March 24, 2015
Finding the Right IT Tool for Real Estate Management
By Alexander J. Narcise
If you own a real estate investment or property management firm and are reluctant to take on the time-consuming hassle of running a financial report, it may be time to think about upgrading your accounting software system.
When it comes to managing two or more buildings, using a standard accounting system is like trying to fix a tenant’s leaky sink with a nail file. It’s just not the right tool for the job.
Off-the-shelf accounting software systems don’t know your business. They don’t speak your language. They can’t respond to requests for construction project accounting. They can’t help you manage leases, issue tenant arrears reports or run a partner distribution schedule. In fact, they can barely provide the balance sheets, P&L statements, accounts payable listings and payment processing responsibilities you have every right to expect.
As a result, your accountant can’t readily give you the information you so desperately need to balance the books or, more critically, provide reports to your partners, bankers and prospective investors. An inadequate system is slow and gives you garbage in, garbage out results.
The answer is accounting systems that specialize in meeting the needs of the real estate industry. Here are three of our favorites.
- MRI Software. This system is especially effective for smaller real estate management groups.
- Yardi. This solution generally best fits larger real estate investment groups.
- Sage 300. This is a preferred choice for the budgeting and financial reporting demands of new construction projects.
All of these systems have ability to understand the financial reporting needs of your real estate business. They know the language and can easily handle whatever drills you need them to perform. No more tackling the job with a fingernail file.
So, with one single purchase, your troubles are over, right? Well at least you’re on the right track. But now you have to install the software and train your employees to use it.
Time to call in the experts
Yes, you can install such a system by yourself, but only if you have plenty of time, patience and all of the right internal resources at your side.
You will need a full three months or longer to fully integrate a new software system into your operation if you want to do so without disrupting day-to-day business. And that’s a critical consideration, as disruptions cost time and money.
Instead, consider hiring a third-party consultant that can give you a team whose collaborative expertise is at the nexus of IT, real estate and accounting. By bringing in the right specialists who understand all phases of the challenge, your consultant will be able to efficiently and effectively install your new system and integrate it seamlessly within your operation. The next step is training your people how to use it, and doing so in such a way that you don’t feel an interruption. In choosing a vendor that can do all of that, it’s also imperative that the consultant you hire will be there to offer tech support as needed. And it will be needed.
You’ve done all of that? Great. Now you’re using the right tool for the job, and your decision will be rewarded the next time you need to quickly and easily run a tenant lease report.
As co-partner in charge of the Real Estate and Construction Services Group, Alexander J. Narcise, CPA, specializes in all areas of accounting, auditing and taxes for family-owned real estate businesses. Reach him at firstname.lastname@example.org.