Even with the advent of new technologies like the internet, many homeowners associations are still stuck in the paper age. If your community still uses traditional paper statements and checks, it’s time to upgrade your method of HOA collections. There are many advantages to paying HOA dues online — both for the association and the homeowners. However, before you set up electronic payments for HOA dues, here are some important things to remember.
Why Should You Set Up Electronic Payments for HOA Dues?
There are many benefits and conveniences to using electronic payments for HOA dues. The HOA will be able to decrease expenses since you won’t have to spend as much on paper, ink, and postage each month. Having HOA online collections allows you to send statements via email, which incurs little or no expense. The money you save can be used in other aspects of community management.
Electronic payments can also lead to more on-time payments. Residents can settle their dues online using whichever payment method they prefer: credit card, debit card, or electronic check. HOA electronic collections can also give them the option of automatic or recurring payments. This is not only convenient for residents, but it also prevents late payments. The board won’t have to spend as much time following up with delinquent homeowners.
Another benefit of online payments for HOA dues is that accounting work becomes much easier. Payments are received and processed automatically and instantly. You’ll also have an electronic record of all financial transactions. The likelihood of lost checks and undelivered statements is greatly reduced as well. With electronic payments, you won’t need the bank to act as the middle man. It also eliminates the need for lockboxes.
Apart from community benefits, online payments can help save the environment as well. At present, 50% of waste from businesses comes from paper. Approximately 5 liters of water is also used to produce just one piece of paper. If HOAs exclusively conduct transactions online, they can significantly cut down their paper waste. Adopting green initiatives like this also helps attract residents who are passionate about the environment.
4 Things to Consider Before Setting Up Electronic Payments for HOA Dues
Making the switch to online payments for HOA fees might seem complex, but as long as you consider these 4 things, you’ll be able to make a smooth transition.
1. Choosing an Online Payment Platform
HOAs should first determine which platform they will use for online payments. Your local bank can oversee electronic payments via bank transfers. The bank will likely already have an online platform that both the association and homeowners can use. They can also offer recurring payments and electronic withdrawals. Just make sure to check with your bank’s requirements. For example, all homeowners may be required to set up an account with the bank.
- Payment Service Provider
There are many payment service providers that can handle your HOA’s online collections. These platforms will provide homeowners with different payment methods such as credit card, debit card, and e-check. Payment service providers also offer simple and easy integration. All you will need to do is input some code into the HOA website.
When choosing a payment service provider, make it a point to check the level of support they offer. Payment errors may be inevitable so homeowners should be able to contact someone when that happens. Also, check if a service provider has security measures and certifications. You want to assure residents that their information will be kept safe even if you are using a third-party service.
- In-House Online Payments
An in-house online payment system will provide the HOA with more control. However, it will require some work from your web development team. You need to build your payment page, set up a secure server, obtain SSL certification, and test the platform before going live.
2. Check for Fees and Other Costs
HOAs should also consider the fees or costs that come with the online payment platform they choose. Banks may have fees for setting up accounts and money withdrawals. Once the entire association has accounts, they may be able to offer free fund transfers.
While an online payment provider offers more flexibility and convenience, they will charge a monthly fee for their service. They may also collect a fee per transaction on their platform as well as when transferring funds to your bank account.
You may be able to skip transaction fees with an in-house system. However, there will still be costs for setting up the platform, monitoring the server, and other related tasks.
3. Payment Tracking and Reporting
Electronic payments for HOA dues can make accounting and bookkeeping more manageable. Since you have an online platform, all transactions will have electronic records. Since you’ll be able to track payments, it will be easier to follow up with delinquent homeowners. Some online payment platforms also offer reporting. You can download payment reports and integrate the information into your own financial documents.
4. Online Payment Adoption
You should also consider the homeowners before setting up electronic payments for HOA dues. While some homeowners already expect online payments, there are some who may have difficulty adopting an online payment system. Make sure to talk to your homeowners about the switch to an online payment system — especially if they have to set up accounts. You can also provide an orientation or tutorial to help them with the transition.
Electronic Payments for HOA Dues Can Make Community Management Easier
It’s becoming more essential for HOAs to use electronic means to process dues. Going digital not only means saving money but it also allows you to stay competitive with other associations. By significantly increasing the convenience for everyone concerned, electronic payments for HOA dues can lessen homeowner delinquencies. HOA online collections can also make other management tasks easier. As long as you keep in mind these 4 things, you’ll be able to have a smooth transition to an online payment method. If you’re ready to upgrade your community’s collection methods, don’t hesitate to give Clark Simson Miller a call today.