $2,000 bill. "We have to be on our toes," says Stuart Halper, a principal at Impact Management. "They don't call us if there are mistakes made [in their favor]."
Sometimes, vendors send improper invoices. They might make a bill out to the property management company or the building address and not the building corporation. Or they send a work order instead of an invoice. Or they don't include an invoice number. In these cases, property managers return faulty bills, restarting the entire process before it even begins. "Very frequently vendors screw it up," says Steve Greenbaum, director of management at Mark Greenberg Real Estate. "They get it wrong even when you tell them five times."
For many, involving the super and the property manager in the billing process is critical. "Even if it is as innocuous as the recurring exterminator bill, it opens up a dialogue regarding what was done and what needed to be done," says Greenbaum. "It really makes for much better communication. That way if a client calls, you've had that discussion."
It's no secret that many cooperative and condominium buildings operate on the financial edge. An unusually cold winter can send oil bills through the roof and put a building's cash flow at risk. Winter is so tough that an invoice that arrives in July has a much better chance of being paid quickly than one that arrives in January when oil bills are cutting into a building's cash flow.
But other problems can also drain finances. An unexpected elevator repair at the beginning of the month before maintenance checks arrive can spell chaos. For the bookkeepers toiling in the back offices, reconciling the bills with the balance sheets is a constant headache.
"A lot of these boards run tight," says Steve Birbach, chairman of Carlton Management. "They don't have any fluff in their budget for unexpected capital expenditures."
Vending Over Backward
Sometimes a vendor will make concessions just to get the business. One contractor recently allowed a Manhattan condo to pay its $200,000 elevator repair bill over a period of two years — without interest — because the building didn't have the cash to cover the cost. Patience on the part of a vendor can pay off. The city's property management firms manage scores of buildings and, even if a co-op's cash flow is tight in the dark days of February, they will continue to bring in maintenance fees to pay their bills. Says Kobay: "It pays to be loyal to some of the vendors, and hopefully they are accommodating."
Slow as the process may be, it is much faster in the digital age. Before office scanners, PDFs, and smartphones were commonplace, companies used to send urgent bills to condo and co-op board members over fax and wait for a faxed approval to return. Now, companies like Carlton Management scan the incoming invoices and e-mail them to board members for approval. A treasurer can review the document on her iPhone and respond within minutes. Carlton uploads property-related records onto its secure website, so board members can review them online.
Concludes Greenbaum, "I think people take for granted that these things get done automatically and correctly."
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