What is Real Estate Enterprise Accounting?
In a real estate business climate where products cover every niche available, one area has been surprisingly lacking: accounting for real estate investment companies. Products that perform exceptionally and truly cater to this segment are in short supply, especially in the mid-market range.
Real estate enterprise accounting helps private equity real estate firms, Limited Partners and General Partners traverse the complex and intricate world of real estate investments to ultimately grow their business to the next level. But what does it do and how does it achieve that? For starters, these solutions are usually set on a single platform, designed to manage critical enterprise accounting functions, related to real estate. Three powerful functionalities of enterprise accounting include:
1. Corporate Accounting
Corporate Accounting enables real estate firms to simplify the process of allocating expenses and overhead from the corporate entity to investments and properties. In addition, it manages financial reporting for business units not specific to a particular assert or investment vehicle. This is especially important to firms making the jump from small to mid-market.
2. Investment Accounting
Investment accounting manages all capital transactions such as capital calls, distributions, management fees, and other transaction types. It also handles investor correspondence and reporting while tracking investment returns.
3. Advanced Consolidations
Advanced consolidations combine accounting records and manage complex ownership structures of multiple subsidiaries, presenting consolidated financial statements for multiple sets of books for the parent company. Automated consolidation rules help reduce the closure cycle time.
These tools make for a powerful combination that allows growing companies to remain nimble, while managing complex enterprise accounting. It’s the reason this type of accounting solution is so much more effective than a generalized one-size-fits-all solution. It provides unique functions that go above and beyond to cater to the specific needs of organizations who manage real estate investment holdings.
In addition, some of these solutions can drill down even deeper, assisting with particular asset classes like commercial real estate, hospitals, multifamily properties, single family properties and even senior and student living investments. These focused tools can provide a specialized type of accounting that helps companies in these niche markets navigate the dynamic and financial complexities often involved in real estate investments.
This is especially true for growing middle market real estate investment companies. If you’re a mid-market firm that’s looking to grow, a targeted a real estate enterprise accounting solution could be your ticket. Why? Because the savings could be potentially substantial. First, these solutions provide a low cost of total ownership. Located on a single platform, they save into time, productivity and resources. And as your portfolio grows, you won’t need to expand with additional accounting staff. Everything you need financially is right where you want it.
By upgrading to an enterprise real estate accounting solution, you’ll know the numbers inside and out and at any given time within your real estate investment portfolio. You’ll be able to simplify complex consolidations, automate capital transactions and financial reporting to your investors and drive workforce efficiency by streamlining your back office and putting your revenue into your investments where it belongs.
Learn more about Real Estate Enterprise Accounting.