In the homeowners’ association (HOA) vertical, more than 70 percent of property vendor payments are still made via paper check.
Granted, it’s a highly nuanced vertical, so building a solution to automate those payments is complicated – it must be configurable to each HOA’s individual rules. However, not automating could be even more of a hassle as the rest of the world transacts faster and faster.
HOAs that require board member signatures to approve payments, for instance, can see significant delays in paying vendors when they must collect paper signatures. If one board member splits time between Florida and Boston, it can hold up approval until that person is available to sign.
Michael Praeger, CEO and co-founder of AvidXchange, said it’s high time – nay, past time – to bring automation to the HOA space. The FinTech automates invoice management and payment processes for several HOA management companies today, and its recent partnership with Bradenton, Florida-based Premier Community Bank will build on that, Praeger said.
The multi-year partnership will serve Premier Community’s HOA management customers by creating access to AvidXchange’s accounts payable (AP) automation and payment tool, which Praeger said can alleviate some of the worst delays and challenges in the vertical.
But it’s not just about enabling electronic signatures and approvals from HOA board members who are wintering out of town. Praeger said AP automation also helps to increase security and – perhaps ironically, since HOA managers are letting go of manual control over payments – creates greater control around paying bills.
Praeger explained that HOA customers have their own individual legal entities and requirements for managing invoices, unique to each association – which, he said, is partly why automation was seen as too complicated in this vertical. Not every HOA requires paper signatures for payments approvals, but they all require something unique and challenging, so any solution must be adaptable to these needs.
Of course, HOA is just one of many, many nuanced verticals that stand to benefit from AP automation.
Praeger noted that construction is challenging, because a lean waiver from the subcontractor must be received by the general contractor before he, in turn, will want to pay his own bills. Real estate can also be difficult, because a manager who operates 300 office buildings around the country is going to have individual bank accounts and approval processes for every single one of them.
That, said Praeger, is why AvidXchange focused on configurability when mapping its go-to-market strategy. Everyone wants money to move faster, and most are ready to bid paper checks good riddance – but getting there will look a little different for every organization.