The questions seem simple enough: Who are you paying? How are you paying them? Who are you collecting payments from, and how?
Yet, as most multifamily affordable housing owners and operators will tell you, answering those questions is seldom simple or easy.
Cash management and accounts receivable/payable is a rolling challenge—especially amid widespread disruption, like a global pandemic. Knowing with precision what your cash position is at any point in time requires exceptional reporting methods. This is all the more true when receipts are arriving from all sorts of directions, such as:
- Money orders;
- Payment subsidies from local, state, or federal sources; and
- Wire transfers from funding sources.
Justin Jennings understands the challenges that affordable housing owners and operators face. His role as head of treasury services at JPMorgan Chase for Community Development Banking gives him insight into next steps and opportunities.
To solve these common challenges, Jennings recommends focusing on what banking partners can offer, specifically what treasury service assistance they can provide. Jennings says look for these benefits when evaluating partners:
Certainty of Execution
Your banking partner needs to understand how cash moves in and out of your organization. If there’s a need for more working capital, what steps can be taken to collect payments earlier or send payments out later? Do you have the liquidity to consider taking on a new project? That level of understanding ensures certainty of execution when a closing payment may be at stake.
Banks typically have a wealth of resources that provide informed perspectives on where rates are going, the course of the county, state, or regional jobs outlook, or newly enacted or pending legislation. All of these trends could have a direct impact on your affordable housing development plans. Jennings advises that you should expect proprietary research and market information from your bank treasury team to leverage in operational planning and management.
Jennings’ team isn’t the first treasury services group dedicated to multifamily affordable housing. “I wouldn’t say we’re the unicorn,” Jennings explains. “But JPMorgan Chase’s recent $30 billion commitment presents an unquestioned scale and depth to serving the affordable housing community.” For your own purposes, make sure that your bank’s treasury services group has the industry grounding required to advise you, free of other business sector distractions.
Automated Processes and Customized Tools
It’s not easy to manage rent payments from disparate sources. A treasury services team should offer tailored technology that Jennings says “has the ability to deliver real-time reports that itemize payment details.” For example, Jennings’ group is readying customizable rent collection technology specifically designed to serve the interests of multifamily affordable housing developers and operators.
It’s a matter of JPMorgan Chase policy to offer treasury services consulting at no cost to clients. Jennings knows some organizations may decline treasury consulting assistance because of an expected fee. That shouldn’t be the case. “Owners and operators should have a strategic perspective on the best ways to finance their projects and how to best leverage working capital,” he says.
Businesses ought to embrace the opportunities that treasury services present. Consider banking partners with the talent, resources, and commitment needed to transform your treasury functions into a strategic business asset.