As a property manager looking after a portfolio of residential properties, you might not think that world recession has much to do with your day-to-day work. But you’d be wrong. The company bosses will watch the Profit & Loss statement – and hopefully keep you and your colleagues in a job – but YOU need to watch cash flow too. Follow these top 10 tips which might just ease your cash flow problems – and help you manage more easily, more happily, more professionally. Crunch review of Crunch Accounting
Watch Cash Flow Daily
Most business owners are used to judging their business performance by looking at Profit and Loss. In property management it’s similar – balance expenditure alongside service charge income and meet your budget targets. But in times of world recession and credit crunch, a cash flow statement is far more important than P&L. Look at cash flow daily – for each of your clients AND for your firm. Put cash flow at the top of your To Do list each day and bear it in mind throughout the day. Ask yourself, “What will this decision do for cash flow?”
Collect Cash – NOW!
It’s stating the obvious but collecting what’s owed to you is often a great first step. Look at those unpaid service charges and rents, find out why they’ve not been paid and assign responsibility appropriately. Get the right person to sort out the problem and don’t just leave it to the credit controller in accounts. It may be something simple like ‘send a copy’, or a quiet reminder on the phone, or it may be something more serious. Find out today and do something positive NOW.
This is the knee jerk answer to lack of cash: cut costs to match the falling income. But as the weeks go by it may become clear that such a move was cutting your own throat. Think very carefully about what you are spending your money on. Does it make sense? Does this expenditure contribute to your effective property management? If you do decide to reduce expenditure, consult with residents, contractors and clients, make a detailed plan – and tell everybody about it, so that they understand and work with you.
Negotiate a Better Deal
Cutting the cost, paying less, does not always work. Cheap is not necessarily good. It’s better to look at ‘value for money’. Can you get more for your money and make your property management more efficient as a result? Remember, the contractors and suppliers you’re dealing with are having the same problems. They don’t want to lose your business and they will talk constructively to maintain your custom. Negotiate on price, specification and delivery – and don’t forget to ask about payment terms. For you, 60 days is better than 30 days, but don’t cut their throat in the process – look after them as well as yourself.