Over the past few months, MRI Software has been showing off software solutions, connecting with clients and Partners, and planning for the future at three different users conferences around the globe: one in the EMEA region, one in APAC, and one in South Africa. We’re always excited to engage with our global clients, and getting the chance to do so during the past year has been an awesome experience. We love sharing the progress we’ve made with our clients, and we’re thrilled that they are riding the revolution with us!

South Africa

With over 200 attendees, a day full of product sessions, and our Partners in the middle of it all, our clients got a first-hand look at the integrations and services we provide exclusively for them. We wanted to give a special “thank you” to the Partner sponsors of our South Africa users conference, Core Vision and insightsoftware!

During our time in Johannesburg, we took deep dives into our property management, investment, and valuations solutions. MRI Data Management Services helps collect, aggregate, and process data for clients so that they can refocus their efforts on managing investments. We also explored the capabilities of Investment Management, a comprehensive software solution that helps assess risk and exposure, consolidate the information, and share it with investors, board members, or other stakeholders.

APAC

With more than 150 attendees and two-and-a-half days of programming, MRI’s APAC users conference in Sydney was a huge success. It wouldn’t have been possible without incredible Partners and outstanding sponsors such as Loci Solutions, TopUp, Core Vision, and LEVERTON!

We covered many different products at the conference and invited our clients to take a closer look at the software solutions and services they use on a day-to-day basis. Commercial retail recoveries, which was one of the many solutions showcased at the event, helps calculate and process complex reconciliations to make life easier for our commercial clients. In the same vein, MRI Fixed Assets took center stage as a product with multi-currency capabilities that meets both internal accounting standards and local tax requirements. Debt Management and Fund Modeling also stood out as spotlight solutions for improving operational efficiency and building a strategic plan for your business.

EMEA

At our EMEA users conference in London, we were thrilled to gather feedback from our clients and hear about the kinds of challenges they face every day. We can’t succeed without our spectacular clients, and we especially couldn’t have pulled off such an event without our Partner sponsors, Core Vision, LEVERTON, and insightsoftware.

In addition to showing off product features and sharing updates, the conference delivered on all the things you’d expect from a great MRI experience – product spotlights, company and acquisition updates, an inspiring keynote address, and more! With over 600 attendees joining us in the UK, the first MRI EMEA users conference truly exceeded our expectations.

As we look back on this exciting time of growth at MRI, we’d like to give a very special “thank you” to LEVERTON and insightsoftware, who have sponsored three of the four users conferences we’ve held in the past year, including our North American event in Atlanta in October 2018. We are incredibly thankful for their support, and the support of all our Partners, sponsors, and clients. We look forward to riding the revolution together!

This article was written by Chad Nicholson, Enterprise Account Executive at VersaPay. He is an established expert in Commercial Real Estate accounts receivable, helping CRE organizations across North America better manage their AR and serve their tenants.

Each week, I speak to several accounting, collections and lease administration professionals in the property management and commercial real estate space. In all of those conversations, there is one question that I will always be sure to ask: Do you accept credit card for commercial real estate? The answer usually falls on the spectrum of a ‘yes, but…’ to a resounding ‘no’.

Many landlords and property managers are wary of accepting credit card for commercial real estate for one primary reason: It’s too expensive. In their view, there’s little to no point in paying transaction fees on credit cards when tenants pay via check or ACH. Both are, in theory, low-cost methods to accept payment, but when you break down the numbers, the logic doesn’t hold up.

How much does it really cost to process a check? Lockbox fees, bounced checks, chasing short payments, “checks in the mail” delays and labor intensive cash application are just the start of the problems. Many tenants want to pay with credit card for commercial real estate, but by not accepting them, you may be missing out on providing a satisfactory tenant experience. “Sorry, we don’t take credit card,” might seem wise now, but it might just cost you in the long run.

So how do you reconcile the desire to be cost effective with the need to provide a great payment experience for your tenants? Let’s think about this strategically. It’s important not to think about credit card acceptance as a line item cost and instead, view it as the strategic tool it is. By tailoring credit card acceptance rules across your organization, you can steer behavior and affect key payment metrics, including speed of payment. Below are three ways you may consider accepting credit card to create a better tenant experience while helping you manage fees and maximize profits faster.

1. Limit the transaction size and timing

Create an “offer” or deal that allows you to accept credit card if the tenant pays within five days and the transaction is $5,000 or less, for example. This would incentivize tenants to pay their rent earlier and it also gives you control over the fees.

2. Accept credit card through means of “AutoPay”

For tenants whose primary goal is to pay rent on time with limited staff interaction, give them the ability to pay with credit card if they agree to switch to an “AutoPay” program. This limits many of the payment risks associated with short-term tenants. It helps you get paid on time and it also saves you the effort previously required to chase down tenants who are high touch on collection but represent low revenue.

3. Pass on the fees

Pass the fees on to the tenant by charging a convenience fee. With this option, you eliminate incremental costs while still providing the functionality to those tenants who really want it. Although charging the tenant more money may seem counterintuitive to providing a better tenant experience, you might be surprised at how many tenants would prefer this option in the long run. As most credit cards come with points or cash-back offers, this option allows you to collect rent faster while your tenants earn a trip to Hawaii – win/win.

Commercial real estate companies are using credit card acceptance as a tool to enhance the tenant payment experience and improve ADP (average days to payment). By enabling a secure PCI compliant tenant portal and adding sophistication around credit card acceptance, you can gain control over costs and provide tenants the experience they likely won’t forget.

Visit the VersaPay website to learn more.

If you handle property accounting for commercial real estate, particularly involving retail or office tenants, you’ve probably run across the challenge of managing real estate expense recoveries. These expenses don’t fit nicely into your well-organized GL, and they typically require manual tracking of complex reconciliations. So, what exactly are real estate recoveries, and what’s the best way to manage them?

What are real estate recoveries?

Commercial real estate expense recoveries and retail recoveries refer to the shared expenses that a landlord passes on to its tenants, and subsequently recovers by generating an invoice to the tenant for their pro-rata share. Recoveries are also referred to as outgoings or Common Area Maintenance (CAM) charges. These shared expenses can include utilities, services, repairs, maintenance, property taxes, insurance and other additional expenses.

Tenant leases often include provisions that outline their responsibilities for paying a portion of shared property expenses. Net leases and gross leases take different approaches to this:

• Net Lease: A lease in which there is a provision to pay, in addition to base rent, certain costs associated with the operation of the property.
• Gross Lease: A lease in which the tenant pays a flat sum for rent, out of which the landlord pays all recovery/CAM expenses

Challenges of managing recoveries in accounting

Without careful planning and separation of recoverable and non-recoverable items in your chart of accounts, the process of managing real estate recoveries will be complex. Property accountants should choose standardized codes and nomenclature to identify and group recoveries together. This can make the process easier, but exceptions and inconsistencies will occur — in some cases, one GL may be tied to more than one building, which makes it difficult to keep track of the expenses that are unique to each building.

How to manage retail recoveries

MRI Commercial Management clients have access to retail recoveries tools that make it easier to calculate and process complex reconciliations. Let’s take a general look at the steps involved in billing for recoveries using MRI.

Calculate monthly recoveries and estimates

The recoveries process begins with calculating monthly outgoings and estimates, which is typically performed at the end of budgeting season. First, we’ll need to create the budget for the next year, based on the pro-rata share for each tenant, then create invoices to the tenants based on that estimate. At end of year, we’ll reconcile those estimates and adjust them based on actual figures, while taking into consideration any provisions in the lease agreement.

• Get GL expenses – Based upon building-level recovery profiles, load the actual figures for accounts into each of the expense pools.
• Make adjustments to expense pools – Adjustments can be made to each line item in the expense pool.
• Load the estimate worksheet – Each tenant’s unique recoveries profile is applied to the expense pools to calculate out a total forecasted recoveries payment amount along with the monthly estimates.
• Make adjustments – Adjustments and overrides can then be made at the tenant level.
• Bill next year’s estimate charges – Raise the charges on each tenants’ account using the recoveries estimate income category. This will now sit in the recurring charges table on each lease and will be invoiced as part of your normal monthly invoicing process.
• Generate recoveries invoice – Run a report outlining the details surrounding the estimate for next year that can be sent out as a letter to the tenant.

Perform annual recoveries reconciliations

These steps are typically performed a few months after year-end close. Follow the same steps from above, but this time, bill the actual reconciled amount due instead of next year’s estimates. Raise the charges on each tenants’ account using your calculated reconciliation amount. This will be added to the tenants ledger as a one-time charge/credit and will get picked up in the next invoice process.

Are you tasked with managing retail recoveries? If you’re already using MRI Commercial Management and accounts payable software, the additional retail recoveries functionality can automate the billing process and shorten the time it takes to perform a reconciliation. Smooth out the cashflow for annual property expenses with estimated monthly billing and generate detailed invoices to your tenants, all while eliminating errors and providing evidence to support calculations.

To see best practices for how to set up retail recoveries in your MRI system, watch the webinar here.

The roles and responsibilities of the Chief Financial Officer have shifted dramatically in the last decade. CFOs are no longer just charged with maintaining a company’s finances; they now have new roles and responsibilities around business growth, innovation and technology. As part of the new normal, today’s CFOs have an opportunity to excel in these areas by leveraging integrated financial software solutions to drive the success of the business.

When it comes to facing the challenges of today’s market, financial operators don’t have to go it alone – technology tools can make a big difference in how companies overcome reoccurring obstacles. Let’s take a look at some of the financial software solutions from MRI Software that real estate CFOs can use to thrive in the new Office of Finance.

Bolstering finance and freeing up operations

When dealing with a large portfolio, managing debt can be a cumbersome and unwieldy process when trying to assess which loans cover which properties. MRI Software’s Debt Management provides CFOs with top-of-the-line functionality that calculates debts through the life of a loan. This tool is a great solution that integrates with a company’s preferred accounting platform and can reduce clicks and manual processes to improve internal operations. By automating the debt management process, CFOs can extend their accounting platform, gain control over all their debt information, and reduce reliance on spreadsheets.

Managing your own data in-house takes hours to complete, especially if your data is being aggregated from numerous paper-based sources or spreadsheets. MRI’s Data Management Services eliminates these problems by bolstering the data aggregation and organization process by collecting data from disparate sources, controlling the flow of that data with automated workflow systems, and mapping the data in a way that applies your specific business rules. This creates a timely, consistent, and more accurate data set. By cutting out the process of manual data entry, Data Management Services dramatically reduces the margin of error for data analysis. You manage the investments, and let MRI manage the data.

Harnessing the power of analytics

When it comes to organizing high-level data, it’s important that the CFO have a clear view of how data relates to the big picture of the organization. Analytix Portal & Data Store offers business intelligence capabilities to help transform data into actionable insights. This solution allows the user to identify trends by property, property type, region, and other attributes. It drives fast and accurate business decisions through data visualization, portfolio analysis, and executive-level dashboards. With the ability to easily identify trends and outliers across the portfolio and drill down into the data behind them, the Office of Finance can drive strategic leadership decisions for the business.

Optimizing real estate investments

For real estate firms, mitigating risk and optimizing investor returns are some of the most important aspects of investment management. MRI offers an entire suite of flexible financial software solutions that are aimed at maximizing both internal efficiency and external reporting. One of the pieces of this suite, Investment Central, allows firms to efficiently store and manage data in a central repository. In addition to optimizing asset management and investor reporting, Investment Central offers full lifecycle asset management, comprehensive risk management, and automated investment workflows and processes. Investment Central provides the ability to manage data with the help of visibility into key metrics and increased data accuracy, creating a more informed portfolio strategy.

Investor Connect is another investment management solution that makes the critical task of reporting to stakeholders easier. A comprehensive, web-based portal for investment analysis and report distribution features anytime access, investor-specific dashboards, flexible reporting, and transparency. From portfolio insights to property-level details, Investor Connect can help firms attract new investors and build current investor confidence with streamlined, comprehensive investment analysis and report distribution. With support for all asset classes and investment structures, Investor Connect eliminates manual data entry and frees your staff to focus on business-critical initiatives.

Many real estate organizations today spend large amounts of time setting up funds, consolidating financial statements, and reporting to investors, but MRI Software’s Investment Accounting helps save time and improve accuracy by automating these manual processes. With Investment Accounting, drilldown features and an investor portal make the everyday responsibilities of the Office of Finance easier to achieve.

Fund Modeling, Asset Modeling, and Valuations are all MRI Investment products that give your business a competitive advantage by automating processes, introducing efficiency into internal operations, and assessing the value of properties. With this software, CFOs and other strategic executives have the ability to use quick and accurate modeling to make better business decisions, build stakeholder confidence with agile performance modeling, and enable analysts to easily value commercial assets.

In today’s fast-paced market, the CFO plays a larger role in their company than ever before. Adapting to change and leveraging financial software solutions to drive the business forward can put your business on the path to success in the new normal.

Technology and regulatory necessity have driven Chief Financial Officers to take on more responsibility in their companies. As a result, every CFO needs to excel in three main areas that may not have fallen under traditional CFO roles and responsibilities: understanding the operations of their business, driving innovation both technological and procedural, and reporting financial results to various stakeholders.

For a company to thrive in today’s climate, the CFO should be acting not just as the person in charge of the company’s financial plans. The successful CFOs of the day are keepers of data and educators. A CFO needs an intimate knowledge of the business to then educate internal and external stakeholders and investors about the company’s financial results, show how those results can be bolstered by technology, and identify strategies that can be deployed across different departments to support compliance and, furthermore, financial success.

Understand how the business grows

In order to lead a successful finance department in today’s ever-changing market, a Chief Financial Officer needs to cultivate a deep understanding of his or her business. Fulfilling the CFO roles and responsibilities such as closing the books on time, leading the charge to ensure regulatory compliance, and keeping track of the company’s finances, will be more effective and impactful through an understanding of how the business scales. What drives growth? How must a company operate within the market to succeed? These questions should be top-of-mind for CFOs.

As new financial regulations have been introduced over the past decade, CFOs have been pushed closer to the numbers of their business. Tasked with making sure their organizations are compliant, CFOs need a deeper understanding of the business drivers and key indicators – and not just financial or transactional. While understanding ROI is crucial, CFOs need to be able to evaluate their company’s portfolio performance in order to identify areas of concern and opportunity and play a role in setting the strategic direction of the organization with other senior leaders and investors.

Drive innovation and emerging technologies

As we progress further and further into the digital age, organizations are feeling the pressure from investors to adopt new technology to cut down the cost of doing business and meet regulatory goals. Given their position, CFOs have the top-level view of the business’s finances which, matched with an understanding of emerging technologies, can help meet investor needs. Cloud-based solutions, strategic partnerships, and system roadmaps are just a few of the technologies that can be leveraged to improve performance and efficiency, and CFOs should be constantly assessing new solutions that could benefit their business.

Implementing new software solutions, however, is not the only effective way to shake up daily processes. The Chief Financial Officer is also in the perfect position to take the reins in driving innovation as it relates to discovering new technology solutions and practices to improve operational efficiency and break information silos between departments. As overseer and analyzer of the company’s financial data, CFOs have all the information at their fingertips to identify areas that could benefit from a reorganized process. Introducing new, data-based ideas can also help cut operational costs and optimize workflow.

Communicate financial results

Chief Financial Officers have a responsibility to stakeholders (both internal and external) to report financial results and other important metrics. CFOs are no longer able to simply bring profit/loss reports and balance sheets to external stakeholders – investors want to know the explicit details as to where the business stands in each market. In addition to this, CFOs of real estate organizations are also in a unique position to report the ROI of specific properties to individual investors. This way, CFOs can give investors insight into the exact value and performance of individual properties and portfolios.

CFOs should also be reporting financial results to internal stakeholders and training teams such as marketing and operations on the ways to leverage this data. Delivering information regarding sales history, trends, and pricing models to marketing can lead them to improve their strategic planning by analyzing the bigger picture. Presenting cost analyses, productivity models, and capital expenditures to the operations team also gives them the opportunity to adjust their practices and plan out new strategies.

In today’s rapidly-changing business climate, too many companies fall behind the curve of change and struggle to get back on their feet. Whether the challenge looks like operational inefficiency, seemingly-cumbersome regulations, or even unforeseen financial obstacles, CFOs have the ability to take leadership in new ways to help their companies stay ahead of the curve, and more so, to prepare for whatever challenges may face their business. Learn more about the new roles of the Chief Financial Officer and how they affect the way companies do business.

Today, real estate organizations have access to more data than at any other time in history. Data can be leveraged to analyze ROI, report to investors, and develop strategic plans, but a reliance on data could become a weakness if it’s not managed properly. Without reliable real estate data management services, companies could theoretically find themselves basing strategic decisions off of incorrect reports and information that was not accurately recorded.

The way that data is curated makes a difference. Gathering the right information is only one piece of the puzzle — arranging it in a way that makes sense requires a repeatable process that aggregates data from disparate sources to drive meaningful decision-making.

Why use real estate data management services?

Efficient data management is the key to developing strategies that can elevate your business. Think of your investment strategy as a house. Data management is the brick foundation that holds everything up, and inefficient management of that foundation can put the rest of the structure at risk. Manually processing and collecting data, using out-of-date spreadsheet technology, dividing information into silos, and integrating data are all considered inefficient forms of data management that are either too cumbersome or too prone to human error to be relied upon consistently.

When processing and aggregating your data, you need to be trusting in real estate data management techniques that preserve the integrity of the raw data. The solution to inefficient data management isn’t comprised of simple changes on the process level; investing in real estate data management services is an effective way to bring efficiency back into the data collection and management processes. You need an enterprise-level special repository, a specialized real estate data model with curated data, and on-demand reporting and analytics to properly manage data so that your organization can analyze it and use it for modeling and planning.

What goes into aggregation of accurate data?

While these steps serve as a sort of data lifecycle, it’s crucial that the data be aggregated, organized, or managed efficiently in the first two steps. Failure to do so could result in less valuable data.

• Step 1: Aggregating and transforming the data
• Step 2: Analyzing the data and managing it
• Step 3: Modeling and planning based off what was collected
• Step 4: Reporting to investors and communicating to the company

Company information from the past, present, and the forecasted future should all be gathered together when preparing to analyze data. Historical asset characteristics, historical asset performance, and historical risk should all be aggregated and overlaid against information from the present, such as on-demand performance monitoring and attribution analysis. Predictions and future calculations that should also be aggregated and considered include transaction simulation, scenario analysis, and risk mitigation.

Tools and techniques used in real estate data management

The data management services offered through MRI Software are designed to process high-level information and deliver the results back to you in the most efficient and effective way possible. First, we collected the data that you submit to us through emails, documents, and other formats, then that data is uploaded into MRI Software’s workflow systems. After this has been done, the data is prepped and reviewed by specialized DMS analysts, and finally, it’s delivered back to you through one of our data management services.

Learn more about MRI Software’s various real estate data management systems and the most efficient ways to collect, aggregate, and process data.

“How do I get rent reminders to my residents in an effective way?”

This is one of the many questions multifamily property managers struggle with as the prevalence of convenience-centered technology grows stronger. Online rent payment portals make it easier for residents to pay their rent, but sometimes they still need a reminder.

Reaching residents through email isn’t always a timely method, so the natural next step is to send rent reminders by text message, guaranteeing that your residents see the notification right away, wherever they are.

How to remind a tenant to pay rent

In today’s world, where small computers follow us around everywhere, text messages are more optimized for sending and receiving messages quickly and in an informal setting. Emails are traditionally more formal than text messages, but that formality also makes emails easier to ignore, especially for tenants who are already behind on their rent. It’s for this reason that rent reminders have become more prevalent and effective when sent via text or SMS messaging.

Think of weather alerts that can be sent through smartphones. It’s uncommon to receive emails on this topic, because it’s important for those messages to be seen right away. The same rule applies for rent reminders; they typically can’t wait. If residents receive texts from their landlords, then there’s a sense of urgency – a sense that this message needs to be addressed.

Choosing the right way to text rent reminders

Even though sending a rent reminder via text message can imply that the situation is serious, it’s important to know both when and how residents should be reminded of upcoming payments or notified about late rent payments. Choosing the proper language in your text message and knowing when to text a resident about their rent can help convey the importance of the situation while also giving them time to respond accordingly.

Let’s look at an example. Texting a resident in the middle of the day might be advisable given that most residents are more likely to be on their phone at that time; however, if the language of the message adds up to “your last two months is due in 3-5 hours and you will be evicted if you do not pay on time,” it is unlikely that either party will end up satisfied.

Reminding residents about their rent payments shouldn’t be something you do once on the day rent is due and hope that it comes in on time. Landlords or property management offices should send a text message to a resident one week before the final due date, and remind them once more two days before the due date.

When it comes to phrasing your rent reminders, you should be crafting your texts in the same way people craft all text messages – with courteous urgency. For example, the ideal rent reminder could look something like this:

“Hi, Resident Name. This is Landlord Name. Just wanted to remind you that your rent is due one week from today. Please contact us immediately if you are unable to pay by this date.”

Using software to send rent reminders

While sending rent reminders through an instant notification system like text messages may be the most effective way to reach residents, there are different methods that allow one to do that. Instead of sending these reminders through a personal cellular device, specialized property management software can be used to send these notifications. This software can enable property managers to send instant communications for a variety of messages, including rent reminders, weather alerts, maintenance notices, or announcements.

Keeping an open line of communication with your residents is a critical part of multifamily property management. Sending your residents text message reminders about rent payments is one of the most effective ways you can keep them in a loop and receive your payments on time, but there are also other ways to communicate effectively with your residents. Learn more about how you can streamline your resident communications and, by doing so, improve resident satisfaction and retention.