Many people have criticized QuickBooks for its shortcomings as a real estate and property management software that is until now. Many real estate owners begin with QuickBooks.
And it is not surprising considering how much of the accounting market Intuit services. Intuit is the provider of QuickBooks Online and QuickBooks Desktop. As of today, there were over 5.6 million QuickBooks users globally, according to their latest advertisements.
QuickBooks is a great accounting solution for companies. QuickBooks is easy to learn, cost-effective, and accountant support is plentiful. If you use QuickBooks Online and run into an issue, it is as simple as giving your accountant access to your account. Your accountant can troubleshoot your issue in minutes.
However, if you own real estate, you quickly realize that you must start using spreadsheets to help you manage your business because QuickBooks does not address all your needs. This is where STRATAFOLIO comes in.
Tracking Global Cash Flow
Most real estate owners manage multiple companies within their real estate holdings for liability reasons. As a result, they have separate company files that align with those separate companies. However, when you want to see your overall cash flow or other operating performance, this requires a series of steps.
First, you must export your profit and loss reports for each company. Then you manipulate the files for alignment to address any difference in the chart of accounts structures before combining them. You must try to remember how you combined the files in the past, so you are giving a consistent presentation. It is not a hard process, but a time-consuming process every time you want to see your global cash flow.
With STRATAFOLIO, we do this for you! We work with you to do a one-time mapping, and then you can see your global cash flow at any time. At a glance, you can see your individual company cash flow or your global cash flow. And, our cash flow statement pulls out debt service so you can see your true Net Operating Income, just like your lender views your finances.
Tracking Global Debt Service
Now, let’s talk about debt management. Most real estate owners carry debt to grow their business. QuickBooks tracks your current debt balance and interest paid. Many real estate owners carry a large number of loans with different terms and different banks.
To manage this effectively, most owners eventually adopt the use of a spreadsheet to track their debt so they know:
- What lender has what loan
- Loan maturity dates
- Interest rate
- Loan balances
- And so much more…
This is a great first step. However, this process requires continual manual updating of the spreadsheet. We all know what happens next. Things get out of sync, and then someone needs to clean up the file, so it is accurate again.
We get it. With STRATAFOLIO, as you pay down your debt (and correctly split the principal and interest), we track your remaining balances across your entire portfolio. Your balances are available for you at any time. Not only that, we calculate critical metrics like the loan to value, debt coverage ratio, total asset value, total debt, total equity….and more. We put you in the driver’s seat.
Plus, we visually show and alert you through email about your upcoming maturing loans. And the great thing is, there is no manual manipulation every month to have a snapshot. Your data is available anywhere, anytime, and exportable so that you can share this with a lender or investor.
QuickBooks can handle tenants and buildings. QuickBooks falls short for true management of lease renewals, lease escalations, or common area maintenance (CAM) reconciliation. That is where STRATAFOLIO comes in.
We track leases for 12 different asset classes and alert you when the lease via email when the lease is set to expire or is ready for a lease bump or escalation. You no longer have to rely on consulting your spreadsheet for a colored cell or going through a filtering exercise to identify the action you need to take.
And then there is CAM reconciliation. That once a year task is critical to managing your net leases. Work with STRATAFOLIO to set up your CAM, insurance, and tax categories. As the expenses occur throughout the year and you categorize the transactions, we pull in the financials, making it easy to current spend and complete the year-end reconciliation. Not only that, but we put your reconciliation in a format showing the pro-rata share for the tenant. You can easily email a template to your tenant sharing any shortages or overages and how they need to adjust for the following year! It is that easy!
Another area where STRATAFOLIO shines is with the investor or partner tracking. We frequently see owners managing their partner contact information, percentage ownership, initial contributions, and more outside of QuickBooks. QuickBooks tracks the contributions and distributions for each company. But often, you want to see this information globally. And you need to see so much more about that investor – such as their specific portion of the total investment. Investors want to know this information and so do lenders. Lenders need this information because they need to understand which investors are guarantors and how much they have in the company.
Once again, STRATAFOLIO can help. We track each investor’s critical information and share how much an individual investor owns across an entire portfolio. You can leave the spreadsheets behind and rely on STRATAFOLIO to help manage your investors.
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Tracking Work Orders
Finally, how are you tracking your tenant work orders? Is it another spreadsheet? Or memory? STRATAFOLIO tracks when the order was requested, where the work is being done, who is performing the work, and if it is tenant billable. And because we are already tracking asset information in STRATAFOLIO, there is no need to give your contractor the location or contact information for the location. It is all part of the system.
No Need to Leave QuickBooks
Let’s face it, product conversions are rough. Sometimes they take weeks or even years to complete. Plus, the solution selected often misses vital elements of asset management around global cash flow or debt management, which still results in the use of spreadsheets.
Check out our article on Commercial Real Estate and QuickBooks: The Best Ways to Get Started if you are looking for other suggestions on setting up your QuickBooks correctly from the beginning.
Process for Adding Income Items
Want to see how STRATAFOLIO can support your real estate business? Contact us today to set up a demo!
9 out of 10 companies are missing lease escalations.
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