TAG Immobilien AG focuses on virtual accounts

Many companies have to manage thousands of incoming and outgoing payments every day. That constitutes an enormous administrative effort. This is where so-called virtual accounts can help: They enable the efficient management of payments, reduce complexity and lower the risk of accounting errors. As a client of Hamburg Commercial Bank, TAG Immobilien AG uses virtual accounts with great success in the management of its residential real estate. The company’s tenants transfer money to their individual virtual account. Third parties such as electricity or water suppliers also draw the money for their services associated with a property directly from this account. In this way, all the payments are simply and quickly made, errors are avoided and the entire accounting process is optimized.

The listed company managed more than 88,000 residential units at the end of fiscal year 2021. The main offices of TAG Immobilien AG are located primarily in the north and east of Germany, in Greater Hamburg and Greater Berlin, in the regions of Salzgitter and Thüringen/Saxony, and in North Rhine Westphalia.

In order to optimize bulk incoming and outgoing payments, while at the same time the residential portfolio was rapidly expanding, the company finally found a solution in “virtual accounts”. “A virtual account is an account that can be used normally with an IBAN and BIC but is not open in the banking system,” says Stefanie Buhtz, Head of Department in the Cash Management Sales segment at Hamburg Commercial Bank. Today, TAG holds just under 20,000 of these accounts at Hamburg Commercial Bank.

“The bureaucratic effort for such a large number of contracts and payment transactions with monthly incoming payments by tenants and outgoing payments to water and electricity suppliers is immense,” says Ulrike Bondkirch. The authorized signatory [Prokurist] heads the Financing and Payment Transactions department at TAG. It was not so long ago that all the tenants transferred their rent to just one account. These days, with almost 90,000 residential units in its portfolio, this would be virtually inconceivable. Otherwise, countless employees would take days to check whether all the tenants have paid the right amount and on time.

The use of virtual accounts changes nothing for TAG’s tenants. They each transfer the rent to their individual virtual account. This makes it very easy to see whether the correct amount of rent has been paid, on time and to the right recipient. Bundles of virtual accounts are each assigned to the same real account, however. This means that the transactions taking place in the virtual accounts are also credited to or debited from the real account. The payments are automatically assigned in financial accounting through the electronic bank statement notifications.

“Virtual accounts mean that our company saves an enormous amount of time and thereby saves significantly on costs.”

The virtual accounts bring only advantages for the clients of Hamburg Commercial Bank. The automatic assignment of payments optimizes the accounting system by automating entries and assignments making them quicker and easier. “Virtual accounts mean that our company saves an enormous amount of time and thereby saves significantly on costs,” confirms Ulrike Bondkirch.

“There is a one-to-one relationship and 100% assignment,” says Stefanie Buhtz, identifying the main advantage of virtual accounts. As a result, accounting errors and searching for amounts are things of the past.

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