Push to lift lagging industry
INVESTORS may soon see better trend forecasting and greater efficiencies coming from the property industry.
INVESTORS may soon see better trend forecasting and greater efficiencies coming from the property industry.
Australia's property industry is lagging in terms of its financial functions, according to professional services firm Deloitte.
And it wants to help.
Deloitte believes that, generally, the property industry came up short during the global financial crisis and has struggled to meet the demands in financial forecasting, meaningful performance insights and better capital management.
To assist companies in getting up with the times, it has released its "Top 10 tips for transforming your property finance functions'' document.
Donal Graham, from Deloitte, said that every second property, engineering and construction company seemed to be overhauling its core finance reporting systems and processes with the goal of improving performance and reducing costs.
"One implication from the GFC was that a number of property companies were found wanting when it came to having to quickly produce financial information to better inform management, and third parties such as banks,'' he said.
"Property companies are often complex, operating across a range of areas including construction, development, seniors living and funds management, and having a contemporary and flexible finance function in place is absolutely critical.
"Flexibility and speed when it comes to planning, budgeting, forecasting, reporting and strategy development are more important than ever, but the property industry has historically underinvested in financial management systems and capabilities.
"Businesses that haven't gone through finance function transformation are really missing out on what can be very significant efficiency improvements in the order of 20-30 per cent as well as access to vastly superior information and insights that can deliver real competitive advantage.''
Deloitte said that the benefits to a company of investing in its financial functions included improved growth through faster leasing and increased occupancy rates; reduced operating costs; improved product innovation; better risk management and improved management information efficiency.
National leader of Deloitte's real estate industry practice, Ian Breedon, said the guide drew from the hard-learnt experience and hard-earned success of Deloitte and its clients.
"Finance is a service delivery business across every sector and transforming this vital function to better support business needs will deliver lasting benefits,'' he said.
"Challenges might vary, but, major companies should take a fresh look at their finance operations and assess how systems change and business model and market changes are driving new demands on the finance function.''