Streamlining Month-End Closing Processes in the Real Estate Industry: A Step-by-Step Guide to Automation and Reengineering
February 15, 2023
By Jason Juliano, Michael Shuster and Jonathan Bias
This is part one 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 two.
The real estate industry can streamline their month-end closing process through automation and reengineering. This article will cover the benefits of automation, including increased efficiency and accuracy, and provide a step-by-step approach for implementing automation and reengineering in the month-end closing process. It also includes examples of best practices and case studies to help real estate professionals understand how automation and reengineering can be applied in their organizations.
The Role of Automation in the Month-End Closing Process
Automation can significantly streamline the month-end closing process within the real estate industry. Using software and technology, tasks such as data entry, document management and financial reporting can be automated, reducing the amount of manual labor required and minimizing the potential for errors. Additionally, automation can improve the speed and efficiency of the month-end closing process, allowing real estate companies to close their books faster and make more informed business decisions. Automation can also help with compliance and audit by providing accurate and consistent data, audit trails and recordkeeping.
How Automation Can Work with the Month-End Closing
Process reengineering and robotic process automation (“RPA”) can work together to improve the efficiency and accuracy of the month-end closing process within the real estate industry. Process reengineering involves analyzing and redesigning existing business processes to make them more efficient and effective. For example, in the month-end closing process, this could include identifying bottlenecks, duplicated efforts and manual tasks that could be automated, and redesigning the process to eliminate those inefficiencies.
Once the process has been reengineered, automation can be implemented to automate specific tasks within the process. RPA software can be programmed to perform repetitive, rule-based tasks such as data entry, document management and financial reporting, reducing the need for manual labor and minimizing the potential for errors. RPA bots can also be programmed to automatically extract data from various sources, such as emails, spreadsheets and databases, and then input that data into the appropriate systems, thus improving speed and accuracy.
Benefits of Automating Month-End Closing Process
There are several benefits to automating month-end closing processes within the real estate industry, including:
- Increased Efficiency: Automation can significantly speed up the month-end closing process by reducing the need for manual labor and minimizing the potential for errors. This can lead to faster closing times and more accurate financial reporting.
- Improved Accuracy: Automation can help confirm that data is entered and processed correctly, reducing the risk of errors and inaccuracies in financial reports.
- Increased Compliance: Automation can help verify that month-end closing processes comply with regulations and standards, such as IFRS and GAAP.
- Better Decision-Making: Automation can provide real-time data and analytics, allowing real estate companies to make more informed business decisions.
- Cost Savings: Automation can reduce the need for manual labor, thus reducing labor costs and increasing efficiency.
- Scalability: Automation can help businesses handle increased workloads and expansion, without adding headcount.
- Auditability: Automation can provide accurate and consistent data, audit trails and recordkeeping, which is essential for compliance and audits.
The Cost Savings of Automating Month-End Closing Processes if Done Right
The cost of automating month-end closing processes can vary widely depending on several factors, such as the complexity of the process, the number of tasks to be automated, the technology used and the vendor you choose.
In general, automation expense can be broken down into several different categories:
- Software and Technology Costs: This includes the cost of purchasing or subscribing to the automation software and any other technology required, such as hardware or cloud-based storage.
- Implementation Costs: This includes the cost of configuring and setting up the automation system, as well as any necessary customization or integration with existing systems.
- Maintenance Costs: This includes the cost of maintaining and updating the automation system and any necessary technical support.
- Training Costs: This includes the cost of training employees on how to use the automation system.
In general, the cost of automating month-end closing processes can range from a few thousand to several hundred thousand dollars or more, depending on the scope and complexity of the project. It's important to note that while the cost of automation may be high in the short term, it can provide significant cost savings in the long term by reducing labor costs, improving efficiency and increasing accuracy.
Getting Started: A Step-By-Step Process for This Digital Automation Transformation Initiative
A real estate company can start with automation and process reengineering projects by first identifying the processes that are candidates for automation or reengineering. These could include property listing, lead generation or contract signing. Once the processes have been identified, the next step is gathering data on them, such as how long they take, how many people are involved and how often errors occur. This data can be used to prioritize which processes to tackle first.
Next, the real estate company should conduct process mapping to understand the current process flow and identify areas that can be improved. This can be done using tools such as flowcharts or process modeling software.
Once the process has been mapped, the real estate company can then begin to design the new, automated or reengineered process. This can involve using technologies such as a CRM, workflow automation or e-signature to automate repetitive tasks or improve decision-making.
The next step is to implement the new process and train employees on how to use it. It's also essential to monitor the process to make sure it's working as expected and make any necessary adjustments.
Finally, it's essential to measure the success of the automation or reengineering project. This can be done by comparing data on the old process with data on the new process, such as time saved, error reduction and cost savings. In summary, the key steps for automation and process reengineering projects in the real estate industry are:
- Identify the processes that are candidates for automation or reengineering (property listing, lead generation, contract signing, etc.);
- Gather data on the processes;
- Conduct process mapping;
- Design the new, automated or reengineered process;
- Implement and train employees on the new process;
- Monitor the process and make adjustments as needed; and
- Measure the success of the project.
In conclusion, streamlining the month-end closing processes in the real estate industry can be achieved through automation and reengineering. A digital transformation advisor can help organizations with this process by implementing software solutions and standardizing procedures, to greatly improve the efficiency and accuracy of their month-end closing process. Additionally, a digital transformation advisor can help rethink and redesign the process by identifying and eliminating unnecessary steps, further streamlining the process. Overall, implementing automation and reengineering can lead to significant cost savings and improved overall performance for real estate organizations.
This series is part of the strategic alliance between EisnerAmper and leading real estate technology consulting firm REdirect Consulting. Learn more here.