How to Improve Your Expenses and Financials
Digested from Property Management Insider
Accounting, purchasing and budgeting processes can be painful, but there are ways can save money and improve performance.
While accounting, purchasing and budgeting processes can be painful, there are ways for apartment companies to improve their efforts, Property Management Insider’s Tim Blackwell writes.
Blackwell suggests starting by selecting one accounting practice (either accrual or cash method) and incorporating spend management, which controls expenditures. “Through creation of a corporate spending policy, employees are held accountable for their purchases, which in turn reduces maverick spending site wide,” Blackwell writes.
Next, owners should identify likely expenses and income. They should forecast based on this information, but still be prepared for the unexpected.
“The seasons influence apartment operations, especially when it comes to budgeting for utilities,” Blackwell writes. “Benchmarking and tracking utility performance throughout the year, for example, is helpful to establish budgets for water electric and gas.”
Companies should also share accounting reports and data and create uniform spending processes. “A company that doesn’t have a standardized spending process with purchasing approvals established may be leaving money on the table,” Blackwell writes. “Without uniformity in spending, a property management company may pay different prices for the same items throughout its portfolio.”