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12 things to check for in a security deposit automation solution
Manual security deposit management processes leave your company vulnerable to missing regulatory deadlines, paying duplicate refunds, and missed charges/deductions. With refund automation software, properties can streamline processes and provide better transparency and service to residents while saving their site and accounting teams hundreds of hours per year. Check for these 12 things in a security deposit automation solution.
When you consider security deposit automation solution, make sure you evaluate the solution for the following:
Because security deposit requirements vary by jurisdiction, you need a vendor who can tailor the platform to your requirements. Your requirements may include unit transfers, lease signer changes, pet deposits/ESAs, deposit holds and forfeitures, and unapplied credit refunds. You may also need regulatory compliance features like notifications, interest accruals, and return deadlines.
- Security and fraud detection and prevention
Ensure that your security deposit automation solution includes features like SSL encryption and is SOC-2 Type II compliant and PCI-certified for credit cards. The platform should also have built-in fraud detection, such as identity verification, funds verification, and controls for matching the resident’s payment/refunds (e.g., ACH and Credit card).
Your security deposit automation software should offer automatic sync for your property management system, including bi-directional data. Not only should the platform manage processes based on detected changes in events, but it should also write-back to the ledger.
- Ease of use in the security deposit automation solution for you and your residents
Security deposit automation software should be intuitive and easy to use so staff and residents can quickly understand roles and processes. Take a demo of the software you’re exploring to ensure it’s easy to use for your residents and easy to learn for your team.
- Advanced payment system
Residents expect more flexibility than money orders and checks. Digital payments are also better for the property—they’re faster, present less fraud, and are cheaper. Look for security deposit automation systems that support ACH processing, credit card, money orders, cashier’s checks, paper checks, and virtual card/real-time disbursement. Payment types allowed vary by jurisdiction, so ensure the payment system is configurable at the property level.
- Print and mail APIs
Most jurisdictions give residents the right to receive (or require) a printed and mailed check and deposit accounting statement. Your security deposit automation provider should include a full-service function for 1st class mailed refunds, including an SLA for meeting tight deposit return deadlines.
- AI to manage smart alerts and reminders
The security deposit refund process is fraught with errors, and a property can unintentionally overcharge, miss a deadline, forget to itemize in full detail, or attach receipts. Look for a refund authorization system with built-in smart reminders and alerts to help guide your team and minimize human error.
- Interest accrual and payout as part of your security deposit automation solution
Every modern security deposit automation system should come with banking operations for storing deposits, accruing interest, ledgering, and disbursement to your residents as required by law (annually or at move-out).
- Deposit accounting statement creation and mailing
Nearly every jurisdiction requires residents to receive a detailed, itemized statement of charges and deductions and the resulting calculation of their security deposit refund. Look for software that presents this detail, descriptions, and receipts to all lease signers in multiple formats—app, email, and mailed statements. Read 10 security deposit management mistakes to avoid.
- Resident support for the life of refund
Roost customers report 20% of security deposit refunds return or go uncashed. Look for a vendor that includes tier 1 support for residents, including refund inquiries, re-issuance of checks, unclaimed property tracking, and more.
- Deposit reconciliation reporting
Your property management system should always serve as your source of record. However, additional reporting is essential and can significantly reduce time-to-close with deposit reconciliation reporting to ensure ending property and deposit bank balances match at the end of a particular accounting period.
- Automatic, time-stamped audit trail
Business leaders and external stakeholders may want documentation to improve the effectiveness of the payment process. Ensure that your security deposit automation solution keeps complete and detailed documentation to simplify future audits and inquiries.
How Roost’s refund automation software can help
Streamlining your security deposit workflow automation can lower stress levels throughout the site and AP department while improving your metrics, saving you time and money.
It also provides an agile, scalable refund pay process that can flex with peak move-out seasons and grow with your business.
To see how Roost can help you implement refund accounts payable process improvements that your AP team, approvers, and residents will love, request a live demo or start your risk-free trial today.