Times are tight, but do they need to be that way? If you're having troubles with your monthly cash flow or if you'd like to prevent these troubles from occurring, you need an excellent tracking system that will allow you to add data and generate financial reports and forecasts. Property management software can help you tame your cash flow budget and keep it on track.
Managing Your Cash Flow
Cash flow is a vital sign of the health of your business. In fact, the Wall Street Journal says that "the ability to generate cash may be the most important measure of a business's health. Plenty of companies with paper profits have failed because they lacked the cash to keep operating." If you've been in business for a while, your company is probably a winning proposition. Overall, you make enough profit every year to reassure you that your business is worthwhile. However, profit and cash flow are different. While you can experience success on an annual or seasonal basis, you can also experience months when your funds are tight, and if you're not careful a misstep at these times could lead to financial disaster for your business.
Cash Flow Issues For Property Managers
As a property manager, what are some of the most important issues you need to be aware of as you calculate your monthly cash flow? Your monthly rental income is a staple of your budget. You need to know the seasonal ups and downs of this income as well as the specifics of individuals who are moving in, moving out, or behind on payments. Any changes can impact your cash flow. Other fees are also important to your income, although they're more occasional. This might include damage deposits that come in, go out, or are partially refunded due to damage.
Of course, incoming funds are only one part of your cash flow budget. You also need to be aware of what's going out on a regular basis. This includes costs related to your properties, such as regularly-scheduled maintenance of the homes or cleaning and items such as staffing costs or marketing fees. Remember to account for those expenses that occur once a year, such as fees for your property accounting system or web hosting. You also need a contingency fund so that larger emergencies don't disrupt your monthly cash flow.
Property Management Software Can Help You Manage Your Budget
Using property management software can help you manage your cash flow in several different ways. Property management software helps you understand exactly where the money is going within your business. You might discover that your marketing budget is out of line with the returns you're seeing in a particular area, and this could lead you to make changes.
It can help you pinpoint problem areas, as well. For example, if you divide your properties according to region, you might see that homes in a particular area have turned out to be a poor investment because they are older and require more intensive maintenance. With the data stored in your software, you can analyze trends according to the variables you've added to your system, such as area, demographic, and season.
Property management software can also help you create reports and forecasts that allow you to plan for or avoid tight times before they happen. If you know that specific months tend to be a popular time for tenants to move out of your properties, you can work this into your budget so that you'll have the funds on hand to get you through that difficult season.
Looking for software that will transform the way you do business? When you need property management software, contact Propertyware. Watch a demo and learn more about Propertyware today.