Real estate firms incur expenses just like any other business. According to the National Association of Realtors, real estate agencies have a median business expense of $6,290.
As a result, it makes sense to manage your expenses to derive more value. It will help you gain control over your business spending and improve your bottom line.
Let’s explore why expense management is so essential for the real estate industry.
A look at real estate business expenses
The top expense for realtors in running their business is vehicle costs. They have to travel through town and beyond to evaluate properties and spaces. As a result, an average real estate firm spends $1,400 on travel, as per the National Association of Realtors.
Additionally, realtors spend on accommodation if they have to stay out of town. Large firms with several employees can run up thousands of dollars covering their travel and lodging expenses.
Moreover, real estate businesses may spend on various software services. They may also pay for marketing, advertising, and promotions. A part of the expense also goes for printing cards, flyers, and brochures.
In addition, you also have petty expenses like utility bills, postage, office supplies, and more. Therefore, an average real estate firm has to handle a range of expenses every day.
Why expense management is crucial for real estate
Expense management refers to the processing and paying your business expenses. Additionally, businesses also conduct audits to ensure every transaction is valid.
The process may seem easy on paper but can get challenging, especially if you depend on manual management. As a result, it is really necessary to manage your expenses to derive the following benefits:
Building resiliency
COVID-19 has affected every industry adversely, including real estate. The demand for rental or leased spaces has gone down as more people avoid gatherings.
As a result, real estate firms are looking to reduce costs by 20% for 2021 and beyond, says Deloitte.
Expense management is not cost-cutting but can help businesses generate more returns. It can help entrepreneurs improve operational efficiency and tackle the lack of market demand.
Realtors can also assess every expense and find out if it’s absolutely necessary.
For example, many businesses pay software subscriptions on auto-mode. However, your employees may not be using the tools to the fullest. Or, there may be better technology in the market that costs less and provides more value.
Expense management can make real estate firms more resilient for the future.
Removing data blind spots
Businesses need updated data to make effective financial decisions. However, that is not possible for most realtors as they don’t track expenses in real-time. Instead, they use spreadsheets or paper processes to record payments at the end of the month or week.
As a result, entrepreneurs are more likely to make inaccurate predictions based on inadequate or old data. In fact, 81% of financial decision-makers experience blind spots related to business expenses.
Real estate firms can use expense management software to track expenses in real-time. Every expense will then show up on your dashboard instantly for verification.
In addition, realtors will be able to eliminate data silos and facilitate the seamless flow of information.
Conserving resources
Real estate firms run up huge costs processing business expenses. Additionally, they take countless hours to validate expenses, approve claims, and record data.
As a result, businesses waste many precious hours that can be spent on growing the business. Additionally, accountants or finance teams undergo terrible frustration and stress process all expenses manually.
Expense management based on a structured approach can help realtors save time, effort, and money. They can take advantage of automation and use an expense management platform to process spending.
Fortunately, entrepreneurs realize the need for automation, including realtors. As a result, 70% of businesses are looking to invest in automating accounts payable and business expense processes.
Along with that, the cost of processing expenses is also coming down. Accounts teams also have more free hours to guide the company in making strategic financial decisions.
Making better forecasts
Efficient expense management provides you with real-time actionable data. You gain complete visibility into your business spending and track every expense. So, you clearly know how every dollar of your budget is being used.
Additionally, entrepreneurs can track the spending behaviors of employees. It also becomes easier to detect frauds and validate every expense with proof. With our intelligent automation solutions, your business can automate all those important tasks - and save time and money.
Real estate agencies that manage expenses digitally with MiCasa can also get advanced analytics. They can generate vital insights and even predict disruptions in the future.
Best of all, you will be able to make sound forecasts and respond to market changes quickly. The whole process will provide your business a competitive advantage over your rivals.
Managing expenses like a pro with KriyaGo
Efficient expense management provides you with real-time actionable data. You gain complete visibility into your business spending and track every expense. So, you clearly know how every dollar of your budget is being used.
Additionally, entrepreneurs can track the spending behaviors of employees. It also becomes easier to detect frauds and validate every expense with proof. With our intelligent automation solutions, your business can automate all those important tasks - and save time and money.
Real estate agencies that manage expenses digitally with MiCasa can also get advanced analytics. They can generate vital insights and even predict disruptions in the future.
Best of all, you will be able to make sound forecasts and respond to market changes quickly. The whole process will provide your business a competitive advantage over your rivals.
Final thoughts
Every real estate firm needs to manage expenses. They need a structured approach and a precise workflow to process and audit spending. Additionally, realtors should develop a clear expense policy and communicate it to each employee of the firm.
With products like MiCasa, KriyaGo makes it possible for entrepreneurs to easily consider automating expense management. Our digital solution can eliminate manual processes and help you streamline workflow.
Additionally, you can save hours and conserve your resources and labor hours. You will also gain real-time visibility into your expenses for absolute clarity.
In the end, real estate firms will be able to make better predictions and sound financial decisions. They can also gain full control over their spending and company budget.
