In times of Financial recession

I read and read and read on here, Our association is having this or that collection problem. Our MC doesn't do this or does that. And many questions about self managed associations. Here is my personal opinion and take on the issue. Read with an open mind, as this may offend some. If so, don't start with your hollier than thou diatribe. Not one of us has a better opinion than another.
A MC /CAB /CAM makes money from poorly educated people.
With the proper software, the entire collection process can be done up to the filing the liens. The estoppel letters can be automatically generated as well.
Filing liens in some states require attorney to file and some do not. I have seen were the right software automates the majority of the "Office" work. I have seen what MC /CAB /CAM s do in an office environment. And they basically shuffle paper. People stick their heads in the sand and ignore the power of a good piece of software to automate their office.
Since we went to our solution, the self managed BODs spend less than 4 hours a week tending to issues. Collection rates are up, we have collected more money in the past 2 years than in the entire history of our association. We have collected past due fees from Banks because the liens are processed in a quick and efficient manner, and with stand foreclosures. With the financial state we are in, our system notifies us of property sales and ownership changes quickly with alerts. The transitions between BOD members and committee members is quick and efficient due to the system.
All over the net software automation is one of the top discussions, as it applies to Association Management. Heck, once a good system is setup and in place, the A/R side of the office can be 99% automated.
We spend $125 a month or $1200 a year for the software and it generates us approximately $6000 a year in additional revenues, not to include the savings.
Why an association needs to be managed by a MC is beyond my understanding. BTW, We generate additional revenue that is used to improve those pork fat projects by advertising on our website, as we have a targeted audience.
In times of financial recovery, thinking outside the box to offset needed revenue is a must. MCs and most BODs think, we can just raise the dues. These people need to be thinking that a lot of us, me included, are having difficult times and have our own budgeting crisis. Get out of the peoples pockets and find alternative sources by cutting cost, automation, generating revenue through improved collection practices, advertising, estoppel letters and reduce legal fees. Increase proficiency and reduce redundancy.
Get automated to help your association, get into the 21st century. You can even require the MC, if you choose to keep them use a system like we have and that will force them to reduce their fees and provide the owners security, transparency, accountability, and flexible payment methods. That has helped us a lot also. Allowing the Owners to make payments on their terms, has helped us a lot in reducing uncollected fees. We went to an annual billing, they pay as they want, weekly, monthly, however they choose. they know they have to pay $XXX.XX dollars within the 12 months, or we will lien. We collect the $150 Legal fees that we are entitled to and that goes to pay our attorney when we need his assistance.

Wake up people!

Tim you state;
"The claim of any software or company generating "additional revenues" for an association I just don't buy. The software might be assisting the collection of past due assessment payments but that's not additional revenue. That is just collecting money owed. If the Association is expending funds to collect money owed, that is (in reality) a net loss or, as some would say, the cost of doing business."

Let me explain how I say generates revenue. First, we are not discussing savings, which if you save the money your association is spending, is "Making Money"
Cash either comes in or goes out, Period! But, that is another discussion.
But, do you honestly think that a MC / CAB makes it's money off just the contract. That is naive to think that. They make their money from legal fees, estoppel letters and generating letters. If you remove that ability from them and place that money into your associations coffers, that is generating revenue. Selling advertising on the website to a targeted audience is generating evidence.
If you create liens, which usually cost on an average $150 from the MC / attorney, and put $100 of that back into your coffer is generating a $100 revenue.

Example, we mailed 42 "Demand for payment" letters, which also states we intend to lien on the past due properties. They must be mailed first class and certified with return receipt w/ signature. Cost $7.30. The price charged to the member, is $10 per our documents as part of the "Administrative" fees. Cost $532.90, charged $730 = net revenue generated $197.10. Anything above the cost of doing business is generated revenue.

When the liens were filed (42) cost was $2100, charged to owner's accounts $6300, net revenue generated $4200.
We generate about $2000 by selling advertising space on our website.
Now, I agree, we could probably do that IF!! we had volunteers that were willing to spend 100 hours or so of their time to do this manually.
But, since the site has the software running live in the cloud 24 / 7 that does all of this, the only issues the BODs have to focus on is to deal with CC&R violations and questions for the BODs. All our documents are online. We also generate revenue by estoppel letters. The MCs use to collect that money. But, the software generates that on demand and we put that money in our coffers. So, maybe "generating revenue" is subject to interpretation. But, the software is doing it automatically on demand. And we are not paying the large fees and losing that revenue to a management company.
If you do it manually, then "you" are generating the revenue". So what would you call it if the software is doing the office work automaically and generating the revenue.
The point is multi faceted, but primarily I am saying there are other ways to generate revenue as well as increase your bottom line through other avenues, other than digging more money out of the all ready strapped owners' pockets.
As always, I respect your opinion and enjoy conversation Tim.

Charles,

I agree that selling advertising on the Association website would certainly be generating revenue. I stand corrected there.

As for the costs of collection, I believe it's a case of perspective. My governing documents limit fees associated to the costs of collection to the actual costs incurred. Therefore, If we paid a lawyer $1,000 to send letters to collect the assessments or paid a company $500 or wrote the letters ourselves for around $10(including postage), we are limited to only adding the actual costs incurred back to the member. Hence - no generation of revenue but just a decrease in the cost of collection.

VA law actually limits the fees that may be charged for disclosure packages and for a financial update (estoppel letter).

One thing you did elude to is that the face of communication and methodology of doing business is changing. It has changed from letters to e-mail and I think over time, as the ownership of houses transitions from generation to generation, that e-mail will give way to twitter or facebook (or the next big social network site). Using cash changed to using checks which is changing to electronic fund transfers. Associations who start using the new technology sooner, rather than later, will probably be better off.

Charles, I also respect your opinion and have noticed that you are always willing to discuss the merits of a post instead of the way the post is presented. Thank you for that.

Tim

Tim Writes "My Association actually uses an independent contractor for bookkeeping services (checking the mail, tracking payments, depositing checks). This frees up some of the time while minimizing the costs. We find this works for us just as the company providing software and services works for you. "

Our software basically does this bookkeeping service. There is the manual issue to check mail and deposit checks and etc... They do offer a lockbox solution for the financial end, i.e.. receiving and depositing checks.
The software does free up the time for the BODs to address other issues in a timely manner.
I wonder what the cost of the bookkeeping service cost vs. the software cost.
Mind you, we are approximately 2000 units, which makes it virtually impossible to keep up with the dues and fees owed and paid.We were paying 2 people 40 - 60 hours a week to try to run the office daily. We paid them approximately $18 per hour, which was $1440 a week minimum. We pay $1200 a year for the software, plus any hard cost of mailing, which we were already doing. Net savings per year is approximately $73,680 in personnel cost alone. That went back to our budget, thus generated a previously un-realized increase to our budget, allowing us to not raise dues or assessment fees to recover that money.

As far as other fees, the only fees they charge us is hard cost of mailing service and if we opted to use their lockbox technology, which is hard cost for them. I am sure they make a little off those features. I never asked. I do agree that anyone seeking any service should read the contract and read the fine print.

The bottom line is, in times of financial hardship, there are ways to increase the the budgets, without placing a larger financial burden upon the members that are paying on time. Also, flexibility in payment options, interest on late payments, etc... are all options a good BODs should be reviewing to help relieve the financial hardships in their association.

Thanks for your kind words.

We sell advertising to Realtors, Real Estate attorneys, financial institutions, Insurance companies, and local businesses like a local Hardware store, a local car dealer, a couple of restaurants @ a $100 a year, they get a targeted audience and get about 35,000 hits annually. They think it is a good deal and so do we. so, 20 small adds, nothing flashing and dancing and good taste @ a $100 a year with this traffic flow, provides us a little more money and a little relief. And the $100 is a small amount of $ for advertising per year.

Another thing we do is raffle tickets to dinners and weekend getaways. That generates a little extra income and we sell them on the website to the home owners on almost a monthly basis. I guess some of these things we do generates interest with our owners as well.
We are involved in raising money for local charities. This month, we are raffling a ghost tour in St. Augustine Fl. for the owners, with a weekend bed and breakfast 2 day one night. Our cost with the dinner is like $250, we have raised $500 thus far. 50% of the profit will be donated to a local charity, I think this month is being donated to Autism research, Last month we donated about $200 to the Masonic Medical Research facility for research in cardiac research.
It is not about the software that we use, as much as what I am trying to get out to the associations is find the tools that help cut cost, raise awareness, and use these tools to keep interest in your community and generate additional revenues with creative thinking to help reduce the burdens of relying solely on the dues and fees from the pockets of your fellow association members.
Our software is bundled with a website that has a public side, and a members only section. It does our A/R bookkeeping, our billing, demand for payment letters, and lien processing and all mailing automatically. Everyone now realizes the BODs do not have any control over the billing, late fees or the liens. Everyone knows it is automated. The BODs can take a petition and vote to reduce / remove the lien on a case by case basis. But, they have to do that manually within the system. The BODs have made, circulated and made a resolution to the criteria the owner must meet before consideration is made.
Harmony being the secret to all societies, we try to keep people harmonious, our neighborhoods involved and active. We have three parks and next week we begin our Oktoberfest festivities, ending with Halloween activities in 3 parks for the children. We are doing this like we use to in elementary school with the fishing booth, the cake walk, bottle ring toss, and some other stuff. I think this year the fee is $10 per family. Cakes are donated from the local groceries bakery as well as some of the other things. The local grocery deli has allowed us to by the fried chicken at cost and are frying it for free. We have these events sponsored by the local businesses. We expect over a 1000 people to be out and participating. And it is not just open to the owners. we open it to the public as a form of letting the local community see what we have to offer in our home owners association. Just some ideas for you association to think about. November, we are having a Thanksgiving dinner in one of the parks. We request the RSVP and we ask for donations from the owners as well as the local businesses.
Thinking out of the pockets of the owners and reach out to other sources of revenue will not only help bring your community together. But, it helps to keep your community together.
This is some of the things we do, I hope it will help your Association.

I would like to hear if other people or associations have "creative" methods of generating revenue for thier association's coffers! Other than to keep reaching into the members pockets.