If you can remember working without all of today’s technology in place, then you no doubt remember how difficult it was to do everything analog or by hand. Every transaction was recorded on a slow and cumbersome computer or by hand using a calculator and then painstakingly accounted for. And what’s worse, if you were out of the office and not in your home — no one could even reach you.
Responding to Commercial Real Estate Technology Advancements
Obviously, through technology, those days are long gone. The majority of today’s workforce is made up of members of Gen X or Millennial generations, who are known for not only expecting technology 24/7 but also for having a hard time living without it. What’s more, the workplace has adjusted and transformed to meet these needs, and today’s workforce communicates instantaneously from around the world. Further, there are tremendous amounts of data in the cloud and available for on-demand access, allowing everyone to be more productive than ever before in history.
Historically speaking, the commercial real estate industry has been incredibly slow to change, resisting technology and its advances. However, even the most seasoned CRE professionals are beginning to understand and embrace technology and enjoying the benefits that come along with it.
Commercial Real Estate Trends
In their 2018 annually released study, “The DNA of CRE Brokerage Report”, Buildout, one of the true successes in CRE technology stated that 84% of the 400 brokerage companies, representing over 10,000 CRE agents stated, they plan to start embracing new technologies in a significant way in 2018.
It’s widely suggested that CRE executives are starting to understand the downside to the future of their business if they don’t start accepting available new technologies at a faster pace.
Added conveniences are great, but changes in your CRE technology, more importantly, should increase productivity on the administrative, executive and agent level. Several new accounting and commission calculation software allow companies to streamline their back-office accounting and commission management, allowing them to work smarter — not harder. Acceptance of technologies, especially in your back-office, can keep your head counts down in those areas of your business that don’t directly generate revenue.
How to Utilize CRE Technology
These software programs were created to remove the headache from managing brokerage commissions and bookkeeping with notecards, excel spreadsheets or older non-cloud based closed customized systems. These platforms provide simple workflows and accounting journal entry automation for everything that happens after the deal closes. A few have also created integrations with QuickBooks and other general ledger accounting systems, in order to provide a true turn-key experience for our customers.
If You Can’t Measure it, You Can’t Track it.
Peter Drucker, known as the man who invested in modern business management, has been quoted as saying “If you can’t measure it, you can’t improve it.” In other words, if you can’t measure something and know the results, you can’t possibly get any better at it.
For instance, think of the last time you tried to lose weight. If you never stepped on a scale every now and then to measure your results, how would you know if you were successful or not? Simply put, you wouldn’t. It’s important to measure every part of your business, in order to effectively manage or grow it.
Aim to Develop 3-5 (KPI’s) Key Performance Indicators.
While tracking key performance indicators sounds great, in the application, it often means that we could spend more time measuring than managing — and that isn’t good.
This is where KPIs, come into play — measuring just those KEY elements of your business strategy that contribute to the bottom line and your vision of the future roadmap of your business. In the big picture, operational measures are easy to definite, and the number of KPIs your organization should have is directly related to the number of your strategic objectives on your organization’s roadmap. Focus on your top 3-5 KPIs so you don’t develop that all too familiar syndrome of analysis paralysis.
Your Data Needs to Tell a Story — And Be Visual.
It’s great to have data from your KPIs, but your information also needs to be visual and tell a story that’s easy to understand with a quick glance. Accounting and commission automating software should have a portal for executives, administrative managers, as well as agents.
A platform should also allow for optional email notifications for various activities, such as a commission being deposited or an invoice being sent. All portals should also allow the ability to run reports and set customization (with permissions) so that they can quickly see what is most important to them.
A deal approval process built into the system for allowing agents, admins, and executives to review deals before submittal will help reduce future mistakes thereby significantly improving efficiency and productivity throughout the organization.
Reports and Analytics are the Keys to Success.
In addition to a dashboard, platforms should allow for both standardized reports, as well as allowing admins to create custom Excel and PDF downloads of all deal data, vouchers, and payables/receivables ledgers. A well-designed platform will also allow executives, administrative managers, and agents to quickly run and view those key KPI’s, such as receivables on a 30,60,90 basis and revenue pipeline specific to their areas of responsibility.
The reality is, if you are a CRE agent, you are running your own small business within the larger brokerage company and the pulse and heartbeat of “your” business is just as, if not more important, than the overall business.
Commercial Real Estate Tools
To find out how you can use technology to manage your individual receivables, commission plans, invoicing and distributions, please sign up for our blog at www.commissiontrac.com and learn why Techstars Atlanta selected CommissionTrac as their first CRE application for their intense 90-day mentorship program joint-ventured with Cox Communications.