Accounting is one of the critical aspects of any business. While generating revenue is the primary goal, managing the cash flow efficiently determines the stability, success, and longevity of any business, especially in the highly dynamic real estate business. This business involves heavy financial transactions and a lot of taxation formalities due to ever-changing rules and regulations.
Even if you are generating multiple leads, making huge sales, closing more deals, and bringing more money, then it may not necessarily mean profit, especially when your property business is plagued by cash flow issues, tax problems, financial discrepancies, higher operating costs, penalties or even fraud. Therefore, whether you are a property owner or Property Manager, you will need enterprise accounting software to help you overcome all accounting problems and streamline your business cash flow.
Before we discuss how accounting project management software helps smoothen the accounting process of any real estate company, let’s first explore the challenges that these firms face when it comes to simplifying their accounting operations.
TOP PROPERTY ACCOUNTING CHALLENGES
1. False Impression and Erroneous Classification of Expenses
Expense cataloging is an important and huge task in real estate accounting. Real estate accounting has always been an essential first step, but with the changing lease accounting standards, the expense classification has become more critical and complex. But still, it is a big challenge due to misinterpretations. Also, the lack of transparency in maintaining accounting data and records could result in false impressions. Several other reasons can lead to issues: a lack of skilled professionals, limited knowledge of new standards, conflicting priorities, and unawareness of how to categorize expenses.
2. Poor Data and System Integration with Accounting Software
Most companies use accounting systems to streamline their accounting processes but still experience issues. The major problem they face is integrating data with other systems to ensure seamless communication and processing. The operations remain incomplete and unconnected, making it challenging to gain a holistic vision of financial data, increasing the risk of error in sales/leasing data, tracking cash flow, and outlay estimate. Poor integration often leads to imprecision in financial data and confines tracking of property-specific data appropriately, which in turn causes errors in accounting.
3. Extensive and Complex Real Estate Transactions
The real estate landscape has continuously evolved, making the business models layered and the leasing market dynamic. This has, in turn, made real estate accounting quite complex and taxing. Businesses need efficient accounting, which comprises detailed and robust documentation and data management capabilities. However, most real estate companies lack the resources to manage complicated transactions effectively and account for several details. This makes financial data management complex and challenging, resulting in several inaccuracies due to poor data management. In addition, as your business portfolio grows, the lack of data management scalability further makes things more complex and challenging.
How To Overcome These Challenges With REDA Property Management Tool?
REDA is an all-in-one ERP solution for real estate that runs on Salesforce. It has been designed in such a way that it can help you achieve seamless collaboration and perform all your accounting tasks in a single, easy-to-use environment. Below are some benefits that REDA provides in the accounting vertical.
- It offers full general ledger accounting for property owners, managers, and tenants. You must know how to review, edit and print ledgers for every property, owner, tenant, and bank account linked to the properties. To maintain accurate and auditable records, traditional accounting requires twice or thrice transaction entries. With REDA, no need to worry about transaction entries as they are automatically handled, eliminating the scope of error and saving your time.
- REDA allows accepting online rent payments via different payment options like PayPal, credit card, debit cards, and others from your tenants.
- REDA allows Property Managers to identify the cash distribution quickly. No checks to print, envelopes to stuff, or stamps to lick. For tenants, making payments to the house owners is quite simple through the application. The owner gets an electronic deposit into their account after the transaction is approved.
- With REDA, you can expect to achieve 90% accounting process automation. It can help you - discover insights, predict outcomes, find recommendations and act quickly with an AI-powered analytics platform.
- You can add a lease agreement with complete rental information. It can also provide automatic lease-ending reminders to both owners and tenants. Tenants/owners can also access rent dues or get rent reports. Owners can also generate rent receipts and send them to tenants through REDA.
- REDA can manage Warehouses, Inventory Check In/Outs, Warranties, Maintenance Contracts, Asset Allocations, Depreciation, Asset Inspections, and Purchase Orders under a single roof. It also provides seamless integration with native accounting workflows, document management, and approval processes which can be controlled even when you sleep.
- REDA also provides a comprehensive set of financial reports, providing the most relevant data quickly and easily.
Wrapping Up!
When choosing project management and accounting software for your rental or leasing needs, choosing a system that works for you is essential. For more information on REDA, feel free to contact us!
