Streamlining Fund & Investment Accounting for Low Total Cost of Ownership

Real estate accountants operate in a challenging environment where efficiency, accuracy and timely decision making combine to determine the success of managing the investment accounting requirements across the organization. 

Adopting a streamlined investment and fund accounting approach becomes a critical step on your unique path to mixed portfolio success in a dynamic financial services landscape. into the true power of a professional real estate investment accounting platform requires technology designed to manage all accounting functions related to real estate investing, including:

Investment accounting

Managing all capital transactions — such as capital calls, distributions, management fees and other transaction types —  and handling investor correspondence and reporting while tracking investment returns.

Advanced consolidations

Consolidating accounting records and managing complex ownership structures of multiple subsidiaries, presenting consolidated financial statements for multiple sets of books for the parent company using automated consolidation rules that help reduce closing cycle time.

Corporate accounting

Enabling real estate firms to simplify the process of allocating expenses and overhead from the corporate entity to investments and properties and managing financial reporting for business units not specific to a particular asset or investment vehicle.

Modern investment accounting management solutions now offer specialized, cloud-based technology services that support and empower real estate accountants to optimize operational processes, gain real-time insights and drive superior performance.  

Let’s explore how automation and advanced accounting capabilities across partnership and corporate structures can streamline resources and access to relevant fund information and analysis to simplify capital transactions, distribution management and financial statements while tracking and measuring profit center performance.

​​1. Automated waterfall calculations for accuracy & efficiency

Waterfall calculations that determine the distribution of profits among various stakeholders must be free of manual errors and inaccurate calculations, regardless of the complexity of the investment structure.

With a streamlined approach to accounting for investment management, portfolio accountants can easily set up automated waterfall models considering factors, including preferred returns, hurdle rates and carried interest provisions. These automated systems help portfolio accountants reduce the time and effort required for calculations, minimize the risk from errors and improve stakeholder transparency in profit distribution.

2. Investor distribution management for timely payments & reporting​

Efficient distribution management means giving portfolio accountants the means to consistently manage cash flows and meet investor expectations effectively in all conditions, regardless of staffing, funding or market fluctuations.

Streamlining the distribution process to automate payment calculations, generate accurate distribution statements and facilitate prompt payments to investors results in higher investor satisfaction, fosters trust and attracts new capital to the real estate investment fund. Moreover, streamlined distribution management helps align distributions with the fund's investment strategy, ensuring optimal utilization of available capital.

3. Advanced consolidations for real-time real estate portfolio insights

Investment portfolio accountants often oversee a diverse portfolio of assets, including properties, joint ventures and partnerships. Consolidating and monitoring financial data from these varied sources can be challenging and time-consuming. Advanced consolidation tools and software can streamline the process and deliver real-time insights into portfolio performance.

Automated consolidations that provide a comprehensive view of financial data make it easier for portfolio accountants to assess the overall health of their investments, identify underperforming assets and make data-driven decisions to maximize returns.

4. Operational efficiency with optimal investment workflows & lower costs

Automating repetitive tasks and integrating systems for fund and investment accounting has immediate productivity benefits for real estate portfolio accountants in reducing manual effort, eliminating redundancies and optimizing workflows. However, a streamlined approach for fund and investment accounting also substantially impacts operational efficiency as portfolio accountants shift their focus to strategic initiatives that drive growth and performance.

Improving accuracy and transparency translates to cost savings as portfolio accountants allocate attention and resources to more value-added activities like investment analysis, portfolio optimization and investor relations.

5. Regulatory compliance to mitigate risk & ensure transparency in investing

Because real estate investment management is subject to strict regulatory requirements, compliance is a paramount concern for portfolio managers and investors alike. Streamlining fund and investment accounting helps ensure each portfolio’s financial integrity and compliance with accounting standards, tax regulations and investor reporting obligations.

Automated systems and monitoring software that generate accurate, consistent and timely financial statements, investor reports and tax filings help reduce the risk of costly errors and ensure reporting transparency. Portfolio accountants gain peace of mind by relying on a modern, integrated platform to help maintain robust compliance practices to mitigate regulatory risk, build trust with investors and enhance the reputation of their real estate investment management firm.

Convert complexity to confidence that counts

When facing the dual challenge of optimizing investment performance while managing complex accounting processes, real estate accounting managers can use a single platform to manage automated waterfall calculations, distribution management and advanced consolidations — giving all stakeholders one consistent and reliable source of truth for financial portfolio management.  

Using this streamlined approach can improve resource utilization, outcomes and impact by embracing advanced technology and automation that ensures accuracy, efficiency and transparency across assets. With increased simplicity and reliability of profit distribution, timely investor payments and real-time financial insights into portfolio performance, investment management professionals gain the productivity and flexibility to focus on strategic activity for improving operational efficiency — driving superior investment outcomes, maintaining regulatory compliance and, ultimately,  delivering optimal value to stakeholders in a competitive real estate investing marketplace.

Learn more about the RealPage^® Investment Accounting platform and how it can help you drive financial accuracy and efficiency that streamline your portfolio’s path to value.