Countdown to NAPE Summit - Part 1
Countdown to NAPE Summit
Delivering More for Less: Increased Efficiency = Increased Competitiveness
Note: This series is geared toward land brokerages. It is designed to help them realize how they can differentiate themselves and therefore be more competitive by utilizing technology solutions already available to them. Obviously, if you are engaged in the hiring of brokerages, this information will be helpful to you as well. A more efficient brokerage can deliver more for less, and everybody wins.
Part 1 of 5 – Broker and Client Billing
Part 2 of 5 – Title Management
Part 3 of 5 - Field Acquisition
Part 4 of 5 – Asset Tracking
Part 5 of 5 –The Status Quo is too Expensive
Broker and Client Billing
The “Build or Buy” question is one that most brokerages face early on, especially in regard to broker billing. It is very tempting to attempt to build a system in-house—and with good reason. It appears to be very simple, and as land solutions go, it is one of the simplest problem to tackle. However, “simple” is not always synonymous with “easy”.
Let’s look at methods for processing broker and client billing:
Paper only is still a possibility, but certainly not conducive to increased efficiency. The process itself may make sense if the invoice is small, but paper only systems offer no ability to search for data electronically—ever. In today’s world, there is simply no place for such an archaic system.
Spreadsheets and email comprise many a billing system. The benefits are many, such as standardization, spreadsheet functions to multiply and add quickly and accurately, the ability to copy and paste data into master spreadsheets, and the ability to sort and filter data. All of these are valuable benefits, but they do not eliminate all of the undesired manual work that is still required. Someone must still handle the email attachments by saving them to a specified location, reviewing the spreadsheets, then compiling into another spreadsheet or accounting system via copying and pasting. The entire process is somewhat sloppy as there is much room for error and much time still required. Since time is money, this method is ultimately on the costly side, due primarily to the labor involved. Even with significant attention paid to standardization and controls, as well as sophisticated automation, there is an ultimate limit to the efficiency—one which can only be addressed by going to the next level.
Web-based systems offer numerous advantages over the spreadsheet and email method. Primarily, they can offer a degree of real-time control simply not possible with a spreadsheet. For example, having a user select from projects (or AFE’s, or billing categories, or any number of things) he/she is authorized to select is far superior to allowing the user to enter the project name himself/herself.
As an overview, a web-based system resides on a web server somewhere and is connected to a central database. The database is not only where data is stored, it is the ‘brain’ of the system, and can therefore determine what respective users see when logged on to the website. This allows for considerably more control, from setting day rates, authority levels, project access and the like to turning a user off altogether--immediately. There is nothing like the real-time control of a web-based system.
The control afforded by a web-based system is a significant advantage, but not the only one. Consider how data must be compiled when it is received as a spreadsheet or paper invoice. While there are clever ways to automate the process as much as possible, it is still largely a manual process and highly dependent on human review or “error checking”. This process is slow, prone to errors and therefore expensive. With a web-based system, error-checking is done during data entry, greatly minimizing the need for data cleanup. Of course, if a user simply enters an incorrect amount or selects the wrong project or AFE, there is not much that can be done about that, at least not from an error checking standpoint. Web-based systems also make it very easy for the user to attach images, generally receipts, to the specific billing item.
Also consider that the data and images are already compiled and ready to be processed, because all of the data and images are already on the same server. No need for spreadsheets and emails. With a well-designed system, an authorized user can either stop there, export the data and import into an accounting system, or go on the create the actual client invoices as a feature of the application. Finally, a web-based system should allow a brokerage to bill its client through the system, allow the client to receive, inspect and approve the invoice all without the need to print or mail anything.
Finally, web-based systems as a rule do not require software to be installed on the user's computer, and provide hardware redundancy (for maximum uptime) and data redundancy (multiple backups spread across multiple locations). Referring back to the build or buy question, this is simply too costly for almost all individual brokerages to do economically.
Now is the time to implement a quality, web-based billing system. When things get busy again (and they will), the golden opportunity to become more efficient will have passed.
We at TotaLand have seen dramatic improvements in the lives of our clients, reducing billing turnaround, accuracy and, of course, costs—dramatically. How much is that worth to any organization, particularly one trying to remain competitive in a difficult environment? If your organization is not utilizing such technology, come visit us at booth 2552 next week at NAPE Summit, or give us a call at 800-465-5877.
As we approach NAPE next week, we will be posting more articles about how brokerages can become more efficient, and therefore more competitive. See you at NAPE!
Bill Justice – Founder / President, TotaLand Technologies