While the promise of a truly paperless office is still many years away, property management companies are getting one step closer through document management applications.
Document management software stores, tracks, and retrieves electronic documents (and scanned images of paper documents), centralizing the many files that property management companies traditionally stuff into filing cabinets.
In the past, many companies struggled to find the space for the various rental applications, leases, work orders, and income verification letters, to name a few. But now, some multifamily companies are beginning to scan lease documents and shred the originals. And since electronic signature technology is gaining more traction, many lease documents never actually get printed.
Document management technology not only cuts down the time and costs associated with mailing or retrieving documents, but it's also a great disaster recovery tool, since all of the documents are hosted off-site by the software provider itself.
All of the major property management software companies, like Yardi, RealPage, and Intuit, offer a document management application within their software suites. And some, like Domin-8, offer document management solutions that are application-neutral— they work independent of a property management software platform.
The technology is gaining traction among multifamily operators, but it's still in the early stages. The technology's adoption will be helped by the fact that more information is coming to property management companies in electronic format, such as credit card checks, background checks, and other screening services, as well as electronic statements from banks. And since electronic signature technology is becoming more common not just on leases but also on work orders, the next logical step is to keep all of those files organized in a virtual filing cabinet.
But at least half of the accompanying lease documentation is still in paper format. And at many companies, the same document is often copied multiple times, sometimes being stored in different filing cabinets, leading to confusion over which is the original. With document management software, whatever resides in your system is the final document.
Since much lease documentation is in paper format, every major document management application has a scanner function to allow users to scan documents and convert them into electronic files like PDFs.
RealPage's OneSite property management software introduced a document management system in mid-2007. Since the initial rollout, the company has added an electronic signature component. Electronic signatures allow tenants to sign leases through their computer, sometimes just by clicking an “I accept” box. The Electronic Signature Act was signed into law in 2000, making an electronically signed lease legally binding and admissible in court.
RealPage has upgraded its system this year. In March, the company added barcode scanning functionality to its document management system, allowing property managers to bulk-scan documents assigned to a specific tenant, which are automatically filed when scanned.
In the past, this was a two-step process: first scanning, then manually assigning the electronic document to a certain file. With barcode scanning, users assign barcodes to a certain resident or service provider. The user then could bulk-scan large amounts of paperwork into their system (as opposed to one piece of paper at a time), and that paperwork would be automatically filed into the property management software.
In June, RealPage integrated its e-signature technology with lease forms from Blue Moon, a software company that provides lease document templates to the National Apartment Association. Many smaller multifamily companies rely on these templates. In the past, apartment operators had to access Blue Moon's system and key in information, but those using RealPage can access the documents and store them through OneSite.
And since the document management system is integrated with OneSite, it has workflow management capabilities: If a lease application is incomplete, the system will stop it from proceeding.
Domin-8's document management system, i-Doc, is application-neutral and has been on the market for more than three years. Those using any of Domin- 8's diverse software offerings, such as RentRight, Tenant Pro, and Spectra, can also use i-Doc, but so can those using Yardi or RealPage. This neutrality is helpful when a third-party management company wants to share financial statements or marketing plans with owners. Nobody has to log into the accounting system or property management software to share these documents online.
Since it's not strictly tied to property management, i-Doc is also used for storing and sharing corporate or HR documents such as timesheets and 401(k) plan forms. And i-Doc can be tweaked by Domin-8 to target the needs of developers, who may want to share insurance documents or site plans with development partners.
Domin-8 does two major upgrades a year to i-Doc, and this year added a search function that corrects misspelled words (i.e., “Do you mean X?”). And Domin-8 has integrated other types of media into i-Doc. Its newest version allows users to run media files in i-Doc documents, such as training videos from YouTube.
Both Domin-8 and RealPage are developing retention-specific features, where users specify how long an electronic document should exist, for a rollout next year. In affordable housing, some federal laws require certain documents to be retained for a 15-year compliance period, and no longer. And market-rate owners end up compiling scads of personal information, like background screening information, credit card information, and banking records, which become a liability if they hold onto it longer than needed.
As document management applications grow in sophistication, adoption should also continue to grow. Stay tuned.