8 Ways a CPM Technology Solution Can Drive Efficiencies in Your Real Estate FP&A Processes

8 Ways a CPM Technology Solution Can Drive Efficiencies in Your Real Estate FP&A Processes

January 04, 2023

Today’s real estate companies must navigate a wide range of challenges, including market volatility, fluctuating inventory, tightening regulations and shifting consumer demands. To succeed, organizations must have effective budgeting, forecasting and planning tools in place that align their long-term strategic plans with their day-to-day operating realities, so they can quickly adapt to business shifts.

Implementing corporate performance management (CPM) software can help real estate companies address market uncertainties and tackle industry-specific financial planning and analysis (FP&A) challenges. The following checklist highlights eight advantages of using a planning solution for your real estate firm. If these benefits resonate with your needs, it’s time to evaluate implementing a planning solution into your tech stack.

  • Provides access to meaningful, real-time data

    Your planning software should offer a complete picture of your organization by providing access to real-time data and reporting analytics, allowing you to make faster, more insightful decisions. It should also have revenue-specific features that strengthen your reporting, tracking and planning of your various revenue streams.

  • Offers robust revenue forecasting

    An effective planning solution provides accurate revenue projections from rent, recoveries, lease charges and prior years’ charging amounts. This allows you to better anticipate your organization’s expected income over a specific timeframe, which in turn can boost your profitability and help you more accurately plan for the future.

  • Includes custom marketing lease assumptions (MLAs) and inflation estimates

    Look for a solution that can support MLAs and inflation estimates in your budget. MLAs help you better calculate future income from a unit based on the fair market lease value, while inflation estimates allow you to factor inflation rates into your forecasting for more accurate predictions.

  • Supports agile scenario-planning and what-if functionalities

    Your planning software should include a scenario-planning functionality that enables a more effective what-if analysis than what is possible with spreadsheets. This allows you to explore a wide range of variables (price of the property, lease renewal probability, interest rate, debt yield, etc.) and assess how they can shift over the course of your investment and affect your investment goals.

  • Integrates with other real estate industry technologies

    Optimize your tech ecosystem by employing a planning solution that works with your existing real estate technology. Your solution should allow management, business leaders and the finance team the ability to access and share the same information, minimizing data redundancies and confusion by streamlining the ability to reconcile reports and easily compare alternatives.

  • Supports cash-flow modeling features

    Cash-flow modeling features allow real estate companies and property managers to prepare monthly or rolling projections to help your organization understand how much cash you have on hand, whether you have sufficient funds for planned investments, or whether you may need to obtain additional debt or capital for operations or investments.

  • Enhances communication

    By integrating functions and models, your planning solution should offer features that help communicate budgeting and forecasting to your leadership team, board members and stakeholders. Look for features like visual reporting, personalized dashboards and easy drill-down capabilities that allow you to effectively summarize and translate complex data points for any audience.

  • Scales with your growth

    A dynamic solution increases your insights and helps you better prepare for industry volatility and future growth. Look for a responsive planning solution that can shift to meet your evolving needs.

To learn more about selecting a financial planning and analysis software that best fits your organization’s needs, contact our experts.

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