Benefits of ERP in Real Estate Management and Capital Accounting
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Benefits of ERP in Real Estate Management and Capital Accounting

The real estate industry has grown rapidly in the recent past becoming a major contributor to world economies and has established that most upcoming dollar millionaires around the world are intensely involved in real estate development. Therefore, the robust nature of business activities within estate management firms has continually changed to fit best the market requirements.

Capital accounting on the other hand has experienced a sharp and dynamic increase in revenue and expense transactions managed over time which put into consideration the viability of the owners’ equity. Increase in real estate developments has also increased the demand for expert estate management and capital accounting services.

Real estate management refers to all business processes and activities that involve asset management of both freehold and leasehold properties on behalf of their owners. It involves the management of residential, industrial and commercial properties that include shopping malls, detached houses, apartments and condominium units.

ERP in Real Estate Management and Capital Accounting

Real estate management offers the following professional services; property planning, acquisition, construction, design and management of properties. On the other hand, capital accounting refers to development of financial statements that reflect on the net worth of the business at a particular time. Capital accounting puts into consideration the extent of owner’s equity into the real estate business and the return on investment achieved and forecasted in the prevailing and future housing markets. Therefore, capital accounting in real estate management will involve the calculation of the company’s earnings less the cumulative distributions to the particular property owners.

Real estate management and capital accounting business operations are quite robust and involve varied multiple processes therefore, to ensure that they are properly managed it necessitates that real estate agency adopts the use of electronic resource planning (ERP) solutions. Continuous software development has brought about customized ERP options that meet the designed functionalities of property management and real estate organizations.

Real Estate Management and Capital Accounting

These ERP systems offer tailor made solutions that address real estate industry specific challenges such that they are able to tabulate and record complex transactions experienced in large retail facilities, franchises as well as real estate investment and commercial trusts. It is believed that the current success of the real estate industry banks on the availability of accurate data provided by ERP systems which enables investors to make quick decisions on properties in the market.

ERP solutions in real estate management and capital accounting also provide a platform through which various properties gain visibility such that an interested potential client can access and assess the past, current and future performance of the real estate business. The ERP systems provide insights that are required to successfully improve the real estate investments performances. In addition, with accurate data generated from ERP systems it becomes easy to control the risk posed to the return on investments made.

Real Estate Management and Capital Accounting

Estate management is synonymous with management of multiple real estate investments and buildings hence, ERP solutions offer a multi-faceted business structure as well as provide a user friendly interface that simplifies the management of various properties both open for sale or letting. In addition, the user friendly platform is able to offer a mix of both centralized and decentralized operations management converged into one large database. This makes it easy for the business to use the ERP systems to generate segmented performance report for each listed investment.

The ERP systems bridge the understanding of varied complex business requirements making it easy for employees within property management firms to act in a flexible and timely manner while ensuring accountability and that the accuracy of data produced tallies with the actual facts and figures at hand. The ERP solutions assists the employees to fill in the gaps commonly from market research and monitoring and evaluation to ensure that the aggregate data produces represents the real value of the firm at a given time. Additionally, through the ERP systems a firm is able to integrate strategic partners into the business which generates increased traffic for the business which is translated to income.

Through the ERP systems, a real estate firm is able to manage all tenant and landlord lease arrangements and requirements ensuring that continuous open reporting and accounting occurs. These solutions provide a significant integration of lease creation and maintenance, CAM charges and reconciliations, metered sales based rent and pro-rated market facilities. Moreover, by using ERP solutions in real estate management and capital accounting, the firm is able to adjust its charges based on the consumer price index, rent rate schedules as well as the actual budget of the property type.

The ERP systems enable the real estate management firms to obtain a multi-entity management platform which uses a centralized database. Within the database, each vendor or property has its files stored in a master file which is easily accessible when needed. Moreover, the multi-entity platform enables the business to integrate payment systems such as VISA, Mastercard among others which facilitate direct payments to the firm for services and products offered.

Capital Accounting

Interestingly, the ERP systems are in a position to conduct an automated audit of inter-firm business transactions. These solutions enable the users to have complete control of the existing property development projects while at the same time assisting in cost control that assures of high profitability for investments undertaken.

In regards to capital accounting within a real estate industry and firms, ERP solutions are in a position to provide an in depth description of revenue and expense deferrals. This will enable the real estate firms to gain control and enjoy the flexibility of the expense deferrals encountered in the line of business. The ERP systems contain software developed in manner that they are in a position to create automated schedules when positing of expense and revenue transactions are made.

As a result, these systems will ensure that all deferrals get notifications of their schedules within a very short time. This facilitates as well as calls into action for tenants to make timely deposits of their rents or lease payments which streamlines CAM reconciliations and ensures quick and accurate accounting processes.

Investing into ERP systems therefore proves to be of great benefit as it ensures that an estate management firm complies with the latest acceptable accounting standards and is in a position to make accurate forecasts into the future. Additionally, these systems enable the consolidation of sales documents, proper filing of property details, supports bulk emailing and SMS platforms and have the capacity to accept and process cash receipts for payments made in a transparent manner.
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