Your path to a stress-free, successful year-end close in real estate and property management

This blog is written by insightsoftware, a global provider of reporting, analytics, and performance management solutions empowering organizations to unlock business data and transform the way finance and data teams operate.  

Year-end close is a critical process for any business, but it can be especially challenging for real estate and property management accountants. Your finance and accounting teams need a stress-free and streamlined year-end close for your business, but there are many common roadblocks, including: 

• Data source complexity – Managing complex FASB and SEC rules that affect your reporting. 
• Manual processes – The time-consuming and tedious process of copying/pasting data from multiple systems and merging it together for custom reporting. 
• No access to real-time data – Lack of real-time access to data for month-end, and the process of reconciling data can extend the number of days it takes to complete your month-end close. 
• Confidence erosion in reporting – Discrepancies and complexities in consolidating financial statements creates lack of trust in your data.  

The year-end close is pivotal for all businesses but poses unique challenges for accountants in real estate and property management, requiring extra attention due to industry-specific intricacies, such as: 

• Prepayments and unearned income from tenants 
• Depreciation and amortization of property assets 
• Finance charges and interest expenses on loans and mortgages 
• Reporting and compliance requirements from lenders and investors 

Year-end hurdles in real estate and property management 

Year-end processes aren’t just about numbers, they’re also about weaving a compelling narrative that accurately reflects your business’s journey. The reality for most real estate and property management organizations involves grappling with a multitude of data sources. 

Validating external information against the general ledger is just the beginning. Your accounting team faces the challenge of harmonizing data from various software systems. They need to be able to drill into journals, balances, sub-ledger accounting, and transactions to find and quickly fix reconciliation or data integrity issues. 

Your teams need near real-time views into property management software data in your MRI Software system to enable faster financial and operational reporting. 

It’s a delicate dance to synchronize all your reporting data when using these out-of-the-box tools, with discrepancies posing risks to confidence in your data that undermine trust in year-end reports. Restoring order to this chaos demands a disciplined approach, ensuring financial statements emerge crystal clear, consistent, and accurate. 

Traditional reporting tools may not be enough 

Your real estate and property management team may need to pair additional tools with the conventional reporting tools in core financial management systems. Many systems are unable to integrate diverse data sources and external software tailored for specialized purposes like billing, inventory management, or fixed assets. 

While business intelligence tools excel in analyzing trends and monitoring key performance indicators, they prove less adept at the meticulous, detailed analysis demanded by the intricate tasks of period closing. These BI tools can be challenging to use and force users from larger organizations who have an IT department to rely on IT to build and modify their operational and ad hoc reports. 

Therefore, your business could default to a less-than-ideal solution—manually copying from standard reports or data exports and pasting the information into Microsoft Excel. This repetitive process becomes particularly cumbersome when the source system undergoes frequent updates, introducing the potential for errors and inaccuracies each time the copy/paste routine is repeated. You need to eliminate manual data dumps and reduce reporting cycles by enabling both finance and business users to build refreshable reports using easy-to-configure, pre-built templates, or by creating a custom report in minutes. 

Solve your unique year-end reporting challenges 

For an efficient year-end close, your team can embrace tools that provide direct access to real-time information across source systems. This proves to be the swiftest and most effective strategy for automating complex year-end closing tasks. Let’s look at how insightsoftware’s Spreadsheet Server tool can help your real estate and property management finance and accounting teams overcome their specific year-end challenges. 

1. Unearned income from tenants:

Challenge: Accurately accounting for unearned income from tenants, particularly in commercial and retail spaces with advanced rent payments or lease incentives. 

Solution: Utilize Spreadsheet Server to connect to MRI data, creating custom Excel reports for detailed tracking. Employ formulas for revenue recognition aligned with lease terms and automate adjustments, ensuring compliance with lease accounting standards like ASC 842 and IFRS 16. 

2. Depreciation of property assets:

Challenge: Ensuring consistent accounting for depreciation of property assets, considering physical, economic, and functional deprecation to reflect their diminishing value over time and reduce taxable income. 

Solution: Leverage Spreadsheet Server formulas to connect with MRI data in custom Excel reports that showcase property assets, current depreciation and carrying amount. Using familiar Excel formulas alongside Spreadsheet Server formulas assures accurate calculations, recording, and periodic review of depreciation schedules and rates. This promotes confidence and ensures compliance with tax regulations (e.g., IRS Form 4562 and Schedule E). 

3. Finance charges and interest expenses on loans and mortgages:

Challenge: Accurately accounting for finance charges and interest expenses on loans and mortgages, critical for cash flow and profitability. 

Solution: Employ Spreadsheet Server formulas to create customized Excel reports detailing loans, mortgages, and associated charges based on data from your MRI system. Use the formulas to accurately calculate and record finance charges and interest expenses. Automate monitoring and management of loan-related impacts on cash flow and debt ratios. 

4. Reporting and compliance requirements from lenders and investors:

Challenge: Meeting reporting and compliance requirements from lenders and investors, delivering timely and accurate financial information. 

Solution: Utilize Spreadsheet Server to connect with your MRI system data, creating tailored Excel reports meeting GAAP, IFRS or NCREIF standards or the specific requirements of your lenders and investors. Leverage formulas for preparation and submission of required financial statements and reports. Customize and consolidate financial reports across properties, entities, and currencies, ensuring compliance and providing comprehensive financial analysis and visualization tools. 

This is all achievable through Spreadsheet Server, a solution purpose-built for finance and accounting teams that helps real estate and property management companies save time, create mission-critical reports, and provide stakeholders with better visibility into critical financial information. 

Now is the time to use Spreadsheet Server for year-end closing 

Spreadsheet Server from insightsoftware is an intuitive Microsoft Excel add-in that integrates with more than 140 on-premise and cloud-based data sources, including MRI solutions – without requiring any IT expertise. As a longtime partner of MRI Software, insightsoftware has helped many MRI clients improve real-time access to data for financial reporting and create custom reports that meet the needs of stakeholders and investors. Spreadsheet Server provides your teams with: 

• Insights across the business: Create ad hoc reports and drill down into the information that you need to make good business decisions. 
• Faster reporting than BI tools: BI tools were not designed to understand the unique structure of financial data, so they can be challenging for finance teams to use leaving you reliant on IT to build and modify your reports. Spreadsheet Server delivers fast, flexible reporting that typically saves finance teams 50-100 hours per year on reporting tasks. 
• Shorter reporting cycles with less effort: Create charts, graphs, maps, and other visuals that combine data from multiple applications in just a few clicks. Refresh reports with the latest MRI data at any time. 
• Access to real-time data: Find and fix reconciliation and data integrity problems and see your changes immediately reflected in your reports. Support all closing needs to be confident that decisions are based on consistent, reliable, and accurate information. 
• Ability to simplify complex reporting tasks: Create comparative reports with accurate, up-to-date data from previous periods without relying on data dumps of older data. 
• Easy, lightweight installation: Get up and running fast and enjoy a short time-to-value with a solution that installs in hours. 
• Secure data: Spreadsheet Server leverages the same security built into your MRI solution. The same credentials remain in place to ensure that users only see data that is relevant to their role and which they are authorized to access. 

Request a demo to find out if Spreadsheet Server is right for your real estate accounting team.