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Optimizing Real Estate Operations: A Guide to Conducting System Controls, System Reviews and Process Mapping

Feb 16, 2023

This is part two of a two-part series focused on intelligent automation in the real estate industry and the critical benefits it provides: streamlining month-end closing processes, optimizing operations and more. Read part one.

Effective system controls are crucial for companies in the real estate industry, including those involved in accounting, property management and real estate investing. These controls can help safeguard the accuracy and integrity of financial information, protect assets and prevent fraud. Best practices for implementing system controls in these types of companies include:

  1. Establishing Clear Policies and Procedures: Creating clear policies and procedures is a critical first step in implementing effective system controls. These policies should outline the roles and responsibilities of employees and the processes and procedures that should be followed in various scenarios.
  2. Segregation of Duties: It's important to have a system of checks and balances in place to prevent fraud and errors. One way to do this is by separating duties so that no one person has complete control over a financial transaction from start to finish.
  3. Access Controls: Access controls are an important part of any system control strategy. These controls help to make certain that only authorized personnel have access to sensitive financial information and assets. This can include measures such as user passwords and two-factor authentication
  4. Regular Reviews and Audits: Regular reviews and audits are essential for identifying any weaknesses or areas of risk in a company's system controls. These reviews should be conducted by an independent party to maintain impartiality.
  5. Employee Training: Training employees on proper procedures and controls is crucial for maintaining an effective system. This can include instruction on financial reporting, fraud prevention and cybersecurity.
  6. Use of Technology: Technology can be a powerful tool for improving system controls in the real estate industry. This can include the use of software to automate and track financial transactions, as well as the use of tools such as data analytics to detect patterns or anomalies that may indicate a problem.

Implementing effective system controls is essential for maintaining financial information's accuracy and integrity and protecting real estate assets. By following these best practices, companies can reduce the risk of fraud and errors and improve the efficiency and effectiveness of their operations.

Here are a few potential use cases for implementing best practices for system controls in real estate companies, including those involved in accounting, property management and real estate investing:

  1. Protecting Financial Information: System controls can help safeguard financial information's accuracy and integrity, such as accounting records and reports. This is especially important for companies in the real estate industry, where large sums of money are often involved.
  2. Protecting Assets: System controls can help protect a company's physical assets, such as real estate properties and equipment. This can include measures such as access controls to prevent unauthorized access and regular inspections to identify any issues or damage.
  3. Preventing Fraud: Effective system controls are crucial for preventing fraud, which can be a significant risk in the real estate industry. Measures such as the segregation of duties and regular audits can help to detect and prevent fraudulent activities.
  4. Improving Efficiency: Implementing system controls can help real estate companies streamline their operations and improve efficiency. For example, automated financial tracking systems can reduce the time and effort required to manage finances, and data analytics tools can help identify improvement areas.
  5. Enhancing customer service: Good system controls can help real estate companies to provide better customer service by making sure that financial transactions are processed accurately and efficiently. This can help to build trust and improve the customer experience.

These are some strategies for improving the efficiency and effectiveness of real estate operations. Overall, this guide is a valuable resource for real estate professionals looking to optimize their operations and improve their bottom line.

This series is part of the strategic alliance between EisnerAmper and leading real estate technology consulting firm REdirect Consulting. Learn more here.  

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Michael Shuster

Michael Shuster provides a range of services including public accounting providing audit, tax and consulting services to clients in the real estate industry.

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