Your Path to a Stress-Free, Successful Year-End Close in Real Estate and Property Management 

December 11, 2023

Year-end close is a critical process for any business, but it can be especially challenging for accountants working in the real estate and property management sectors. Your finance and accounting teams need a stress-free and streamlined year-end close for your business. There’s no shortage of roadblocks, for example:

• Data source complexity: Managing complexity of FASB and SEC rules about reporting.
• Manual processes: The time-consuming and tedious process of copying/pasting data from MRI or Yardi standard reports and merging that with any other relevant data (possibly from other systems) for relevant reporting.
• No Access to near real-time data: Lack of real-time access to data for month-end, and reconciling contribute to financial processes such as month-end close taking days to complete.
• Confidence erosion in reporting: Discrepancies and complexities in consolidating financial statements put confidence in data at risk.

The year-end close is pivotal for all businesses but poses unique challenges for accountants in real estate and property management, requiring extra attention due to industry-specific intricacies, such as:

• Prepayments and unearned income from tenants
• Depreciation and amortization of property assets
• Finance charges and interest expenses on loans and mortgages
• Reporting and compliance requirements from lenders and investors

Year-End Hurdles in Real Estate and Property Management

Year-end processes aren’t just about numbers, they’re also about weaving a compelling narrative that accurately reflects your business’s journey. The reality for most real estate and property management organizations involves grappling with a multitude of data sources.

Validating external information against the general ledger is just the beginning. Your accounting team faces the challenge of harmonizing data from various software systems. They need to be able to drill into journals, balances, sub-ledger accounting, and transactions to find and quickly fix reconciliation or data integrity issues, which can be maintained throughout.

Your teams need near real-time views into property management data in MRI and Yardi, to enable faster financial and operational reporting.

It’s a delicate dance to synchronize all your reporting data when using these out-of-the-box tools, with discrepancies posing risks to confidence in your MRI and Yardi data that undermine trust in year-end reports. Restoring order to this chaos demands a disciplined approach, ensuring financial statements emerge crystal clear, consistent, and accurate.

Traditional Reporting Tools Fall Short With Your ERP Data

For your real estate and property management team, relying on conventional reporting tools proves insufficient because the tools packaged with core financial management systems often fall short. They struggle to handle data from diverse financial systems and external software tailored for specialized purposes like billing, inventory management, or fixed assets.

While business intelligence tools excel in analyzing trends and monitoring key performance indicators, they prove less adept at the meticulous, detailed analysis demanded by the intricate tasks of period closing. These BI tools can be challenging to use and force users from larger organizations who have an IT department to rely on IT to build and modify their operational and ad hoc reports.

Therefore, your business could default to a less-than-ideal solution—manually copying from standard reports or MRI and Yardi data exports and pasting the information into Microsoft Excel. This repetitive process becomes particularly cumbersome when the source system undergoes frequent updates, introducing the potential for errors and inaccuracies each time the copy/paste routine is repeated. You need to eliminate manual data dumps and reduce reporting cycles by enabling both finance and business users to build refreshable reports using easy-to-configure, pre-built templates, or by creating a custom report in minutes.

Solve Your Unique Year-End Reporting Challenges

For a seamless and efficient year-end close, the key lies in embracing tools that provide direct access to real-time information across your source systems. This proves to be the swiftest and most effective strategy for automating the complex tasks associated with year-end closing. Different industries face different obstacles when it comes to finalizing their accounts. Let us show you how insightsoftware’s Spreadsheet Server tool can help your real estate and property management finance and accounting teams overcome their specific year-end challenges.:

1. Unearned income from tenants:

Challenge: Accurately accounting for unearned income from tenants, particularly in commercial and retail spaces with advanced rent payments or lease incentives.

Solution: Utilize Spreadsheet Server to connect to MRI and Yardi data, creating custom Excel reports for detailed tracking. Employ formulas for revenue recognition aligned with lease terms and automate adjustments, ensuring compliance with lease accounting standards like ASC 842 and IFRS 16.

2. Depreciation of property assets:

Challenge: Ensuring consistent accounting for depreciation of property assets, considering physical, economic, and functional deprecation to reflect their diminishing value over time and reduce taxable income.

Solution: Leverage Spreadsheet Server formulas to connect with MRI and Yardi data in custom Excel reports that showcase property assets, current depreciation and carrying amount. Using familiar Excel formulas alongside Spreadsheet Server formulas assures accurate calculations, recording, and periodic review of depreciation schedules and rates. This promotes confidence and ensures compliance with tax regulations (e.g., IRS Form 4562 and Schedule E).

3. Finance charges and interest expenses on loans and mortgages:

Challenge: Accurately accounting for finance charges and interest expenses on loans and mortgages, critical for cash flow and profitability.

Solution: Employ Spreadsheet Server formulas to create customized Excel reports detailing loans, mortgages, and associated charges from MRI and Yardi. Use the formulas for accurate calculations and recording of finance charges and interest expenses. Automate monitoring and management of loan-related impacts on cash flow and debt ratios.

4. Reporting and compliance requirements from lenders and investors:

Challenge: Meeting reporting and compliance requirements from lenders and investors, delivering timely and accurate financial information.

Solution: Utilize Spreadsheet Server to connect with MRI data, creating tailored Excel reports meeting GAAP, IFRS or NCREIF standards or the specific requirements of your lenders and investors. Leverage formulas for preparation and submission of required financial statements and reports. Customize and consolidate financial reports across properties, entities, and currencies, ensuring compliance and providing comprehensive financial analysis and visualization tools.

This is all achievable through Spreadsheet Server, a solution purpose-built for finance and accounting teams that helps real estate and property management companies to save time, create mission-critical reports, and provide stakeholders with better visibility into critical financial information.

Now Is the Time to Use Spreadsheet Server for Year-End Closing

Spreadsheet Server from insightsoftware is an intuitive Microsoft Excel add-in that integrates with 140+ on-premises and cloud-based data sources, including MRI–without requiring any IT expertise. insightsoftware partners with MRI Software, a leading provider of software solutions for the real estate industry, to help their customers have real-time access to data in MRI for financial reporting and to enable MRI customers to create custom reports that match how their business works and that meet the needs of their stakeholders and investors. Spreadsheet Server provides your teams with:

• Insights across the business: Create ad hoc reports and drill down into the information that you need to make good business decisions.
• Faster reporting than BI tools: BI tools were not designed to understand the unique structure of financial data, so they can be challenging for finance teams to use leaving you reliant on IT to build and modify your reports. Spreadsheet Server delivers fast, flexible reporting that typically saves finance teams 50-100 hours per year on reporting tasks.
• Shorter reporting cycles with less effort: Create charts, graphs, maps, and other visuals that combine data from multiple applications in just a few clicks. Refresh reports with the latest MRI data at any time
• Access to real-time data: Find and fix reconciliation and data integrity problems and see your changes immediately reflected in your reports. Support all closing needs to be confident that decisions are based on consistent, reliable, and accurate information.
• Ability to simplify complex reporting tasks: Create comparative reports with accurate, up-to-date data from previous periods without relying on data dumps of older data.
• Easy, lightweight installation: Get up and running fast and enjoy a short time to value with a solution that installs in hours.
• Secure data: Spreadsheet Server leverages the same security built into MRI. The same credentials remain in place to ensure that users only see data that is relevant to their role and which they are authorized to access.

Request a demo to find out if Spreadsheet Server is right for your team.