Increase revenues without increasing rents

RUBS Billing Services ImageMany apartment owners and property managers are curious about how Ratio Utility Billing Systems (RUBS) are used to calculate resident water and sewer bills. This article includes two videos that explain how to calculate a RUBS water/sewer bill for up to ten (10) apartment units. It also includes a complimentary spreadsheet you can use to make the calculations.

Instructions for using the spreadsheet are written below. Please note that AmCoBi assumes no liability for your utility billing operations or the calculations made with the RUBS Billing Worksheet. Contact us if you have any questions.

 

Video – How to Calculate a RUBS Water/Sewer Bill – Part 1

 

 

Video – How to Calculate a RUBS Water/Sewer Bill – Part 2

 

Download a FREE Copy of the RUBS Billing Worksheet

We include an Excel spreadsheet (RUBS Water Billing Worksheet) that will make the billing calculations for you. Click the button below and subscribe. In the future if we make changes to the Worksheet, we’ll notify you.

How to Use the RUBS Water Billing Worksheet

This worksheet is configured for a 2-10 unit apartment complex. Enter information about your residents and your master-meter water/sewer charges, and the spreadsheet will calculate the bills. The RUBS water/sewer calculations are based on occupancy so make sure these figures are accurate.

Before you Start Billing Residents, Some Things You Need to Know

The first video covers these topics but it’s important to know that different states, counties, and cities have specific regulations for utility billing and submetering. You, as an owner, are responsible to know the rules before you bill your residents.

In Texas as an example, the Texas Commission on Environmental Quality (TCEQ) has defined regulations for how tenants can be billed, what deductions an owner must take, what billing fee can be assessed, and more. In contrast, Colorado allows RUBS billing with very few limitations.

To learn the rules, contact one of the following:

  1. Your State’s Public Utility Commission
  2. Local National Apartment Association (NAA) Affiliate – http://www.naahq.org/about/join/Pages/AffiliateDirectory.aspx
  3. A third party utility billing services provider.

Make Sure you Have a Signed Lease in Place

You’ll need a lease signed by your residents authorizing utility billing. If your current lease doesn’t address billing, draft a lease addendum and encourage tenants to sign it. You may have to implement the lease as tenants renew and/or when new residents join your community.

You can download a sample lease addendum here:

http://amcobi.com/wpmf/2011/multifamily-owners-including-utilities-may-be-killing-your-profits/

Assuming you have met the criteria for billing residents, let’s discuss how to use the RUBS Water Billing Worksheet.

Step #1 – Account Information Tab

  1. Click on the Account Information tab. Note that you can only modify cells in yellow. The cells with white or gray backgrounds cannot be edited.
  2. Enter information about your residents including:
    • Account ID (if you use one)
    • Resident Name
    • Address
    • City
    • State
    • Zip Code
    • # of Occupants
    • Utility – what you’re billing residents for
    • Bill Mailed – the date you are going to mail these bills
    • Due Date – the date bills are due to be paid.

Step #2 – RUBS Calculator Tab

  1. Click the RUBS Calculator tab.
  2. Enter the amounts from your master-meter water and sewer bills at the top.
  3. If you want to include a Common Area Deduction (CAD), enter a percentage in these cells.
  4. The Amount to Allocate figures will calculate automatically.
  5. Enter a Bill Start Date and Bill End Date. Use the same dates listed on your master-meter bills.
  6. If you want to include a fee on each resident’s invoice, enter that value in the Billing Fee column.
    • The billing fee is an administrative charge assessed by owners or billing companies for costs associated with calculating, printing, and mailing bills. It also helps defer the expense of processing payments and accounting for all financial transactions
  7. The Totals will calculate automatically.

An Explanation of the Calculations

  • The Total Bill Days column is calculated by counting the number of days between the Bill Start and Bill End Dates
  • The Occupied Days column is calculated by multiplying the number of occupants by the number of Total Bill Days for each account. This is how occupancy is factored into the RUBS billing equation

Printing and Mailing Resident Utility Bills

If you are familiar with the merge capabilities of Microsoft Word, you can create an invoice and use the RUBS Water Billing Worksheet as source data (Select Recipients) to individually populate bills for each of your residents.

If you use Quicken, QuickBooks or some other accounting package, there are ways to import the billing amounts we calculated into your customer accounts, and print invoices from there.

After you’ve sent bills to residents, you’ll want to log who you’ve billed and for what amounts. Highlight the billing information on the RUBS Calculator tab, copy the data, and use the Paste Values command on the Billing Record tab to save your data.

Important Items to Remember

Calculating RUBS charges is really the first step when billing residents. You still need to print and mail the bills, process payments, and record all financial transactions. You also need to be available to answer your customers’ questions when they call about billing issues.

For smaller multifamily complexes, this process can be straightforward and easy. As the number of bills you’re sending each month increases, billing companies like AmCoBi, can manage the process on your behalf saving you considerable time, effort, and money. Moreover, third party multifamily billing providers offer enhanced services that your residents are sure to want such as: electronic billing, online payments, and Web-based access to their account information.

Quick Recap

Implementing a resident utility billing program is one of the fastest, most affordable ways for multifamily owners to increase revenues without increasing rents. Make sure your property is master-metered and that you’re paying the utility costs. Find out if RUBS billing is legal where your apartment complex is located. Have all your residents sign a lease authorizing utility billing.

Best of luck with the process. It’s sure to have a positive financial impact on your multifamily property!

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