With all of the unknowns during COVID-19, automation is a place where real estate investors can seek some knowledge, solace, and consistency. In the spirit of automation, we are highlighting eight reports that play a role regarding the COVID-19 situation, from strategy to forecasting to planning. Before we get into how each report can be beneficial during this unprecedented time, here is the master list of the reports we’ll be covering:
- Receivables, summarized by lease and/or rental type
- Current open charges
- All outstanding charges in a prior accounting period
- Receivables collected by receipt date, excluding prepaids
- Receivables, including applied prepays
- Receivables, including those resulting in new prepays
- Receivables collected day by day
- Percentage of rents collected
Three Ways Custom Reports Play a Role in the COVID-19 Situation
Visibility for Strategic Decision-Making
COVID-19 has presented the real estate industry with extensive challenges and uncertainties because we are interconnected with many different industries, from residential to hospitality and everything in between. For investors with a diverse portfolio, understanding which industry is paying rent more consistently allows them visibility for strategic decision-making.
Receivables, summarized by lease and/or rental type:
Some clients and industries might be paying on time, while some may not be paying at all, and others might be making only partial payments.
Understanding exactly where the receivables flow is coming from, or not coming from, allows investors to better manage where their cash flow should be placed, whether that’s for investing to take advantage of the current economic downturn, deciding whether or not to delay unnecessary expenditures, or knowing how best to shore up their bottom line for a continuing pandemic environment.
Current open charges:
It’s important to know what is owed to others so you can make prudent decisions about what monies are available for both necessary and unnecessary expenditures now and in the near future. This is especially true during a time when receivables may be down. Likewise, if a business doesn’t understand what monies are being spent currently, it’s difficult to formulate budgets during a pandemic and into the post-pandemic future.
All outstanding charges in a prior accounting period:
Just as with current open charges, it is crucial to take into account any amounts that are still on the books for past periods, so that you can make calculated decisions to protect that all-important bottom line as this pandemic continues to cause economic difficulties. Past charges can also be used to help adjust budgets and forecasts as needed.
Save Time + Reduce Human Error
While you might be able to pull the information you need by doing raw data manipulation and trying to merge in Excel, using custom reports will allow you to easily and efficiently manipulate your data. In uncertain times like these, the ability to eliminate error and allow yourself more time to focus on unexpected events as they impact your business in specific ways will give you a leg up.
Receivables collected by receipt date, excluding prepaids:
Time is of the essence, especially when businesses are trying to understand where (and when) their revenue is coming from right now. Custom reports can quickly pinpoint currently available revenue data so that sound decisions can be made based on actual receivables for that month’s rent, and not include tenants who prepaid six months ago in a different economic landscape.
Receivables, including applied prepays:
As with the above, it’s valuable to be able to quickly discern not only where current revenue is coming from, but also what future revenues are already expected in the system, especially as many clients/companies may start falling behind on their payments. Those prepays can potentially help businesses stay afloat while they’re waiting for any delinquent revenues to come in, and the faster this information is available, the more beneficial it can be.
Receivables, including those resulting in new prepays:
When considering any receivables, it’s important to know what new prepays are included in those numbers since they can add fresh revenue sources to your bottom line. Custom reports can quickly and efficiently disclose these sources of revenue, allowing businesses to maneuver budgets as needed for the time being.
Specific Budgeting + Forecasting Knowledge
Due to the uncertainty associated with this pandemic, near-term forecasting is not as reliable, which is why reviewing your own data will give you a clearer trajectory.
Receivables collected day by day:
Since the current COVID-19 environment can change day by day, it’s important that businesses remain aware of what revenues are being collected day by day. This way, budgets can be adjusted as needed to hopefully help decrease any potential difficulties in the bottom line.
Percentage of rents collected:
As we mentioned previously, every business has to know concrete numbers for which rents are being collected, which are not, and where those rents are coming from or not coming from (clients and/or industries). A report that shows the percentage of rents collected is another way to understand and look at that information for future budgets and adjustments.
During a pandemic is definitely not the time to view business as usual—in fact, business during COVID-19 has been anything but usual. The future is unknown, and there is a real possibility that in some ways business processes and transactions will change permanently. It’s important to proceed with a great deal of caution, know all the numbers—past, current, and future as much as possible—and use sound financial judgment to help keep business operations as solid as possible.
While many clients can find the bits and pieces of the data above, the greatest value comes from the combination of all this information in one report. It can be time intensive to put it all together to get a cohesive understanding of what’s happening by tenant, building, and portfolio. If you want help creating any of the above custom reports, or others not listed, contact us. We’re here to help.