Digitally Managing Your CRE Brokerage – From Pipeline to Payments (Part 1 of 2)

Digitally Managing Your CRE Brokerage

Daniel Levison | April 26, 2020

In this crazy pandemic world, do you feel comfortable that your brokerage business is operating efficiently? If not, and most of us don’t, the question we should ask ourselves is – how do we prepare our brokerage businesses to operate at maximum efficiency when another catastrophic event occurs or our economy is shut down again due to a shelter in place order?

If the medical experts are accurate, we could have a second wave and possibly another shelter in place ordered next winter unless a vaccine is developed. Whether it’s next winter or next decade the question really isn’t if something like this will happen again, but when it will happen? 

Our research indicates that most real estate brokerage organizations have not yet invested significant time and resources to streamline their back-office operations. A study by Wells Fargo states moving away from desktop, paper-based processes and outdated systems improves productivity and increases accuracy. Automation initiatives can also make a positive impact on cash flow forecasting and budgeting which is especially important in today’s environment. 

Moving forward, companies should create technology roadmaps to guide them through the process into an automated and digital world. All the multifaceted aspects of your brokerage operation that are interrelated, including cloud-based applications, adopting ACH or electronic payment options for vendors and commissioned agents, accessing a virtual notary and even potentially providing key personnel with high speed internet at home should be incorporated into the plan. Skipping this step can result in unnecessary tension and risk for the organization, as back-office staff struggle to implement a successful strategy. 

Backoffice brokerage operations of today’s world will require a different mix of skills than the historically traditional role of the past two decades. A recent study by Inc Magazine stated the most desired skills for future back-office professionals will include: strategic thinkers, adaptable to new and evolving technological advancements and an individual with good collaboration skills. Financial knowledge is still essential—but it’s no longer the only strength that will be required by professionals handling back-office operations. 

Automation helps address many of these stubborn issues. With better technology, back-office staff can become more productive, and concentrate their valuable time on assisting ownership with cash flow management and forecasting. 

So, what are best practices we should all implement to effectively run our brokerage companies digitally during the next catastrophic global event? The most mission critical functions of your business should be focused on first and that is:   

Making Vendor & Agents Payments

For those of us that worked through the downturns of commercial real estate in 1989, 2001, and 2009, we learned firsthand that those who pay their bills in a timely fashion during difficult times will be viewed favorably by both vendors and lenders when the market rebounds. Moving to an automated cloudbased application can effectively manage these functions allowing your brokerage business to run more profitably and productively while also sending a message to your backoffice support team that their needs and happiness are critical to running your business successfully. 

In the study by Wells Fargo, organizations identified manual processes as the number one operational challenge for their back-office staff. The three most time-consuming and frustrating activities reported by back-office personnel were: managing payments to vendors and employees, forecasting cash flow, and accurate budgeting. Today’s cloud-based systems not only automate back office processes, but they also provide a central, easily accessible hub for all your company’s payments and related files. 

As previously stated, today most real estate brokerage firms are still relying on desktop-based accounts payable and receivable processes created on office computers which requires administrative personnel to physically come into the office to perform these functions.

Shelly Protus, Office Manager/CBRE Albany – “I love pressing a button and having an invoice generated for me. Instead of spending 10 minutes sitting there typing a document, I now have it in 30 seconds. It’s something small that’s so big for me. And, the same with generating broker payments. I push a button and it automatically calculates according to whatever split plan level they’re at currently. Just between the invoices and generating the broker payments, those two things have been time savers for me for sure.”

Having a system that doesn’t require personnel to physically go into the office would also relieve ownership of any potential liability that might come from requiring certain employers to go into the office during a governmental shelter in place order.

Susan Olinsky, from CBRE affiliate in Albany, NY reached out to our customer success team about three weeks into this pandemic with encouraging news, “Hi CT team! Just wanted to check in on how you all are doing and say how grateful I am that we made the transition over to CT. Working remotely is a breeze.” 

CRE cloud-based systems also provide managing principals real time access to view and approve vendor and agent payments while allowing principals to also keep their finger on the pulse of the organization by providing instant access to business-critical reports. 

Most banks and accounting systems provide multiple electronic options for customers to make payments to vendors, employees and commission-based agents. Taking the time to properly evaluate the various options will be timeconsuming but worth the effort. For example, while bill pay features through your bank are free, oftentimes payments go through a clearing house that issues a paper check which is ultimately mailed to the recipient. This option can take up to ten business days to reach its destination and then still must be deposited.

Another option banks can provide customers with is the ability to internally create ACH and wire transfers, allowing direct deposit into the recipient’s bank account within one to three days. Typically, there are fees associated with this service but these upgraded options can have built-in approval processes to protect customers from internal deceptive practices. 

Accounting software packages, such as Quickbooks, Avidxchange, Yardi and MRI also have features within their platforms that allow direct deposit transfers for payments. Quickbooks Online recently added a new integration with Melio which offers a free ACH feature allowing direct deposits to vendors and commissioned agents. Quickbooks also provides customers with a multitude of other third party applications, such as and Dwolla to make electronic payments.

The Quickbooks Online payroll module also has a direct deposit feature which allows contractors and vendors to be paid by direct deposit for a small monthly fee. Venmo also has a business platform which can accept and make payments to vendors, but doesn’t currently integrate with Quickbooks. 

Often overlooked but critical as your company transitions to a digital back-office is to make sure your software vendor has an engaging and responsive customer success team. Within the SaaS industry there is a standard metric used to measure custom success departments of organizations. The metric is known as the net promoter score (NPS) score, and requesting the metric from your potential provider will give you an idea of the quality of the company’s customer support. 

Keeping your entire team in the loop and making everyone aware of the benefits, both directly to them and the company, of transitioning to a digital approach will reduce frustration during the process. Buy-in from the entire organization will be critical to the success, and that confidence must start with ownership. 

Increased caution with email communication is advisable as you move to a digital cloud-based system. The risk of fraud can potentially increase with the use of cloud -ased platforms. However, utilizing an internal messaging application, such as, Slack or Trello, will significantly reduce the opportunity for scammers to capture a company’s sensitive information. Modern applications, such as Slack and Trello, have sufficient security protocols in place to thwart hackers efforts.

Other aspects of a digital automated back office are: 

Receivables & Invoicing

How are the current workflows and processes for this critical function of your business currently handled? Is your company’s only method of processing invoices for earned commissions, vendors, and employees and agent payments through a desktop at the office which requires someone to physically be there, potentially putting them at risk? 

If the answer to this question is yes – you could be putting the survival of your business at risk because you are unwilling to pivot and accept technology advancements in your back-office operations. 

Several CRE-centric back office solutions have entered the marketplace in recent years. Based on your brokerage’s desired level of accounting detail and desired reporting capabilities, managing principals, CFO’s and controllers have several options to consider. 

To fully move into a digital back office process companies need to also utilize an option to electronically accept vendor payments for commissions and related fees. A few of the more popular are Paypal, Stripe and Chargee and for national and global brokerage operations Braintree owned by paypal offers more robust options. 

Where To Look To Stay on Top of Technology Advancements

To stay abreast of the technological innovations in the world of commercial real estate trade associations like,CCIM, SIOR, NAIOP are great resources. Additionally CRETech and Duke Long blogs offer intelligent and comprehensive  access to all things technology happening in our industry. 

To find out how you can use CommissionTrac can assist your transition to a digital and automated back office and why Techstars Atlanta and Cox Enterprises are lead investors in CommissionTrac, request a demo today by visiting our website at 

For Part 2 of 2 in this series: Click here

Any brokerage business that signs a (12) month contract with CommissionTrac between now and the end of June 2020 will have the first three months deferred and rolled into the remaining nine months of their initial contract. 

Author: Daniel Levison – Chairman CRE Holdings (Atlanta Investment Properties, CommissionTrac, Sharedspace) and Turner Levison, CEO, CommissionTrac

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