4 cash management challenges in real estate companies (and how to fix them)

When speaking of the early, rapid growth phase of Dell Computers, Michael Dell famously remarked, “We were always focused on our profit and loss statement. But cash flow was not a regularly discussed topic. It was as if we were driving along, watching only the speedometer, when in fact we were running out of gas.”

Dell and his team eventually realized that, while driving the company forward, minding both the speedometer and the gas tank were necessary. Speed could only tell him how fast they were going. They needed to rely on the fuel gauge to know how far they could go.

Commercial real estate faces the same reality. Strong occupancy, rising rents, and healthy P&L statements may suggest business is trending in the right direction, but these metrics don’t always reflect the full picture.

Cash in real estate can move unevenly across properties and is often impacted by general market volatility and expensive CapEx. Without clear visibility into cash flow and solid cash management practices, companies can still find themselves struggling to service debt, fund projects, or respond to unforeseen events – despite things looking good elsewhere.

As real estate portfolios grow and operations broaden, managing cash effectively becomes increasingly complex. Many real estate firms recognize the need for better cash visibility and treasury management, yet several challenges continue to stand in the way. Understanding and fixing these obstacles can keep your business moving forward at just the right speed.

Four cash management challenges for real estate

1. Irregular and unpredictable cash flow

Cash inflows and outflows can vary widely, making it harder to cover larger costs and solidify growth plans. Several factors can cause these peaks and valleys, such as inconsistent revenue. Instead of receiving steady, regular, and predictable cash, these companies often wait on things like rent income, lease renewals, or sales of company properties to come in. Cash availability can also be highly impacted by seasonality and broader market conditions.

Volatile cash flow can create problems with covering fixed costs, prevent investment and growth, and even lead to rushed, risky financing decisions.

2. Limited real‑time visibility across properties and accounts

Real estate companies manage myriad properties and entities and often have a complex bank account structure where each property has its own bank account. Let’s say that translates into 60 bank accounts distributed across 20 banks for an East Coast real estate company. To know their balances and cash positions, the treasurer may need to remember 20 different passwords, log in to 20 different bank portals, and export 60 different bank statements (possibly in varying formats). The data must then be manipulated into a spreadsheet or fed manually into a financial tool. Once all this is done, the company might finally be able to know how much cash is on hand – at which point that information might already be outdated and inaccurate.

When a real estate company isn’t clear on how much cash it has, what accounts contain that cash, and whether the cash is readily accessible, it’s a lot harder to know if it can cover outgoing payments and expenses or if it has funds that should be invested.

3. Heavy reliance on manual processes

Pulling down bank account balances from individual bank portals and using spreadsheets to track financials is just one of the many manual, time-consuming processes that hinders cash management in real estate companies.

Teams spend time matching bank statements, ledgers, and other sources by hand or with spreadsheets to ensure the cash balances in the bank match the company’s internal records. Besides being slow, error-prone, and risky, this manual process can obscure the company’s true cash position as everyone wonders if the data they see is actually correct.

If the company still sends payments via paper check, risk of poor cash visibility and overall cash management also increases. Once checks are sent, they often create financial blind spots due to slow processing. Check payments impede cash flow visibility, slow down reconciliation, and limit forecasting and planning.

The more manual processes in place – and the more time employees spend time on non-value added tasks – the more chances there are of errors, fraud, and bottlenecks.

4. Scaling cash management as the portfolio grows and diversifies

Real estate companies are frequently growing, bringing on new properties and all the transactions, bank accounts, systems, and financial complexities that go with them. Without standardized workflows or controls, companies often find cash management practices that may have worked when they had 60 properties no longer work when they have 75 or 100. Treasury will struggle to manage cash on spreadsheets as data volume grows, making them more prone to errors. Applying cash and reconciliations will take longer, leaving gaps in real-time cash visibility. Accurate forecasting will be a challenge as well.

On top of it all, growing via acquisition is expensive and can lead to big gaps between expenditures and revenue – impacting cash availability and the ability to make the right moves at the right time.

The costs of getting cash management wrong

When commercial real estate companies struggle with managing cash effectively and knowing where they stand financially, there can be a cascade of other problems to deal with, ranging from the day‑to‑day to the strategic.

One company I worked with was manually managing a $2 billion, 13-week forecast in a spreadsheet – with a variance of 10%. That’s a significant amount of money for any company to be making guesses about.

On a micro level, there will be difficulties answering basic questions like what’s been paid, what’s still pending, and how much liquidity is really available. This uncertainty can lead to delayed vendor payments (and strained relationships), manual workarounds, and fire drills at the end of the month. Plus, it will likely be extremely difficult to forecast cash accurately or spot issues before they impact the business.

Zooming out, these gaps undermine confidence in future plans, slow decisions regarding investments and debt, and increase financial risk. Without a clear, timely view of cash and solid processes for managing and optimizing liquidity, finance teams are left reacting instead of strategizing.

How leading real estate companies are addressing cash management challenges

To reduce risk and improve agility, many real estate companies are rethinking how they manage and monitor cash. Rather than piecing together data from disparate systems and spreadsheets, they’re centralizing cash management. This approach helps teams understand cash availability, fund projects with confidence, and put idle funds to work.

Solutions like Bottomline’s Global Cash Management Hub support this shift by bringing bank balances, cash positions, and settlement activity into a single view. With timely, trusted data, finance teams can reduce manual effort, improve forecasting, and make more deliberate decisions about how and when cash gets deployed.

Cash management doesn’t need to be a pain

Cash management issues in real estate are often a byproduct of growth, complexity, and systems as well as processes that can’t keep up. Larger portfolios make it very difficult to know where cash is, where it’s being used best, and how it’s flowing.

When cash activities are centralized and visibility improves, finance teams spend less time reacting and more time planning – putting cash to work where it’s needed most and helping the business continue pushing forward.

Ready to improve cash visibility and control? Learn more about Bottomline’s cash management offering and reach out to your MRI rep.