Most block management companies have a plethora of complex and demanding administrative challenges to tackle every day in terms of both property management and accounting. They’ll need to record the progress of maintenance work and repeatedly send out service charge demands, for example, while all the time keeping budgets under tight control.
At the same time they’ll have to cope with complex differences between schedules; payment plans and individual leases, all the while making sure that the information they need is at their fingertips in one easily-accessible place, ready to draw upon as and when it’s required.
For ambitious businesses, it’s a situation made even more difficult by the need to manage growth as they push forward with development plans. Unfortunately, successful expansion brings its own challenges in the shape of escalating costs, more maintenance burden; a greater number of service charges to collect and more suppliers to pay.
It is also likely to significantly increase one of the biggest sources of expenditure for block managers today – postage. Throughout the year, they will have to send multiple documents to each flat owner. Indeed, estimates suggest block managers may need to send as many as ten as standard each year, including end-of-year statements and details of planned maintenance work. Most will also issue several ad hoc communications – from general correspondence, to arrears letters, to information about necessary repairs.
Block managers may end up paying on average as much as £6 per flat on postage fees every year, a figure that is certain to grow as they take on more blocks – and that’s without factoring in the time and money spent in administering the whole process. At the same time, it’s worth bearing in mind that generally agents don’t charge separately for this postage. Instead it typically comes straight out of their management fee.
In managing the impact of all these changes, block managers are often hampered rather than helped by their existing systems and solutions – typically a mix of legacy spreadsheets for property management and entry level accounting packages for financial administration.
Unfortunately, these solutions are not specifically designed to address the job in hand. Accounting software, for example often has no concept of service charge schedules or of lease service charge agreements. As a result, block managers often have to do all the work themselves manually in spreadsheets – a time-consuming and error-prone process. So what’s the solution?
Scoping out a Way Forward
To cope with the rapidly expanding workload, firms will typically look to bring on more staff, pushing running costs up further. It seems an intractable problem. Fortunately, block managers can now achieve sustained growth and keep costs under control by basing their approach on automated technology that integrates financial and property management and that conserves resources and drives enhanced profitability.
The best of these systems are intuitive and easy-to-use. They can handle the day-to-day management of properties and deal with the accounts all-in-one. This means not only sending out demands to lessees but also managing service charge accounting, including budgeting, reporting and reconciliation pre-payments and accruals.
Critically also, where blocks have complex schedules in place, the latest solutions can automatically work out the exact share of the overall block expenditure each individual lessee is liable for in addition to quickly calculating any over or underspend compared to budget at the end of each year. All in all, it’s much quicker and more efficient than attempting to manage the whole process with spreadsheets.
This kind of integrated property management and financial accounting software also brings benefits when it comes to keeping postal costs under control. By automatically emailing reminders, demands, arrears letters and statements rather than sending out physical documentation, property managers can save time and money, as postage and stationery costs, the cost of paper, envelopes and stamps, are reduced.
Gauging the Benefits
Ultimately, the key benefit these systems bring to property managers is that by cutting the time it takes them to carry out their regular duties as well as the costs incurred, they also allow them to manage more blocks and bring in greater revenues with the same staffing levels as before.
Demand for these solutions is also set to grow rapidly over time. The block management market is set for dynamic growth as there is growing pressure to build more flats, so the number of management opportunities is increasing exponentially.
And the benefits of the latest integrated property and financial management software solutions are such that we expect businesses that adopt such software solutions to show dynamic growth both today and also long into the future.
Article Courtesy of: Matthew Smith, Sales Manager Grosvenor Systems