Property and Finance: Exploring Property Management and Accounting Software

For real estate investors and property managers, handling finances and accounts takes a lot of time to complete, and there is always a chance for errors. Many continue to use spreadsheet solutions and manual processes to handle vital tasks such as income and expense tracking, financing reports, and insights on property cash flows.

Additionally, these processes sometimes result in inefficiency, costly faults, and restricted financial information.

Industry surveys indicate that property managers spend an average of 7-10 hours monthly on accounting tasks like data entry and report creation across their portfolios. The monthly burden can be staggering for more prominent real estate firms managing hundreds of properties.

Surveyed businesses in the real estate market established that 58.5 percent use Excel for financial management, whereas only 15 percent use property management and accounting software tailored specifically for them.

One of the downsides of this over-reliance on spreadsheets and manual calculations is the tremendous time wasted and high risk involved. Input expense receipts, reconciling the monthly bank statements, and creating monthly reports in Excel will require days for more extensive portfolios.

Moreover, as per studies, 88 percent of spreadsheets contain mistakes because the manual data entry is done by humans, which has errors. Such mistakes can yield wrong financial reports, payment delays, and low visibility of the properties.

The lack of automation also impacts access to critical information. Constructing consolidated financial reports across multiple locations becomes extremely difficult as properties scale. This results in limited visibility into high-level property cash flows, P&Ls, and performance trends.

Now let’s talk about:

Automation and Integration with Property Management Accounting Software

Specialized property management and accounting software aims to solve these challenges through automated tracking, consolidated reporting, and seamless integrations. Leading solutions sync with bank accounts and bill pay platforms to import income and expenses automatically rather than rely on manual entry. This streamlines reconciliations to just minutes rather than hours.

Accounting software for real estate investors also allow users to set up automated reports generated in real time. Customizable dashboards can be configured to reflect critical financial and operational metrics across entire portfolios. Monthly financial reports can be instantly constructed in proper formats versus manual recreation in Excel.

Native integrations between accounting, bank feeds, and bill payment enable these automation benefits. Syncing these systems eliminates duplicate data entry and reduces reconciliations to exception handling. Industry surveys indicate that property managers save approximately 8-10 hours monthly after implementing integrated property management and accounting software.

Also Read, The Perks of Real Estate Accounting Software

Improved Financial Oversight and Decision Making

In addition to automation, property management accounting software delivers better access to real-time financial insights. Managers can view consolidated reports and dashboards that roll up high-level property financials, including profit and loss, budgets vs. actuals, and cash flow. Drilling down into individual properties, units, and transactions is also simplified for tracking performance.

This real-time visibility enables proactive management rather than reactive fire drills. Potential issues can be identified early based on budget deviations, unusual expense spikes, or cash flow health metrics changes. Managers can drill into details to diagnose and address problems before they spiral.

Having unified visibility across the portfolio also empowers better decision-making. Investors can easily track performance trends to optimize capital allocation between properties. Managers can leverage consolidated data to negotiate better rates with vendors. Maintenance and renovations can be strategically timed to manage cash flow.

Reduced Accounting Expenses

By automating time-consuming accounting tasks like data entry and report generation, real estate accounting software reduces the man-hours required for financial management. This means accounting can be handled with less internal headcount. Some studies estimate that real estate businesses save $8,000 to $12,000 annually in outsourced accounting and bookkeeping fees after implementing software.

For large enterprises, the savings are even more pronounced. Accounting software for real estate investors automation enables growing portfolios to scale while keeping accounting overhead contained. According to Gartner research, approximately 70 percent of financial data reconciliation can be handled through automation. This allows accounting resources to focus on higher-value strategic initiatives.

Better Collaboration Across Teams

Cloud-based commercial real estate accounting software promote better collaboration across corporate accounting, property managers, and on-site staff. Rather than siloed spreadsheets, all teams can access the same financial data, reports, and workflows within the centralized platform. This alignment of information drives faster internal processes.

Investors and stakeholders can also be granted system access to provide full transparency. Direct visibility into financial reports, documents, and records builds trust and confidence. This enables more strategic alignment between management and ownership.

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