Five Ways to Streamline Your Budgeting Process
A recent webcast on multifamily budgeting shed a spotlight on some great opportunities to fine-tune the process in order to save time, improve accuracy and keep budgets on track.
Participants emphasized that the time to look at your budget creation and approval processes is not when budgeting season is already upon you. Read over the suggestions below, then schedule a time when you can pull all stakeholders together to brainstorm about how to make your budgeting process run more smoothly.
- Include the property manager. Many PMCs do budgeting at the regional level, then push the budgets out to the property managers. But including your property managers can deliver some big benefits.
When property managers are included in the planning, they feel more invested. A budget that’s dropped upon them simply doesn’t feel the same as one they’ve participated in creating. Property managers have a heightened sense of responsibility about keeping to a budget they’ve had a hand in. And when the budget is tight, they’re less likely to feel frustrated or resentful because unreasonable numbers have been foisted upon them.
- Make sure employees who are supplying the budget data are the ones actually entering the data into the system. Don’t use the common approach of having employees supply spreadsheets that then require another person to enter the numbers. Instead, supply them with an import template that enables them to enter the data directly. This will increase both the speed and accuracy of your process. RealPage Budgeting, for example, features such a template.
- Audit your budget creation process. Rather than simply live with the way it currently is, gather feedback on the process from those involved with creating the budgets. This makes them feel included while providing an opportunity for people to point out areas where fine-tuning may be appropriate.
Here are some questions to ask as part of this audit: How long did income take to complete? How about expenses? What parts of each of these were slow or cumbersome, and how might you address them to speed things up?
As part of this audit, you can also look at how you performed to budget. RealPage offers a budget variance tool that’s great for identifying weak spots you might have over or under-budgeted for in the past.
And finally, you will want to review your reports and worksheets and improve them where you can, adding automation where possible. Keep in mind what worked and didn’t work last year.
- Examine your budget approval process. It’s the approval process that typically slows things down even more then creation of the budget itself, but fortunately a good look at how you’re handling approvals is likely to illuminate opportunities for speeding it up without compromising oversight – even though it often isn’t easy to ask an executive or owner to do things more quickly!
Ask if there’s a report you can build or communication streamlined to ensure that everything possible is being done to get the budget across the finish line as efficiently as possible. Sometimes just opening up this dialogue works wonders.
- Use your budget variance tool to examine your biggest variances, then check how the data was entered into the budget for these particular items. This will allow you to list talking points for future budget training sessions. You can also consider lessons learned from prior years.
Share the education. Provide everyone involved in budgeting with the reports and appraisals around weaknesses and improvements, so there’s ongoing learning that will mitigate problems and improve the budgeting process in an ongoing way.
Set dates well in advance for training, budget completion and budget review. Even if you don’t hit these targets, you’re creating a standard that will help you compare and contrast with past and future budgeting performance.
Formalize your training. A haphazard approach to training based on random email, documents and meetings is detrimental to effective budgeting. Learning platforms such as RealPage’s EasyLMS make learning systematic, simple and even enjoyable, breaking down lessons into bite-sized pieces and clearly acknowledging what’s been learned.
RealPage also offers all-day live training and best practices options through its “budgeting bootcamp.” This often involves gathering everyone involved in budgeting in one place, with the trainer walking through each step of the budgeting process for multifamily; most clients who choose this option leave at the end of the day with their budgets more than half complete.
Budgets can be a painful part of managing multifamily properties, or a smooth, streamlined process that’s neat, orderly and fast. It really depends on the care you take to examine, then improve how you’re going about it.
Learn more about RealPage’s solution to fast, easy budgeting.