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New ACH Rule Makes Electronic Payments More “Personal”

A day in the life of a property manager is never boring. Between answering phone calls, showing units, following up on emails, managing service requests, and dealing with move-outs and renewals, there is never a dull moment. Smart property managers are always on the lookout for new ways to improve efficiency and free up time for important tasks.

Converting paper checks to electronic ACH payments is a great way to boost productivity by eliminating daily trips to the bank. Over the last decade, more and more property management companies have recognized this opportunity and deployed electronic payment solutions at their sites. By scanning paper checks to process as electronic ACH debits, on-site staff finds more time to serve residents, fill vacant units, and increase revenue.

Perhaps the only drawback to check conversion has been the requirement that residents deposit their checks in a drop box, rather than simply delivering them personally to property staff. ACH transactions are governed by NACHA, the Electronic Payments Association. One of NACHA’s requirements for these Accounts Receivable (ARC) transactions was that only checks delivered securely – such as through the mail or at a drop box location — may be scanned and converted to electronic ACH payments. So, when residents brought checks into the leasing office, the staff had been required to direct them to a drop box. This extra step can interrupt the flow of customer service and depersonalize interactions with residents.

Thankfully, a recent revision to NACHA rules eliminates this requirement and expands the scope of ARC so that on-site staff may now personally accept checks. Beginning on March 16, 2012, paper checks delivered in person to apartment staff may be converted to ACH debits and processed electronically. This change has the potential to improve interactions with residents and increase resident satisfaction.

If you are currently using an electronic payment solution and would like to take advantage of this new regulation, please be aware that you’ll be required to provide a copy of an “authorization notice” each time residents make a payment. NACHA suggests using language that is substantially similar to this example:

“When you provide a check as payment, you authorize us either to use information from your check to make a one-time electronic fund transfer from your account or to process the payment as a check transaction.”

If you currently use an electronic payment solution, you should already have a similar notice posted conspicuously near your existing drop box location. This rule simply requires that the same notice be available to residents when they make an in-person check payment as well.

No property manager’s life is ever boring, but electronic payment processing continues to evolve to make sure that every property manager has more time to spend on the things that matter.

What do you think about NACHA’s new rule for ARC? Will you make any changes to your rent collection process?

Article written by Kimberly Lang, Vice President--Product Management, Payments, for RealPage.   Property Management Insider

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My last property had a check scanner on site that electronically submitted information to the bank. It would allow me to process as many checks and money orders that I had received for the day and I would process the funds near the end of each day I received money for any reason. We would then copy the checks/money orders and keep the originals in the office (voided). The copies would be sent to the corporate office on a monthly basis with monthly reports for archival.

  Johnny Karnofsky
This comment was minimized by the moderator on the site

I am the AR manager for a vendor. Our bank also provided us with a check scanner and it has saved us a bunch of time. I can scan the checks and deposit them electronically in almost the same amount of time as it used to take just to write up the deposit slips. The system is very easy to use.

  John McKeegan

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