Assetsoft - Blog #Budget

Budgeting vs. financial forecasting - Why Do You need both for your business?

Fri, 02 Dec 2022 20:35:54 -0500

Budgeting and forecasting are methods that businesses and company executives employ to decide where the business should be headed. It is the base for a future growth plan or the next step in business. Setting a budget as KPI also helps businesses understand whether they are on the right track with their business or if they have transgressed along the way. This opens up opportunities to rectify mistakes and plan the next steps forward.

Companies can predict their future financial performance better and have an idea if they will overuse their budget. But market research by Clutch says that more than 50% of small businesses did not make a budget in 2020. But other research says that only a budgeting plan can help companies keep track of their expenses and also be aware of their financial conditions. The companies that do make an official budget also sometimes exceed it - because of under forecasting.

When the two things come together cohesively, only then can a business move forward. Read this blog to know their key differences and similarities and how these two can help your company’s growth. https://canadahustle.com talks about how businesses can use cash or accrual method of accounting.

Are you Budgeting Properly?

If employees do not know what budgeting is, then overspending beyond the company’s capacity becomes very easy. When you do budgeting, it acts like a yardstick to measure progress; without it, the whole financial system of a business can crumble.

How can you properly conduct the budgeting process to ensure your finances and employees are aligned on the same track?

Your budgeting process should ideally have inputs from all departments and business stakeholders to ensure it is a practical financial plan and not just hypothetically perfect.
Ensure that your budgeting plan has enough funds for risk management and unforeseen situations in business. That is what makes for the most practical budget. You can easily make a budgeting plan with a lot less money if you omit these.

But you will have no safety net to fall back on when unexpected situations arise. This should be a contingency for bad days and should be constant in all financial planning processes.

What is forecasting?

Forecasting is more of a future prediction for the company and its progress based on various data analysis reports. Forecasting is where company executives and accountants come together to look at the company's budget. Then they tally it with previous data and market research to predict if the company will reach its target.

When you do forecasting, if you see that the budgeting process has become unrealistic and take a closer look at all the data, you can inform your team. This makes the revaluation of the budget much easier. Forecasts can be short-term and long-term, depending on the strategy and leadership body and company goals.

What are the key differences?

The budgeting process is mostly static, and forecasting are dynamic.
Budgeting acts as a business KPI, and forecasting mostly work to predict the financial future.
The budgeting process can function individually without the forecasting part. But forecasting always needs to look at the budget to make better predictions.
Budgeting plan is for a specific period of time, whereas forecasting can be done as often as the executives decide. Forecasting can constantly keep reevaluating and analysing the budgeting plan if they feel the need.

How do budgeting and forecasting come together?

A company can still function with just a budgeting plan, even if it does not do a forecasting plan and analysis. Why? Because the budgeting process is independent and can function on its own. But when budgeting and forecasting come together, they can give much better results than budgets alone.

The budgeting process helps set the target for the company, and the forecasting give an analytical report on whether this target is viable and can at all be achieved within the set budget. Basically, forecasting brings about a reality check into budgets with its data analysis and helps makes adjustments if necessary. Budgeting and forecasting should always be considered together and built harmoniously; they should never be at loggerheads.

Do you need both, or would one suffice?

In a typical situation, the financial budget comes first and then the financial forecast. A budget can be made based on the company’s future plans and revenue they have. But a financial forecast needs to look at the budget, the previous financial data of the company, and other current market reports to understand if the budget is realistic or not.

The best forecasting plan also considers what the competitors are up to and analyzes their data, the sales data of one's own company, etc. Though forecasting is more of an ever-changing, dynamic occurrence, taking in all these extra factors can make it more concrete and give better predictions.

Long-term financial forecasting can sometimes be done without the budget, but they mostly look at old budget data to make predictions. These can sometimes become inaccurate due to changing market conditions, like the effects of suddenly rising inflation.

Technology selection in budgeting and forecasting

There is a lot of the latest technology selection in the market where that can help speed up the budgeting and forecasting process. Integrating software like Yardi in project management can help you get quick reports if you are working in the real estate industry. The system analyses all the data and generates an automated report. You no longer have to spend money and labor getting these reports if you have the right technology selection.

Budgeting and forecasting for your company with Assetsoft

At Assetsoft, we bring together the best of both worlds. We work with expert back office accountants and use the latest technology selection to speed up work and get experienced help. You do not have to pay to hire full-time accountants or buy individual software when you work with us. We will get the work done for you while you focus on other core matters of business.

To know about our services, give us a call.

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Top Factors To Consider When Choosing Real Estate CRM

Fri, 12 Nov 2021 09:15:11 -0500

Selling and buying properties are not the only tasks performed by real estate agents. They have several responsibilities to handle. Since the real estate industry is highly competitive, real estate agents should consider adopting a CRM system to maintain their position amidst the cut-throat competition.

According to a report, by 2025, the real estate management system industry is expected to reach $12.89 billion. Also, CRM, which accounted for no less than USD 2.69 billion in the worldwide real estate software market in 2017, might grow at 5.0% CAGR during 2025. Thus the CRM system is important in the real estate industry.

However, you may find it hard to choose the right CRM for yourself with various excellent options available in the market. So, you may take into consideration the following factors before you settle for a CRM system.

Figure Out Your Needs And Goals First

While choosing a CRM, you should be governed by your business’s goals and the market you are operating in. Therefore, you should first find out the needs and goals of your company before you select a CRM system for your company. A failure to establish a clear idea about your goals may eventually cost you more money.

Have a Reasonable Budget

It is very important to have a reasonable budget and spend wisely on a CRM system for your real estate business. That’s because, according to a report by Forrester, about 39% of the individuals surveyed stated that exorbitant upfront costs proved to be challenging concerning their existing CRM system.

Don't go for the first CRM system that you come across. Choosing an all-in-one CRM system that includes automation features, marketing, and customer support options is a more cost-effective approach.

Go for an User-Friendly CRM System

Being a real estate property manager, you should always ensure if the software of your choice is easy to use and intuitive. After all, if you choose a CRM system that is hard to use, it would negatively affect your sales. And, that is not something you would want.

The user adoption rate must never be less than 100%, and the data must be shared easily between every member of your team. Also, before choosing a CRM system, always take care of the needs and convenience of your team members, too, because what is easy for you to operate might be hard for the other. Go for a CRM system that stores all your information in a centralized manner.

Choose An Efficient CRM System

Choose a highly efficient CRM for your real estate business to flourish. Yardi and MRI Software are two popular choices here. Our experts and Yardi consultants can guide you on the right CRM option. If you're thinking what makes a CRM system a good choice for you, here are some things to look for.

Is it easy to understand?

Choose a CRM provider who explains every detail about setting up the system and how to use it to you as also to your staff members. This will help your team in understanding the CRM system better and using it effectively. You need to look for continued support as well - as you can't be left high and dry should things go wrong. It's also why you might want to engage the Assetsoft team to help you. We will walk you through all the nitty gritty of your CRM system.

Go For A Customizable CRM System And Be Keen When You Choose Your Dashboards

Choosing a CRM that can be customized is very important as it allows your team to view all the graphs and charts effortlessly. Also, for a real estate business that is small dashboards may prove to be useful.

Check The Marketing Features Carefully

Your CRM system has to be equipped with marketing automation features. Some features such as email marketing facilities and building landing pages may prove to be helpful in terms of making survey forms, scoring, and running marketing campaigns on various social media platforms.

Ensure If The CRM Can Be Accessed Via Mobile Phones

The Forrester Report of 2020 had about 30% of the individuals surveyed preferring to use a mobile application for their CRM system. A lot of companies have developed mobile applications for the CRM software that they offer. Since CRM is important in real estate, you should go for CRM software that can be accessed with the help of mobile phones.

Does it Have Advanced Metrics and Reporting Features?

For a real estate business to grow and prosper, it is important to make data-driven decisions. Data analysis is, therefore, very important in the context of the real estate business.

You need to find out your competitors, for instance, the agents performing well concerning sales or business volume. You need to find out what the challenges to your business are and figure out the solutions accordingly.

So, you need to make sure that your CRM can generate reports for different aspects of your business, such as accounting, logistics, sales, and so on. Also, it should be able to create such reports in real-time with utmost precision.

Is it Compatible With Your Other Software?

Just because you are looking forward to deploying a CRM system for your real estate business does not mean that you have to do away with all the other software you currently use. You simply need to make sure your CRM system is compatible with the other software you have been using.

All your existing software, including your accounting software, marketing automation tools, and so on, has to be compatible with the CRM software of your choice. And that's where the Assetsoft team comes in, helping you choose the best real estate property management software for your needs.

Compare The Features Offered By Different CRM Systems And Ask For A Free Trial Too

Find out what features are offered by the different CRM systems that are available in the market. Check if the CRM system of your choice offers features like mobile accessibility, property listings, and so on. You may settle for a cloud-based CRM system since, according to a study, about 94% of businesses make use of at least one cloud-based solution.

Choosing a real estate CRM can be a daunting task. The Assetsoft team helps you choose a CRM system that will fulfill all your business goals. Talk to us today to know more!

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Top 9 Best Practices For CAM Reconciliation

Sat, 07 Aug 2021 08:00:00 -0500

Common Area Maintenance (CAM) reconciliation sounds simple. Just add up all common area expenses and divide them among all the tenants. But in reality, it is a complex and time-consuming process. You might miss certain expenses or end up overcharging your tenants. Regardless, any error in CAM reconciliations has a negative impact on property management. That’s why a thorough reconciliation process is essential.

While the task is tedious, our list of best practices helps make your CAM reconciliation more accurate.

Impact of a good CAM Reconciliation process

The money recovered from CAM reconciliations is used to operate and maintain common areas. An accurate CAM reconciliation process has various benefits other than just a financial boost.

Better tenant relationship

A transparent and timely reconciliation makes tenants trust you more. They will also be motivated to pay rent on time and also be responsible for maintenance. If the tenants are kept in the loop of the process, it leads to fewer CAM-related disputes. Through a good CAM reconciliation, you can build a better brand image and also get more referrals from trusting clients.

Be ahead of competitors

With around 2 million real estate agents in the US alone, the industry has become very competitive. To stand out, property managers need to provide additional amenities to tenants. Having control over the CAM expenses can help cover the costs of such amenities and also improve your brand image.

Negotiate leases

Lease negotiations need to be profitable for both the property manager and the tenants. A good CAM reconciliation process covers all property management costs while also giving tenants the best amenities.

Tips for CAM reconciliation

Common area maintenance expenses usually include:

Repairs and maintenance expenses
HVAC and other utilities
Property tax and other fees
Salary of property staff such as janitors and security services.
Cost of new amenities

To cover these costs and fairly divide them among your tenants, you need to follow these tips for CAM reconciliation.

Budget for your CAM

A CAM reconciliation starts with budgeting. One of the best ways to get a budget estimate is to look at the previous year's reconciliations. Or, if your property is new, you can also do a thorough expense review. This step is essential to avoid missing any expenses. If you detect any errors after submitting the report, then changing it would be difficult.

Apart from the usual expenses, your CAM reconciliation should also include pro-rata shares that have changed during the term.

Calculate your occupancy

One of the typical mistakes in CAM reconciliations is calculating the expenses by considering 100% occupancy. Some costs like security services and amenities might not change depending on the number of tenants. But others like water, electricity, and janitorial services will vary with occupancy. You need to also consider the number of days a tenant has stayed on your property. Consider a tenant who has signed the lease in March. It would be unfair if they had to pay expenses for the whole year. In this case, you need to exclude the first two months of the year for that tenant's expenses.

Document all changes

It is not uncommon for property managers to exclude minor repairs and maintenance from their CAM reconciliations. But eventually, these charges add up as discrepancies in your final report. To avoid this, document every change you have made to the properties, and add this to your CAM reconciliation.

Include property management fees

Tenants are also liable to pay a monthly fee to their property manager. Depending on the number of units, property managers can charge anywhere between 4% to 12% of the monthly rent.

Ensure timely invoices

If you want to ensure you are paid on time, then you also need to send timely invoices to tenants. Your invoices should reflect the various expenses to ensure transparency. Make sure that you follow up and collect the fees within the due date. Timely payments make reconciliations easier and help avoid discrepancies.

Obtain all third-party information

Third-party information like bills from insurance and janitorial service providers and reports from utility companies are all required to make the CAM reconciliation more accurate. Obtain any such information to make sure your reconciliation process can finish on time. Keep track of all missing information as it is easy to miss something small, especially if you handle multiple properties.

Review the reconciliation

Verifying your ledger can be time-consuming. But it is also crucial to avoid any errors in the reconciliation. You can start by comparing your reconciliation report to the previous year's reports. This highlights any major mistakes, especially if the costs have a drastic difference.

Next, you also need to check if the details mentioned in the reconciliations reflect in the actual leases. Make sure you are not charging the tenant something, not on the lease.

Also, check for any missing entries or unpaid invoices from tenants and vendors.

Use property management software

Property management software has many features you can use to make CAM reconciliations easier. You can keep track of the expenses, save invoices and payment details, and communicate with your tenants.

For example, Yardi Breeze has specific tools to help with CAM reconciliations. It allows you to set up tenant details for all properties and create payables for the same. It also lets you run a reconciliation by creating balancing sheets for each property. You can reach out to a Yardi consultant to know more about its features.

Outsource your CAM reconciliation

As a property manager, you will have many tasks that require your attention. If you cannot handle CAM reconciliations or want an expert to take care of them, you can reach out to an outsourcing company.

Simplify CAM reconciliation with Assetsoft

CAM reconciliations have little room for error. At Assetsoft, we help clients simplify their CAM reconciliation processes. Our team of experts understands the legal and functional aspects of common area maintenance. By outsourcing your CAM reconciliations to us, you can maintain common areas better while also reducing the overall fee. With platforms like Yardi and MRI, we make sure that the reconciliations are justified and the expenses are fairly divided.

To outsource your leasing processes, reach out to Assetsoft!

Your Guide to Budgeting and Forecasting With a Property Management Software

Mon, 28 Jun 2021 08:00:01 -0500

Real estate forecasting was traditionally based on intuition and word-of-mouth. In today’s environment, data-backed decisions form the backbone of a company’s financial growth. As there is a lot of data generated every day, you can use technology to leverage your business growth.

PropTech has a variety of software for budgeting and forecasting. Recent software uses data mining and even machine learning to predict house prices.

Through this guide, you can learn how to use PropTech to improve forecasting for your property management company.

Why are budgeting and forecasting important?

The financial health of your company depends on the budgeting and forecasting process. It enables strategic decision-making and revenue growth for your business. Real estate market trends are volatile. If you utilize technology to evaluate your investments, you can:

Update forecasts according to new market trends.
Analyze upcoming changes in the market.
Budget better by predicting cash flows.

Make decisions based on data and not guesswork.
Safeguard your company from potential financial pitfalls.
Improve performance of other departments through proper planning.
Get more investors as you have proof of the financial future of your company.

Why choose automation for real estate budgeting and forecasting?

Many companies rely on spreadsheets for their budgeting needs. With 88% of them containing errors, they are far from accurate. The real estate industry is competitive, and embracing technology can put you ahead in the race.

Using budgeting software also helps you make better business plans. According to Bi-Survey, 53% of businesses reported better planning results after using budgeting software.

Here are the 5 benefits of automating your real estate budgeting and forecasting process.

Enhanced reporting

As a property manager, you would be looking for tailor-made reports unique to your company. Forecasting software does exactly that.

Reports based on generic conditions are usually not adequate. Forecasting software allows you to generate reports against any kind of trend. If you want to run multiple scenarios or analyze different reports, you should switch to forecasting software.

More reliability

A spreadsheet document can go wrong with a single error. Whether it is missed numbers or wrong data, it can cost you important investments. The most important benefit of utilizing software is reliability. As they don’t rely on manual data entry, they increase your budget’s accuracy. Your data can also be utilized by different platforms if your tools are integrated.

It is also more secure than manual data entry. You can rely on cloud storage to keep your data from getting lost.

Increased productivity

Automated budgeting and forecasting are not only more accurate but also faster. Your employees don’t need to spend hours entering data and rechecking it, You can put your team to more productive use.

Since the forecasting is faster, you can get more work done in the same amount of time.

Elimination of guesswork

Traditional real estate forecasting was based on intuition. This may work for smaller companies with a local reach. But, property managers and investors require reliable data-based decisions for their multiple properties. Forecasting software gives insights only after analyzing marketing data and trends. After all, no company wants to leave their key decisions to guesswork.

Improved compliance

There are several real estate laws that keep changing. In the US, you should also be careful about any state-specific laws. Automated forecasting is usually in compliance with the laws. They help you create the necessary reports and also verify them internally.

Different functions you can automate:

Leading companies have automated several important business functions. These work as a unified strategy and may not show results when singled out. Some of the essential functions you can automate are:

Lease forecasting

Lease forecasting improves your budget. Accurate predictions can direct your investments and improve ROI. Your software should forecast precisely and also have an easy-to-use interface.

Multiple variable forecasting

Forecasting takes into account multiple scenarios like tenancy changes, economic factors, and other changes. The right software needs to forecast considering all these aspects. It should also let you generate multiple reports on individual changes.

Corporate expense management

The real estate budget needs to account for corporate expenses such as legal fees, payrolls, and taxes. These can change in different regions or countries. You need to evaluate your budget according to the expenses specified by the local law.

Some software has such inbuilt functions. You can also use add-on tools in software like Yardi and MRI to manage budget and forecasting.

How to choose the right software?

There are many tools designed for real estate budgeting and forecasting. Before choosing one, you need to evaluate the software for some key abilities.

Being Adaptive: It should let you change your forecasting based on new inputs. Ideally, it should generate as many reports as you want.
Speed: It should generate reports within a short span of time. If you have deadlines, you need to consider this quality.
Integration: It should seamlessly integrate with your other tools.
Easy interface: It should be useful for a person who does not have much IT experience. A simple software understandable by a client could go a long way.

Efficiency: It should decrease the workload from your staff. The reports should not need much evaluation from your other employees.
Accurate: Most people shift from traditional methods to software because of the accuracy. Your software should generate reports that are accurate and up-to-date.

What features to look for?

Budgeting

The budget feature lets you collect data from a property level. This data is used to make granular level forecasts. Choose software that lets you predict future costs by analyzing individual data such as rent and vacancies.

Assumption analysis

As a property manager, there are several ‘what if?’ scenarios you need to analyze. Software that generates reports as per your input will allow you to evaluate different market scenarios.

Customizable P&L

Your software should evaluate cash flow based on the components of your chart of accounts. It should also allow a choice between generating reports at an account level or cash level.

Adjustable granularity

Software that has adjustable granularity generates reports at all levels. You can choose to generate an overall report or divide them into segments. You can also choose many reports of individual properties.

Short and long term forecasting

Usually, forecasts are done for 1 year to 5 years. If you require forecasts for varied durations, choose software that is flexible with time. That way, you can input the duration to get an accurate forecast.

Global reporting

If you are thinking about international investment, you should choose software that can deliver global results. You should be able to switch between regions and currencies before making a forecast.

Investment planning

Based on the forecast, the software should plan your ROI on various investments. It should also give you valuable insights on the right areas for investment as well as the upcoming trends.

Integration with other tools

If you use multiple software for other processes, you should focus on the integration of your budgeting and forecasting software. The integration allows your other tools to utilize data from your budgeting software directly. This ensures seamless workflow and increased efficiency.

Dashboard

A dashboard comes in handy if you want to view all your generated reports. It also provides some key insights into your activity. A dashboard helps you manage your budgeting and forecasting data within the app. It also lets you view, forecast, and delete any reports.

Support and troubleshooting

Make sure that a dedicated support team is available for the software you choose. If you ever face problems with the forecasting software, the team should be ready to look after the issue for you. They should also notify and guide you through any new updates.

Cloud-based storage

Cloud storage is popular for a number of reasons. Since budgeting and forecasting uses a lot of data, it is safe to store it on the cloud. That way, it will be more secure and you will always be able to recover data.

Our recommended real estate budgeting and forecasting software

Yardi advanced budgeting and forecasting

This software by Yardi delivers accurate budgets quickly. The features include budgeting, flexible modeling, real-time valuations, and much more. It allows you to reforecast according to your data input.

MRI's budgeting and forecasting software

This software is built to make budgeting more efficient for property managers and investors. Some of the features are centralized budgeting, configurable leasing assumptions, access to data, and a simple user interface.

Get the best out of technology through Assetsoft

Budgeting and Forecasting are the financial backbones of a real estate business. At Assetsoft, we assist you in every step like planning, strategy, and operation. From tech advisory to implementation, we do it all.

Through software like Yardi and MRI, we help you make the best out of technology. We can suggest the right software by understanding your requirements. We can also integrate your tools, check-up existing software and provide training for your staff. For any property management software requirements, reach out to us!

Book a free consultation now!

It's the Budget Season! Key Challenges for the Real Estate Industry And How To Overcome Them

Fri, 05 Feb 2021 18:00:41 -0500

Budget season is one of the most important planning periods for any company. Unfortunately, it's also one that many businesses despise. It involves countless calculations, forecasts, and the need for agreements.

Naturally, budgeting is vital for property management. Structuring your resource allocation lets you carry out your objectives appropriately. When done improperly, discrepancies can result in significant financial losses.

Controlling your expenses and allocating resources should be your first goal during this season. Luckily, we've helped plenty of businesses plan and execute their budgets to the letter. Today, you'll learn how to do the same.

What are the Most Common Challenges?

The London School of Business & Finance has an excellent summary of the most common budgeting challenges for companies. As the article explains, structuring your expenditure strategy is crucial for your company's growth.

When working with limited resources, a proper budget structure should be a priority. Small and medium-sized businesses depend a lot more heavily on budgeting strategies. However, efficient management is still a primary advantage for any company.

Furthermore, company budgets are more delicate than personal ones. It's more difficult, but it doesn't have to be impossible. Your company's budget should be an advantage, not a problem. Identifying the most common problems is the first step to overcome them.

Data Accuracy

Most businesses rely on several departments. For real estate, that's even more important. Accounting, sales, marketing, property management, leasing, specific projects, and other departments generate data separately.

Assessing their expenses is a huge challenge. Inaccuracies and mistakes result in under- or over-budgeting. Both scenarios are equally detrimental to the company's goals and finances.

Integrating Data Together

Whether you're using Yardi, MRI, or another real estate software, you'll probably have team members working on different things simultaneously. How do you combine the different excel sheets? How do you ensure team members are kept in the loop with changes? Having everything over the cloud can help every department in the organization synchronize their workflow. It will be easy to pull information and update data fields as needed.

No Adaptation

Ideally, your budget should remain relevant during the entire fiscal year. However, that's far from meaning that you should stick to the original version eternally. As mentioned, multiple variables play a role in determining how effective it is.

Ideally, you want to revisit and modify your budget accordingly throughout the year. It would help if you accounted for different trends and events that could render your original budget sub-optimal.

Result Orientation

Sure, profits are the goal of every business. Your budget should aim towards optimizing your income via operational improvements. However, that's not the same as obsessing over results.

Qualitative factors, like employee satisfaction and engagement, are also important. While they don't impact growth directly, they're still vital aspects of your business' performance.

Not Enough Time

You don't want to think of your budget as a problem, but you should still dedicate enough time to its planning. It's easy to use what worked in the past, but circumstances change.

You shouldn't leave your budgeting process to the end of the fiscal year. You want as much time as possible to evaluate every variable in all departments.

Lack of Versatility

Finally, this is somewhat of a continuation of the adaptation problem. We've seen too many clients relying on past years' budgets since they already worked.

Even with slight modifications, that's a horrible approach. It's a safe way to lose money since it encourages department expenditure for "inflating" next year's budget. Make sure you tackle every budget season from scratch.

What Should Real Estate Firms Look Out for in 2021?

The COVID-19 crisis has been a game-changer for everyone. We're still not in the clear after nearly a year, and countless sectors have changed permanently. Luckily, real estate has benefited in several ways, but that doesn't mean the coast is clear.

2021 promises better times. Vaccines seem to be on their way, and numbers from the last year were surprisingly positive. The key lies in maintaining that momentum. 2021 comes with its own challenges, and you must prepare for them.

The Impact of COVID-19 on the Markets

Mainly, fair property values have fallen. Reckoner values stayed near their levels before the pandemic. The result is tax calculations working with deemed incomes. Additionally, pre-sales lost volume because of lacking confidence from customers over project delays.

Naturally, the office, hospitality, and retail sectors were the main victims. Budgeting should focus on revitalizing the market amid easing regulations. For economic recovery, the real estate sector's revival is mandatory. That's because of the current demand for employment.

Stamp duties have also experienced several reductions across different states. Thankfully, it's boosted demand. Capital gain exemptions are a possibility, aiming to enhance demand throughout the country.

Finally, the digital transformation during the crisis has brought significant growth for several markets. Data centers are currently in high demand, so these projects' budgets will likely benefit from tax incentives.

What can you do to Prepare for the Budget Season?

Mandatory budget cuts for IT are understandable. Optimizing costs means working better with fewer expenses. However, handling this pressure effectively makes the difference between success and financial troubles.

The most important step is to clarify the real scope of your cut costs. Reality should be a key factor during preparation. Realistic expectations ensure you can meet your goals, and that requires honest forecasts and data analysis.

You need to develop an action plan for your stakeholders as well. Make sure to include several cost-saving alternatives in case something doesn't work. You, your team, and investors should understand how every method will impact the business.

Additionally, RealPage's blog has an excellent article about preparing for the budget season. Let's go through them quickly.

The Impact of COVID-19 on the Markets

Your first step should be to check whether or not the accounts on your general ledger are necessary. Many businesses establish more GLs than they really need.

Additionally, make sure you go through different accounts and groups. Some report structures might need changing.

Import your Data

Importing the right data—and properly—is vital for producing accurate budgets. A good importing process ensures you streamline your budget flow.

Before this step, create a proper schedule and import test data to review its accuracy. Check that all values have the right signs and are arranged correctly.

Assess Payrolls

Remember to update recent rates for employees, even if you're not adding departments or resources to your business.

Study current turnover averages and salaries to provide a competitive salary without sacrificing your budget. That includes benefits and payment periods per month.

Develop your Models

It would help if you clarified who's participating in the budget. You need to assign specific resources and permissions for your budgets as well as dates.

Your models should also include historical data without relying entirely on it. Determining which data makes into the model is as important as including it.

Worksheets & Calculations

Custom calculations and worksheets are usually necessary in cases when you're using various GLs. Remember to set up these customizations before you begin creating your budget. That includes formulas, fees, and statistics.

Review Budgets on Properties

Before acting on your entire budget, allocate the resources for a single property. Use this as your budget's pilot and review the results.

This first distribution should work as a test of your calculated budget. Also, run your Excel sheets and standardize your processes. With modern ERP, you may be able to run this inside your ERP – for example, MRI Version X or Yardi Voyager 7s.

Keep Checking

Finally, make sure your company produces variance reports to account for percentage variances over the year.

Additionally, check that the values for every month make sense. It's easy to forget about logging a month's value or repeat values from the previous year.

Making the Most Out of Budget Season

Despite what you might think, your budgeting period shouldn't be a challenge to overcome. You want to turn it into an advantage. Doing so requires the right mindset and responsibility. This article by the National Apartment Association is a great start.

Multiple variables make budget projections unpredictable. That doesn't mean it's less important, however—quite the opposite. They only make budget accuracy more important. Proper training and the right tools go a long way.

It would help if you used correct templates for calculations, but that's far from the only approach. Today, real estate companies have access to countless systems to make their lives easier. Platforms like Yardi, MRI, and Procore can streamline your budgeting season.

Not only can you centralize all the data you need. You can also integrate several solutions into your software suite for more features. This kind of implementation can be difficult, but it's one of the best investments you can make.

How can you Leverage the Best Software for the Job?

The biggest advantage of implementing property management software into your company is its versatility. You can find in-depth systems, like MRI Version X and Yardi Voyager 7s. They let you track every variable and status related to your properties.

Even better, they let you streamline your back-office functions. That means centralizing your entire accounting and financial management. You can also work with plans and modules tailored specifically for your needs.

The best way to take advantage of these innovations is to work with experts. Our consultancy services cover all the areas you need for effective integration:

Full implementation.
We are assessing the best software and features for you.
Training and onboarding.

ERP migrations.
Offshore help desks.

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