Online Spend Management Systems Streamline Apartment Property Renovation and Expansion Projects
Strong apartment demand and healthy resident retention are presenting a much stronger argument for property owners to invest in their properties through renovations. If your property is considering updates, are you handling the process through a paper-based system? If so, you’re likely leaving money on the table associated with managing bids, contracts, transaction documents and many other aspects of the project.
An automated spend management system is giving gives property owners a new tool that is more cost effective, making the process run much more smoothly and enabling a better return on the investment. If you’re considering sprucing up your apartment units, here are some specific areas where an automated spend management system can provide a much more efficient, transparent solution.
Spend management software systems allow a collaborative approach to managing bids, contracts, lien waivers, job cost and transaction documents, in addition to enabling real-time tracking of every transaction against the budget and integration with third-party accounting systems. As a web-based solution, all documents and transactions are available on-demand with 24/7 monitoring with backups and redundancy.
Armed with centralized reporting and user controls, project managers have customized reports at their fingertips and can set parameters on who can access given information.
Single Copy of the Truth
Berkshire Property Advisors, which manages a multifamily portfolio that includes $2 billion in assets, recently employed a spend management system to track renovations and capital improvements. The company was able to drive down costs associated with contractors, labor, accountants and overall project management.
Spend management software allows key personnel to continually access all the information available, providing efficiencies that couldn’t be achieved under existing time-consuming processes, says Zachary Maggart, vice president of redevelopment for Berkshire.
In the past, high-level management was plagued by very limited visibility into projects, which made monitoring budgets– as well as spotting problems – difficult. Hours, and in some cases days, were spent consolidating information.
“It’s a single copy of the truth,” Maggart said. “Excel spreadsheets, Access data bases and paper trapped in physical PCs are antiquated tools for managing multi-million dollar renovation projects. Now it’s all centralized, and management can pull up customized reports with whatever information they need for analysis.”
Spend management systems, which are Sarbanes-Oxley audit friendly, can also integrate with third-party accounting general ledger and accounts payable systems to create a paperless, automated workflow with no duplicate data entry into multiple systems. Automated control features for expenses also provide notifications to ensure documents are routed correctly for approval.
With the system’s automated invoicing features, Maggart estimates that Berkshire is saving $7-$10 per invoice. And other labor savings are realized, for example, because paperwork that traditionally had to be tracked down to fax or email is at the ready.
Driving Down Costs
Spend management systems also can drive down external costs, including going out for bid, which make property investment even more inviting.
Apartment complexes up for renovation can be grouped into geographical areas to create a much larger job for contractors to bid. Per-unit costs for 6,000-unit jobs are typically lower than a 600-unit job, thus driving down the overall cost. At the same time, bid requests can be put out to multiple contractors and vendors.
Systems also offer the ability to review historical project records without digging through paper files in multiple locations. Thus, property managers are better informed before making decisions on new project bids and cost projections.
A project can go from bid to contract in a matter of hours.
“This is a big change in the way that we’re doing business,” Maggart says, “and it’s going straight to the bottom line.”