Two construction workers on site reviewing project

Improve Your Financial Management and Property Engagement

January 20, 2020

Improve Your Financial Management and Property Engagement

Synopsis
5 Minute Read

Harness a digital financial strategy to improve your costs, manage risk better and make more informed decisions. Find out more with MNP’s Daniel Caringi’s blog.

Daniel Caringi
Daniel Caringi
Partner

Investment and development prospects across the Canadian commercial real estate industry continue to pose unique challenges and opportunities. The shared constant across associations is the expectation of financial prudence and effective stewardship of assets under management. As a result, many associations are investing in informed decision-making technologies which offer better access to accurate and timely information.

Digital Finance a Growing Priority

The ability to anticipate and adapt to change is integral to staying relevant in today’s constantly evolving digital landscape. Disruptive innovations and evolving business models are changing tenant and investor reporting expectations and redefining how you engage in the industry.

As both society and corporations continue to grow increasingly digital, so do the demands to realign community and organizational priorities — to grow revenues in new markets and control costs to maximize profitability. Finance departments usually are the gatekeepers of this information and disseminate it to other parts of your business, such as operations and property management.

This reinforces the need for a digital finance strategy. Not only to report on the day to day, but also to model, budget and scenario plan for future disruption to your association and the assets you manage.

Seeing Further and Wider

A robust financial model remains one of the most powerful devices in your company’s tool belt to help evaluate the effects of market volatility. Client engagement is interactive; your financial and business models are important for optimizing the value of your assets, supporting your growth, profit and sustainability and maximizing community engagement in both the short- and long-term.

Some steps you can take to improve your decision making around digital strategy investments include:

Identify the backbone of your financial management operating system — If you’re just getting started as an owner-managed business, perhaps invest in an entry-level general ledger (GL) system to track engagement or augment your existing finance function.

If you’re an association with a dedicated finance team, you may benefit from standardizing on a more robust enterprise resource planning (ERP) system.

Use financial and operational models for effective scenario planning — Using spreadsheets to run your business? Perhaps it’s time to consider a dedicated financial planning and analysis platform.

  • Build adaptability and transferability to finance as a partner to other departments.
  • Make organizational agility and insightful financial analysis possible across all departments.
  • Support efficient financial processes and critical performance management capabilities.

Make Better Predictions

Without historical data from current investments — or markets to understand the likelihood of future ones — it's difficult to forecast revenue and operating expenses. This type of scenario planning is often done manually through spreadsheets. However, business analytics technology, in conjunction with industry-specific ERP systems, has become increasingly popular for combining financial and operational data in a centralized system.

This allows for automatic data collection to track and analyze financial and operational information, resulting in:

  • More accurate business planning, budgeting, forecasting and scenario planning
  • More predictable revenue and expense management
  • Increased operating margins and organizational flexibility
  • Better communication and buy-in between groups (e.g. internal, board, tenants)

Beyond the Balance Sheet

Business leaders and properties often rely on finance to provide the right information in real time to help make informed decisions and drive operational effectiveness. By leveraging data from your existing ERP and transforming it into actionable insight through financial planning and analysis technology, finance supports the ongoing and future success of the business and assets under management with better collaboration, company-wide standardization and visibility to individual property management.

The need for commercial real estate to plan and revise budgets is critical, especially when it comes to protecting reserves, understanding maintenance fees, costs and understanding the effects of aging properties on resales. With an integrated planning approach, driven by a holistic digital finance strategy, technology is transcending your association to your portfolio properties.

Understanding what processes you can automate to improve decision-making, optimize costs and manage risks is crucial in setting a foundation for continuous improvement. Commercial real estate businesses of all sizes can look to technology as a change enabler and harness a digital finance strategy to translate strategic planning into tactful execution that drives both behaviour and assets under management performance.

For more information, contact Daniel Caringi, Partner, Consulting and Technology Solutions, at 416.596.1711 or [email protected]

Insights

  • Confidence
    Holding a portfolio on one hand, comparing data on another

    July 28, 2021

    How to optimize value from an Internal Audit co-sourcing partnership

    Co-sourcing your internal audit function can help you navigate several contemporary challenges — including the need for greater agility and subject matter expertise, as well as cost and resourcing pressures. Here we investigate practical steps to find the right vendor and make this relationship as seamless, targeted, and cost effective as possible.

  • Progress
    person reviewing graphs on their phone

    July 26, 2021

    Automating finance, so you can focus on your business

    Cloud accounting and bookkeeping solutions allow you to focus on the critical parts of your business instead of shuffling through paperwork every week.

  • Progress
    ""

    July 22, 2021

    Cloud accounting and bookkeeping can transform your real estate and construction operations

    Priorities are changing after the long hours that came with navigating COVID-19. Here’s how you can free up time to focus on what really matters.