A majority of commercial real estate project delivery teams rely heavily on their accounting department’s software to manage project finances. While that practice may have seemed fine in the past when there were no alternatives, there are many reasons why this method is inefficient and causes needless headaches for both accounting and project management teams.
Read on to learn how accounting software limits project teams and can end up derailing the successful completion of an owner's or developer's complex real estate project.
- Accounting software wasn’t created for project teams. Accounting software is great for accounting needs like payables, managing your general ledger and P&L, but these accounting-focused platforms weren’t designed with project team decision-makers in mind. It isn’t able to think like an owner or project lead, which means it can’t help you manage the strategic direction of your project, track tasks + milestones, or proactively anticipate cost challenges and opportunities. Instead, you’re force-fitting rigid accounting systems to handle fast-paced projects that require flexibility and quick access to information. This is usually a recipe for delayed, bottle-necked decision-making and a failure to utilize information to make data-empowered decisions in real-time.
- Real estate project teams aren’t in control. If you are using accounting software, chances are your accounting team owns the log-in and is playing a large role in your project’s cost-tracking and reporting processes. Now, instead of the project management team controlling their project + data, it’s sharing ownership with accounting and effectively siloing information between departments. Oftentimes, project teams even keep their own spreadsheets alongside the accounting system, which creates time-consuming work and unnecessary parallel tracking. This greatly reduces productivity, especially when the project team must interrupt the accounting team (which is often busy managing internal finances and keeping accounts reconciled) simply to check key project metrics and access documentation to make quick + critical project decisions.
- There is a heavy reliance on data entry + administrative tasks. Accounting software focuses on managing information within its system, which means someone still needs to spend valuable time inputting that information via data entry and printing, copying, scanning, collating, uploading and filing documents (contracts, invoices, change orders, etc.). Both departments would benefit from having those wasted hours redirected to managing more meaningful work.
- Accounting software doesn’t offer real-time visibility. Knowing the status of your project at every stage is crucial to staying within budget and on schedule. Whether you’re negotiating hundreds of change orders or figuring out where there are opportunities to cut costs on your project, it can be difficult to make informed decisions when all key data + information exists solely in your accounting system. Not to mention, accounting software only provides a retroactive look into project finances, showing what has already occurred in the past 30 to 60 days. Truly effective project teams need real-time, easy access to data 365 days a year - not just 12 times a year at the end of each month - to avoid budget overruns and reduce costly delays.
- Modern project management teams need modern, sophisticated technology. Accounting software is rigid, inflexible and static. It doesn’t meet the needs of modern real estate professionals or their tech-savvy, forward-thinking financial partners and/or clients. There is an industry shift to incorporate data analytics, smart technology and modern interfaces into project management; niche accounting software that only offers traditional financing tracking just doesn’t cut it. Real estate project teams deserve 21st century technology that helps them deliver projects on-time and on-budget.
Does any of this sound familiar? If so, and you're curious if there's a solution for your real estate project team, then you're in luck. See firsthand how a technology built with your specific needs in mind can help you save valuable time, achieve predictable outcomes and deliver projects on-time and on-budget. Upgrade with Northspyre.