Take the Pain Out of the Multifamily Budgeting Process with Web-Based Software
It’s never too early to start thinking about how to make the budgeting process easier. In fact, now’s the time when apartment owners and managers usually start thinking about what they need for next year’s game plan. But what if you could reduce the time needed to prepare your annual budgets?
Web-based budgeting software designed specifically for the multifamily industry is making life easier for property management companies, reducing an often long and frazzled fiscal planning process from months to weeks or even just a few days. Web-based systems enable the easy import of financial data and documents and provide a clear, concise view of the road ahead.
How do web-based budgeting systems work? These systems typically enable you to model budgets based on the financial and statistical measures that drive revenue and expenses for your portfolio. All actual historical and prior-year’s budget data for each property can be automatically collected, eliminating the need to prepare separate budgeting packages for each property.
The process is centrally administered from a control panel with visibility into each property budget. In the end, with the click of a button property managers and owners can prepare, import, view, distribute, and approve the new budget. Any changes made to the budgeting model and the related assumptions are automatically updated throughout the budgeting system. No need to trouble-shoot formula errors often found when using spreadsheets. With all the workflows contained within the budgeting system you never have to worry about lost spreadsheets—it’s all right there at your fingertips.
Best of all, there is little need to start the budgeting and forecasting processes several months in advance when today’s volatile market conditions can make work done in August irrelevant by December.
Vice President Macey Holden said automated budgeting tools reduced the fiscal planning process for Nickel Plate Properties literally from months to days. The company, which manages properties in Tennessee, North Carolina, and South Carolina, used to start planning each October by gathering information and hosting manager meetings. While a planning was still essential, the nuts and bolts of the budget came together fast.
“We were able to basically complete the budget with two days,” Holden said. “It’s very nice to be able to wrap up everything in one system. From an owner/management standpoint, a front-end standpoint, it’s a phenomenal tool to be able to access from the web.” Especially if key decision makers are on the go or traveling.
Third-party management software, like those used for payroll and vendor management, can typically be imported and the flow of data goes undisturbed.
Holden said importing Nickel Plate Property’s third-party data was simple, user-friendly, and error free. “We were able to upload the budget and complete and produce our financial statements as always. It was a very smooth transition,” she said.
Management portfolios that include different types of properties can benefit from automated budgeting tools, and the fact that the tools are geared to the multifamily industry helps managers comply with the process, says Shari Koehler, CFO of Franciscan Ministries, Inc.
Previously, Franciscan Ministries, Inc. — which operates more than 2,500 units of affordable housing in Colorado, Illinois, Iowa and Wisconsin as well as assisted living properties — used an Excel-based accounting system for budgeting before switching to an industry-specific automated budgeting tool. Making that move enabled managers to speak the same language as the budgeting system. A web-based system that takes into account multifamily industry business processes, such as turnovers, move-ins, and move-outs, makes it much easier for staff preparing the budgets.
And because web-based systems eliminate streams of paperwork generated by various departments within an organization, these tools meet a growing demand for a more green industry.
“Our organization is focused on moving forward in paperless environments,” Koehler says. “And the web-based application has allowed us to facilitate that process in the budgeting area, minimizing the amount of reports printed or types of reports printed. It allows us to encourage online reviews, online processes and minimizes the amount of paper used. That’s been a huge benefit for us organizationally.”
Forecasts are a breeze as well with web-based budgeting tools. A dynamic planning process that includes the ability to generate frequent and accurate forecasts is extremely beneficial, especially as changing market and economic conditions affect your bottom line.
Web-based budgeting tools can eliminate much of the pain associated with preparing budgets and forecasts … and save countless hours in the process. How long does your budgeting process usually take each year? Once budgets are prepared, are you able to forecast easily as conditions change during the year?