Commercial Real Estate Firms Keep Focus on Operational Efficiency

Key takeaways:

• Paper checks remain costly compared with electronic options. The median cost to issue a paper check is typically $2 to $4, while ACH payments often cost about $0.40.
• Automation materially shortens invoice cycle times. Top performers approve and schedule payments in ~2.8 days, while less efficient teams take a week or more.
• Fraud risk persists. The typical organization loses ~5% of revenue to fraud each year, with a median loss of $145,000 per case.
• Flexible work is now an expectation across finance and CRE partners. About a quarter of paid workdays in the U.S. are worked from home, and around half of remote‑capable roles are hybrid.
• Fifth Third can help CRE firms automate payables end to end. And in turn, improve supplier engagement and optimize working capital without disrupting bank relationships.

Why are commercial real estate (CRE) firms turning to automated payment solutions?

Commercial real estate companies continue to feel the economic effects of higher operating costs and tight labor markets. To offset these pressures, many firms in industrial, multifamily and hospitality are tightening expenses and looking for ways to increase efficiency through automation.

CRE firms often rely on manual, paper centric and decentralized payables processes. That approach adds avoidable cost and time. For example, the median cost to issue a paper check is typically $2 to $4, while ACH payments commonly run about $0.40 according to the Association for Financial Professionals. Making such managed payables changes greatly impacts CRE operational efficiency and cost-savings.

When it comes to commercial real estate operations, automation substantially shortens invoice cycle times. APQC data cited by CFO.com shows top performers approve and schedule payments in ~2.8 days, while bottom performers take a week or more.

Addressing common challenges

With manual processing pain points and increased pressure to reduce expenses, CRE firms are moving to automated payment solutions that address three principal challenges: managing multiple entities, legacy processes and hiring and retention. Here is a look at those challenges and how they can be resolved.

CRE challenge #1: Managing multiple entities

Many CRE firms operate across regions and manage multiple single purpose entities or LLCs. It is common to have dozens of operating accounts to separate ownership and mitigate asset risk. That structure demands careful controls to avoid commingling and can result in cumbersome payment workflows.

“For firms that are still managing payables manually, the pain points, inefficiencies and the likelihood of human error and fraud grow exponentially,” said Adam Keck, director, product management at Fifth Third Bank. He noted that the typical organization loses about 5% of annual revenue to fraud, with a median loss of $145,000 per case, according to the Association of Certified Fraud Examiners.

CRE challenge #2: Legacy processes

“Developers are often family run firms where the patriarch or matriarch in the past insisted that every invoice crossed their desk so they could view it and authorize it,” said Eric Heuser, senior vice president, National Commercial Real Estate Treasury Management at Fifth Third Bank. “Those decision-makers are changing, and their expectations and acceptance of digitization have dramatically increased.”

Across real estate organizations and their stakeholders (such as contractors, vendors, tenants and investors), digital workflows are now baseline expectations. Hybrid and remote collaboration have stabilized, which reinforces the need for cloud-based automation and centralized visibility.

CRE challenge #3: Hiring and retention of employees

The CRE industry’s new generation of personnel expects cloud-based automation. Firms that offer flexible, modern tools have an advantage in attracting and retaining talent.

The broader labor trend supports this. About a quarter of paid workdays in the U.S. are now worked from home, per the U.S. Survey of Working Arrangements and Attitudes tracked by the St. Louis Fed. Hybrid flexibility has stabilized around half of remote capable roles, per Gallup’s latest reading.

For additional perspective, the Bureau of Labor Statistics reported 22.9% of people at work teleworked during the first quarter of 2024, underscoring the prevalence of flexible arrangements across the U.S. workforce.

The case for modernization

These hurdles underscore a common theme: the need for modernization. As CRE firms navigate these pressures, they must shift from reactive fixes to proactive strategies that prioritize automation and scalability. Moving from manual, fragmented workflows to streamlined, automated systems is no longer optional; it’s a strategic imperative for efficiency, security and growth.

How can CRE firms prepare to change to payables?

Embarking on a wholesale change to payables can be a significant undertaking. Here are steps to help your company navigate the process:

1. Determine decision‑makers who need to be involved.
2. Analyze deficiencies and inefficiencies in the current payables process.
3. Define desired outcomes and how you will measure success.
4. Establish a timeline with a “go date” and interim milestones.
5. Identify required resources and roles to achieve the objectives.
6. Plan change management for internal teams and external stakeholders to communicate and transition smoothly

How can firms identify the right payable solutions?

In many cases, for CRE firms seeking to overcome legacy payables issues, the right approach is to convert paper invoices and checks to digital workflows. That can include electronic invoice capture and software integrated with a client’s current systems. This approach helps many clients materially reduce processing costs and cycle times.

Fifth Third Bank offers a robust set of payables solutions from end-to-end process automation to working capital optimization tools. Fifth Third works with firms to design solutions that unlock efficiency without disrupting operations, existing business or banking relationships. Clients can continue to utilize multiple banks and still gain the efficiency of having a single payables bank. To learn more, find a relationship manager.