5 Ways to Automate your Commercial Real Estate Business
Automation in commercial real estate businesses is crucial for efficiency and lowering overall costs.
One day spreadsheets are a pain, but sufficient. The next day it seems, every spreadsheet and system you have is outdated, has a formula error, and nothing agrees. You have descended into chaos. At that point, every request you have from your investors, lenders, or even yourself when trying to make a simple decision, is time-consuming and frustrating.
Here are some of the most common areas where automation in a commercial real estate business can lead to significant insight and growth for a company.
Managing and Reporting on Debt
Purchasing new properties? One of the first things you will need to do is provide an updated personal financial statement. Each and every time you buy something, you have to provide a list of all your current assets, their value, current debt, equity, and payment amount. Even with a moderately sized portfolio, this is dozens of cells of data that must be updated and hours of tedious work. And the work is only accurate at the moment it was completed. The process starts over the next month or for the next purchase. And a delay in providing this to your lender is a delay in accessing funding.
A good management system should allow you to export your current debt load across your entire portfolio in whatever format you need it in, and in minutes. It should reflect the most current financials for your portfolio.
Common Area Maintenance and Reconciliation
When was the last time you checked to see how your expenses were in relation to what you expect your tenant to cover? Are you running over or under? Do you have a cap that will prevent you from spending over a certain amount on landscaping each year? Where are you this year in relation to that cap? Should you be quickly lining up someone to complete some extra work so you come close to your cap in expenditures?
What about reconciliation? Are you manually assembling all the costs across each of your expense categories at the end of the year and then manually splitting that across each tenant and consulting lease agreements to see what is covered and why? Preparing reconciliations reports for tenants is a daunting task. And, the activity is compounded by the number of tenants. Reconciliation is necessary but rarely receives the time it deserves because it takes too long. As a result, owners frequently encounter a loss of income due to inaccurate expense management and tracking.
Reconciliation is a prime area for automation in commercial real estate. Utilizing a system with real-time expense capture and allocation is the solution to accurately managing CAM and reconciliation. Automation gives you the best view of your actual expenses compared against your budget. It also affords you the ability to rapidly produce common area maintenance reports that can be shared with tenants saving you hundreds of hours of work.
Invoicing
Ever invoice a tenant and realize you missed including the latest lease rate? Or, decided that invoicing was too much effort and you would rather not do it at all? Then after the fact realized that tenants were not paying the most current base rent?
Invoicing can be a tedious process. To do it right, you need to have awareness of what each tenant’s base rent is and what you are currently charging for operational expense recovery. To accomplish this currently, you likely have to utilize several different logins within your accounting system since most systems separate by company.
This entire process can and should be automated with a software tool. The time spent producing invoices can be dramatically reduced with the use of a management system that reflects all your current charges based on the terms laid out in your lease. More importantly, the risk of missing something has also been reduced as well. Plus, imagine all your company data available in a single consolidated dashboard view and the clarity that will provide your entire team.
Direct Payments by your Tenants with ACH
How many tenants are you tracking down for rent checks or late payments? How many spreadsheets are you managing so you have an ongoing record of who has not paid their rent this month? What is the cost of both lost income and time to keep track of these monthly activities?
The benefit of implementing ACH, otherwise known as direct deposit, are many.
- ACH payments are the fastest way to collect rent.
- Eliminate the manual steps for receiving rent resulting in less staff energy use.
- If scheduled, there is less chance for a late payment by your tenant.
- Of all payment types, ACH payments have the lowest fraud rate.
Take the necessary steps to automate your rental payments and experience these benefits for your team.
Alerts!
Alerts should be something you require in any good management system you use. An alert should come you to you directly so you can take the direction you need, at the time you need to take action. And, the alerts should go to the individuals that need to take action or be informed.
Automate Your Commercial Real Estate Business
It is not too late to stop the madness. STRATAFOLIO is a system to help you get on top of your finances and in control of all the activities involved in running your real estate business. Take action to automate your real estate business and experience growth.
Managing the day-to-day operations plus trying to implement a new system can be a stretch for most small teams. That is why STRATAFOLIO offers our pain-free full-service onboarding.
After completing the onboarding process, your team will the ability to:
- Know immediately what your current income and expenses look like globally
- Share information for a personal financial statement at a moment’s notice
- Report out to investors with ease and confidence
- Rapidly prepare both invoices and CAM reconciliation documents
Start 2021 with a good management system. Stop the unnecessary use of staff resources on time-consuming, repetitive non-value add tasks. Instead, use your staff to grow the business. Focus them on the activities that can help you get ahead.
Learn how STRATAFOLIO can help your business grow and positively impact your bottom line.
Originally published at https://stratafolio.com on October 28, 2020.
