Information is power and Financial Reporting is the delivery mechanism. It starts with Initial Financial Reporting.
You own a commercial or industrial property. Maybe it’s a small office building or even a retail strip mall. You thought you could manage it yourself. But the first time you see the scope of the job you face – the mountain of paperwork, the financial budgeting and reporting – most owners wish they had taken up an alternative career instead.
Don’t worry. These are not insurmountable challenges. They can be cut down to size, but only if you do the prep work properly before you find yourself balancing on the far end of the high-dive board!
Around here, we have a saying: “Manage Your Property; Grow Your Investment.”
That’s why most commercial property owners hire professional commercial property managers. They will look after the details and allow you to experience a growing investment. And in order for you to know whether your property is being managed well and to ensure growth of your asset, you need to have decent reporting that is meaningful and relevant to you.
As a first step, we’ll break down your Reporting requirements into two parts: Initial Reporting and Ongoing Reporting. Part one of this blog series will deal with Initial Reporting.
You must start with an Audit of the Property. It will provide you with incredible insight of the current state of the property and what needs to be done in the future. Begin with a checklist:
Now summarize your findings, and include all the Recommendations you have (include all possible deficiencies) and create a Priorities List, starting with the most important and urgent.
Read The Property Management Audit for more details about this audit process.
Next, a Property Budget must be developed that addresses the financial requirements for the next 12-months.
This process starts with the assembly of Financial Statements. This should include:
Most of the above will become living, breathing documents as actuals are compared to the budget as the year progresses. We’ll explain more of this in the second of our reporting series: Ongoing Reporting.
The next parts of this “financial blueprint” include:
That may seem like a daunting task… and for many Commercial Property owners, it is.
But to Commercial Property Managers, and their team of professional accountants, these reports are second nature. That is not to say they simply grab a “cookie-cutter” report off the shelf and cram your unique numbers into that format. Not at all. However, the experience gained by these teams gives them the ability to adapt existing forms and formats to meet the unique needs of every commercial building owner.
So why is the Initial Reporting so critical? Well, it sets the bar for performance tracking and ensuring that, as a commercial property owner, you have the confidence that the property is being managed properly, and with your interests at heart. At Armadale Property Management, we take your interests to a new level, by making sure that the commercial property is managed like a true asset, something that you would like to see grow in value, year over year. Like we said at the start: “Manage Your Property; Grow Your Investment.”
Look out for our next blog article: the how’s and when’s of Ongoing Reporting.