Streamlining Property Management Financials: Benefits of CLA’s CAAS Team

Effective property management is crucial to the successful outcome of a real estate investment. Often, property owners opt to outsource this function to a third-party management company instead of building a team in-house to manage properties across the multiple geographies in which they operate.

While these companies provide on-site management, tenant communication, and financial statements — the quality, formatting, and applied accounting treatment of these financial statements can vary greatly.

Transforming your accounting and finance function

At CLA, our Client Accounting and Advisory Services (CAAS) team helps real estate clients set reporting expectations and verify that financials are suitable and complete for submission for tax preparation, or to be rolled up into a larger fund or REIT reporting.

Consider some of the many ways CLA helps oversee and supplement property management teams.

1. Financial statement review

Our CAAS team reviews monthly financials to promote accuracy and completeness throughout the year. Doing so provides ownership with confidence in the numbers while speeding up delivery of financials to the tax preparers.

We start by tying out prior year ending balances to the tax return and move down the current year balance sheet to be certain the numbers are supported and understood. We take our review a step further by analyzing the income statement for revenue and expense fluctuations that might be due to errors or irregular property management.

Then, we confirm there is an actionable plan to address delinquencies, and that cash is sufficient for key payments such as property tax, insurance, and debt. Our experience and processes make this practice fast and efficient for our clients on a deal-by-deal basis.

2. Cash flow modeling

Our team helps update existing internal cash flow models and provides ad hoc requests from the client team to make year-end reporting available quickly after year-end.

We attend asset manager review meetings to provide insights and recommendations for improving financial performance. We help plan for capital expenditures, distributions, and other larger cash obligations by connecting asset management and the investment strategy with accounting. There should be no surprises when the financial statements are examined.

3. Reconciliation schedules

Our team helps property managers with reconciliation schedules to confirm financials are accurate and complete. Property management companies don’t often have the visibility or aptitude to make sure asset level equity ties to the greater investment vehicle its equity comes from.

We work closely with property managers to identify areas for improvement and provide recommendations for streamlining processes and improving financial performance.

How we can help

At CLA, our CAAS team is committed to helping real estate clients with their property management financials. Our professionals rely on deep industry technical knowledge to identify financial, tax, operational, and strategic opportunities that can increase property and portfolio value so you can grow with confidence during each phase of the real estate investment life cycle.