Time to Ace Budget Season
Budget season has begun! As we enter the second half of the year it’s time to start preparing the budgets for 2019. Depending on the complexity of the properties you manage, budgets may be a simple task, or a gruesome never-ending process that is avoided until necessary. Here are some tips to help you win during budget season.
Review Previous Budgets
When creating a budget, it’s important to review both the current and prior years’ budgets verses actual expenses. Through the review process you can determine which of your operating contracts and services you will need to bid out, ensuring you get the best price for the service you desire.
Include Capital Improvements
Through the years, I’ve learned the importance of budgets and used them as a tool to plan my action for the following year. This includes planning the expense for large projects such as asphalt, painting, roof replacement, and more. Since these items are not paid from the operating account, many times they are not included in the annual budgeting process. Why not? Often, these expenses are very costly and can affect your funding levels largely at one time.
Use the Experts and the Data
Does your property have a professional reserve study completed? If it has, you are provided with a planning tool for large expenses with anticipated replacement costs included. However, this will only get you close – keep in mind that the replacement costs included in your study are not a guarantee of the actual price you will pay when you complete the project. This can only be determined by creating an RFP and obtaining quotes from professional vendors. If your property doesn’t have a reserve study or long-term replacement plan, it may be up to you as the manager to determine which components need replacement and what the costs will be. As a property manager this is an area where you can add value to the properties you oversee as they need your guidance and advice for short and long-term improvements.
Do you write a scope of work for each service type needed, or send an email to a few vendors you work with and ask them for a proposal? When you get your proposals back, you must take time to create a comparison chart so you can determine if the material and service levels between service providers are equal or have differences. Naturally, it is important to bid out operating expenses and capital replacements during budgeting season for proper future planning. One way you can do it is the old way and put in the time and effort to create and manage requests for proposals with many different providers in different service types. But forward-thinking property managers know to use Synlio to help accomplish their budgeting needs with much less effort than trying to handle it all on their own manually.
So, what are you waiting for? Budget season is here – time to enjoy it!