Back-office efficiency is important for the success and growth of your commercial real estate (CRE) firm – especially in our current market. Optimizing the back office ensures streamlined operations, effective management of critical tasks and compliance deadlines, and improved productivity. For example, automation of routine administrative tasks, such as financial reporting and document management, allows employees to focus more time on strategic initiatives, client or tenant relationships, and revenue-generating activities.
Ask yourself the following three questions as you evaluate whether your firm’s back-office can handle the shift.
What’s Happening In the Commercial Real Estate Market?
From 2012-2022, the capital and commercial real estate markets experienced tremendous expansion. This expansion created opportunities for just about everyone in the CRE space to make money. However, the dynamic is changing and shifting expectations about the opportunities and returns created by real estate investments.
In this new dynamic, cap rates are rising, valuations are cooling, and debt marks are tightening. These factors are contributing to weaker returns. At the same time, tighter deal dynamics and deal structures for new acquisitions and dispositions may also jeopardize returns and ultimately the promote.
The compression and yield and lower asset valuations are expected to drive weaker returns.
Question #1: Does my back-office currently live in Excel or Outlook?
Many commercial real estate firms rely on spreadsheets and email to help manage their back-office operations. Although these tools can be useful, they also have limitations. For example, spreadsheet challenges include human error, poor data quality, and limited collaboration. Emails can also create challenges with data silos and breaches.
If you rely on spreadsheets and emails as your main methods of document/data storage, communication, recordkeeping, etc., you may find that your back-office is not exactly a well-oiled machine. Additionally, with siloed systems like spreadsheets and emails, your firm could experience roadblocks if an employee leaves the firm or has an emergency and is unable to come to work. In this case, you may not have insight into what that employee was working on or may have difficulties retrieving information accessible solely by that person. Also, this may create version control issues with documents, leaving uncertainty around whether or not the information is up-to-date.
How Entity Management Software Can Help: Entity management software, like EntityKeeper, centralizes data, automates processes, and streamlines your back-office operations. Entity management tools are designed to meet the unique needs of firms, ensuring more accurate and efficient management of your properties and transactions.
Question #2: Can I access important information quickly?
In the fast-paced world of commercial real estate, being able to access key information quickly is essential for making informed decisions. When your back-office isn’t operating at peak levels, you may find yourself searching through folders or waiting for someone to share documents to get the info you need. This can lead to costly delays in filing your reports and/or missed deadlines, and more.
How Entity Management Software Can Help: A document management system allows you to organize and retrieve documents efficiently. Specifically, EntityKeeper is a cloud-based solution that provides secure, real-time access to data from anywhere, promoting better decision-making and efficiency. EntityKeeper also acts as a single source of truth, ensuring updated information and documents every time.
Question #3: How am I managing compliance across legal entities?
Managing compliance across multiple legal entities can be complex. Regulatory requirements depend on the annual report you’re filing, state, business type, etc. Failure to meet such requirements can result in legal issues and financial penalties. Failure to adhere to compliance requirements can expose your firm to legal risks, potentially damaging your reputation and finances. Despite the availability of technology, many firms still manually manage legal entity compliance. Manually managing compliance is time-consuming and is often prone to errors.
The Corporate Transparency Act is one regulation where you’ll need to effectively manage compliance. Beginning January 1, 2024, CTA compliance will be an annual requirement for many companies operating throughout the United States. Amongst the other annual reports and other legal requirements by which your business must abide, it can be difficult to manage deadlines and requirements.
By planning and preparing for the Corporate Transparency Act to take effect, your organization can confidently comply with the new regulation and ensure that you meet the filing deadlines. An entity management solution, like EntityKeeper, can further streamline your processes to ensure ongoing compliance.
Note: EntityKeeper’s Corporate Services can be used to eliminate the need to manually govern all of your entity filings. Our team can help you file your annual reports to simplify compliance and ensure you meet your reporting deadlines.
How Entity Management Software Can Help: Entity management software automates the processes, like data sharing and annual reporting, that slow your organization down. Automating these tasks improves and builds confidence in the firm’s operations, boosting both efficiency and effectiveness.
As the commercial real estate industry continues to evolve, evaluating your back-office’s readiness can help you get ahead. If you answered yes to one or more of these questions, your back-office may not be prepared to handle the challenges and opportunities that may accompany the CRE shift. Embracing entity management software can be an important step toward a more efficient, competitive commercial real estate back-office.
Don’t let outdated practices hold your firm back. Contact us to learn more about how EntityKeeper can help you adapt and thrive in the changing landscape of the CRE industry.