A New York Times article revealed that the real estate industry had seen a “record” growth in new agents between 2021 and 2022. Some states have seen as much as nearly 10% growth in agent licensing.
The influx of agents brings a competitive hiring landscape. As a real estate business, you want the best agents and brokers on your roster. To do that, you need the right incentives to recruit and retain agents that go the extra mile. At the same time, you also need a workflow that doesn’t leave your finance team overwhelmed with tedious tasks just to maintain your growing outgoing commissions and escrow disbursements.
Ahead, we’ll explore the manual workflow of processing paper checks and relying on your banking portal for payment data. We’ll then go over how accounts payable (AP) automation with Routable creates a better end-to-end experience by keeping your agents engaged and your finance team in control.
If you’re still paying your agents with checks, you aren’t alone. PYMNTS reported that 34% of the real estate industry still makes B2B payments with checks. While common, paper checks bring a few challenges for finance teams as well as your agents.
While getting a check for a commission is familiar, that doesn’t mean it’s always desirable.
It takes a while to receive a mailed check. The process of writing, sending, receiving, depositing and clearing a check can take up to a week or more depending on the location of the broker and agent. Adding to this, USPS recently adjusted its service standards. What does that mean for your agents? Since October of 2021, checks are already showing up a day or more later than they used to.
Many agents drive to a brokerage office to get their commission check faster — even if they’re now on hybrid or work-from-home schedules. Unfortunately, inflation has sent gas prices soaring 50% from last year. Some agents may travel an hour in traffic to reach their broker’s office, and the ends aren’t justifying the means.
Mailing checks can be risky. We want to trust that every envelope we drop in the mail will arrive at the intended destination. But mail gets lost, and if it arrives at the wrong address, it’s at high risk of fraud. Checks display bank account numbers, and when in the wrong hands, this sensitive financial information can lead to compromised funds and lost assets.
Mailed checks don’t offer easy tracking. When a check is in the mail, there isn’t an efficient way to track where that check is, which leaves both the agent and broker waiting for it to arrive. You know the frustration if you’ve ever lost a check in the mail. Scrambling to make up for lost mail leads to late fees and agent churn.
It isn’t just the agent that has to deal with check payment challenges. There’s a negative impact on your finance team, too.
Checks take up time and eat into budget. Finance teams have to print and physically send out each check payment. This manual process not only takes up time, but the costs add up. The average cost of processing one check is around $4 to $20, including labor, paper and postage costs.
Teams are overrun with agent check-ins. As mentioned, if you’re mailing paper checks, there’s a waiting game involved with no way to figure out where that payment may be at any given time. But just like you appreciate notifications letting you know when a delivery is on its way, commission-driven agents want to know when they can expect their payment.
These issues compound as you scale. If your real estate agency is sending out five or 10 commission checks a week with each agent checking in on their payment, that may seem like a sustainable workload for your finance team. But now factor in payments to other vendors and added commission checks as your portfolio grows. Suddenly five or 10 becomes 100 or 500, and those check-in phone calls and empty envelopes add up.
It's common for real estate finance teams to use their business’s bank portal to capture transaction details. As part of the workflow, your team may take this information and manually input it into your accounting software. This two-step process in two different systems unfortunately increases the possibility of errors.
The tedious work of moving back and forth isn’t the only issue, even with the most careful, detail-oriented staff.
Your bank portal may provide less visibility and control for both payer and payee. For example, your finance team doesn’t receive complete remittance details when you make a wire transfer with your bank. They might be able to see the payment recipient and the amount, but there probably isn’t a property reference number or address. Your finance team will have to manually match the wire’s information against commission details for each agent.
What’s more, the agent isn’t receiving a confirmation of the payment. They more than likely constantly check their bank account to confirm a deposit, creating anxiety in the payment process that doesn’t bolster confidence in your agency.
Your bank portal doesn't integrate into your accounting software, which prevents your finance team from a singular view of your payables. Just like the lack of payments insight, the disconnect between the two systems means that your finance team has to continually move between systems to find and verify transaction data.
As a preferred real estate payments platform built for sending payouts to brokers, landlords and real estate agents, our payment solutions get your agents paid efficiently — on time, every time. Plus, we look out for your finance team by simplifying their workflow so they can focus on more strategic tasks throughout their workweek.
Routable offers a variety of payment options, including every ACH delivery speed, from Standard (four to five business days) to Same Day, which settles in your agent’s bank account by the end of the business day. You also have the option of sending real-time payments that can reach your agent’s bank account instantly.
For agencies that still need access to check payments, we remove the tedious manual part of the workflow for you. Create and sign checks using our platform, and we’ll take care of printing and mailing them out for you, saving you countless hours of work.
With Routable, you can continue working with the accounting software of your choice. We work closely with Xero, QuickBooks, NetSuite and Sage Intaact, ensuring a real-time, two-way sync between systems so that your escrow funds and real estate ERP are correct without switching between platforms.
Onboard your agents and brokers on a secure platform customized to your brand. Our software helps them input payment details in just a few minutes and streamlines collecting any necessary documentation for tax filing.
With automated notifications, your team won't spend extra time fielding emails and phones calls from agents or brokers wondering about the status of their payments. From initiation to settlement, your payees will always know when they can expect to get paid.
Schedule a demo below to discover how Routable can elevate your agency's payment experience and workflow.
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