In the world of real estate development, both project and financial precision are paramount. Developers must meticulously manage costs, budgets, contracts, and much more to ensure the success of their projects. Traditional accounting systems often fall short of providing both the project-oriented control and financial precision that real estate developers require.
We’ll explore the challenges faced by commercial real estate developers in estimating costs during project execution and how Real Estate Development Accounting powered by Acumatica addresses these challenges by offering the capabilities you need most.
Challenges Faced by Commercial Real Estate Developers
Real estate developers face several challenges when it comes to estimating costs while projects are in progress:
1. Complex Project Structures: Real estate projects typically involve multiple stakeholders, including developers, general contractors, subcontractors, and suppliers. Managing the complex web of financial commitments and costs can be overwhelming.
2. Timely Reporting: Developers need real-time access to critical financial data, including budgets, costs, contracts, commitments, loan draws, and project status. Waiting for financial closing delays decision-making and hinders project control.
3. Job Costing: Most job costing solutions for development are geared toward contractors, working from the detail level, or bottom-up project management. Such methods work well for construction but tend to make reporting very complex when managing an entire project, or multiple projects at a time.
The Need for Top-Down Accounting
Unlike traditional bottom-up accounting, developers require a top-down financial perspective. They need to see the big picture of all their projects on a single report rather than delving into detailed subcontractor or contractor perspectives.
Real Estate Development Accounting powered by Acumatica recognizes this need and distinguishes itself from other software solutions by focusing on project-oriented accounting.
• Project Perspective: Acumatica’s design places equal importance on the project perspective as it does on the financial perspective. All software modules and features are project-aware, making it easier for developers to manage projects effectively.
• Quick Overview: With our solution, developers can access a comprehensive view of all their projects on a single report. Detailed project reports are supported by auditable transactions tied to general ledger statements, providing transparency and control.
• Cash Flow and Profit/Loss: Acumatica’s top-down viewpoint allows developers to monitor both project cash flow and profit/loss on a single report. Multiple project budgets and revisions can be entered as information becomes available, providing flexibility and accuracy.
How Acumatica Real Estate Development Accounting Helps You Overcome the Challenges
Acumatica, backed by Anton Systems’ extensive experience in working with real estate developers, offers several key benefits:
1. Real-time Project Reports: Acumatica captures project cost and income activity at the cost code level, posting directly to designated accounts in the general ledger. This means project reports are always available immediately, eliminating the need to wait for general ledger closings.
2. Cost Visibility: Developers can track project costs, from budget to committed/contracted costs to actual costs, in real time. Additionally, Acumatica allows for factoring in forecasted changes, providing a more accurate view of estimated completion costs.
3. Management Insights: Acumatica goes beyond the details to provide management with a top-level project status and the necessary detail levels supporting it. This level of control and precision enhances decision-making and project management.
Partnering with Experience: Anton Systems and Acumatica
Anton Systems has spent over three decades collaborating with real estate developers, crafting a solution that presents distinct viewpoints on project costing and financial reporting. Acumatica Real Estate Development Accounting, is tailored to meet the specific needs of real estate developers by offering project-oriented accounting, real-time reporting, and comprehensive financial control. If you desire precise project control and efficiency in your real estate development organization, consider our solution to transform your operations and deliver unparalleled accuracy and productivity. Contact Anton Systems today for more information or a demonstration and take a significant step toward achieving superior project management in the real estate development industry.