November 26, 2015

2012 Financial Tools: Key Specs


2012 Financial Tools: Key Specs

Real estate pros should evaluate financial management products and services on these criteria.

Financial management solutions come in many forms, but have two general flavors for practitioners: generic products that adapt to any business and highly specialized solutions developed specifically for real estate. Usually, an individual, team, or small brokerage can get by with standard, off-the-shelf tools. But the larger the company — and the more associates and listings — the better it will be to focus on solutions that have a focus on real estate.

These specialized financial management systems are usually bundled as part of an integrated suite of industry-specific tools, or easily integrated with other real estate modules from that vendor. In either case, business accounting and all it entails is only one aspect of a system that can also manage leads, clients, listings, marketing activities, and documents through closing.

At heart of all these products, though, is a database that you can use to keep up with financial details: prices, expenses, invoices, and payments. Those figures provide an overall financial picture of your business — in particular its profit and loss. The ability to retrieve and sort those numbers and render them in reports is the major benefit of these tools.

Today’s buyer also must decide between installed software or a cloud-based financial-management service. Because real estate involves sensitive numbers about clients and business, some want assurance that the data will remain exclusively theirs, safely stored on office hardware. For others, it’s not an issue; they see the “anywhere, anytime” access to data as a competitive advantage and they’re migrating to cloud services.

The shift to the cloud isn’t the only new trend in financial management, however. In this mobile era, your tablet or smartphone can be a capable front end to financial management; if you’re a mobile real estate professional who’s racking up expenses while courting buyers and sellers, many apps can document expenses in real time, ensuring that you don’t miss a business deduction.

Effective financial management hinges not so much on any one solution as it does on a process. But no matter how simple or sophisticated the system is, it’s only as valuable as the data you enter. With the right solutions, you’ll gain control over your numbers and have more time for clients and listings.