Which new accounting tips should commercial real estate (CRE) brokerages start working on right now? The following three tips will help you update your business strategy to proactively meet a few of the accounting challenges facing CRE brokerages today.
- Utilize Mobile Apps Made for CRE Pros
Considering how much work CRE pros put in while driving from appointment to appointment it’s surprising that apps aimed specifically at CRE brokerages have lagged so far behind other industries. This year, several apps are being introduced that will make managing the many tasks that CRE brokerages have to handle more efficient.
Several of these new apps are making much of the work hands-free for busy brokers. When you foot the bill for a client lunch, you can download CRE accounting apps that enable you to scan the receipt with your mobile phone and upload it to the program for efficient expense reporting. Other apps combine this ability with features such as mileage tracking and report making.
- Improve Financial Reporting with Customer Retention Management Technology
Many brokerages are using customer retention management (CRM) technology to manage their address books. You also can find CRM platforms that allow you to do more than just manage your e-mail list. You should be able to calculate profit-loss statements, view historic data, and analyze your business finances. You also want to ensure that your CRM is compatible with your main network. It should be cloud enabled and accessible to each of your agents and brokers over secure connections.
- Get Ahead of the New Generally Accepted Accounting Principles for Lease Accounting
It is not just a good idea to stay ahead of Generally Accepted Accounting Principles (GAAP), but it’s mandatory for all CRE brokerages. We’re specifically talking about the recently enacted GAAPs that apply to lease accounting. Brokerages have some time to implement these new standards, but most must be in place no later than 2019.
Anything that is leased commercially, not just real estate, will be affected by these new standards. These GAAPs are aimed at increasing transparency for investors and shareholders. After the recent housing collapse, it became even more important for brokers and those associated with them to keep squeaky-clean books. All long-term leases will have to be included on the balance sheets for brokerages. Those assets also must be categorized either as finance or operating leases with different lease accounting rules for each.
If you are a commercial brokerage working abroad, how these new standards will affect International Financial Reporting Standards also will affect CRE brokerages. By implementing these standards now, brokerages can get a head start on competitors that are dragging their feet.
Contact your RINA representative to stay on top of the many accounting standards affecting CRE brokerages now and in the coming years.