Budgeting & Planning for VRMs with Sage Intacct
Founder & CEO
Don’t let budgeting and planning overwhelm accountants or produce imperfect results. There’s a simpler way to get things right every time.
Budgeting & Planning for VRMs: Getting it Right Every Time
With the vacation rental industry projected to reach a $113 billion valuation by 2027, it looks like a great time to be a vacation rental manager. But any high-growth industry attracts competition and encourages consolidation. That is to say, success isn’t guaranteed even as billions flow into the industry.
The vacation rental management firms that manage to sustain their growth in coming years will be the ones that budget carefully and plan rigorously. Recent events prove why. No one predicted a global pandemic or planned for the impact it would have on the vacation rental market – driving demand in some places, cratering it in others. But some firms have managed the pandemic better than others, and that’s largely because of prudent financial planning.
If there’s one skill VRMs need above all others, it’s the ability to budget and plan their finances. Yet if there’s one skill most VRMs struggle with, it’s financial forecasting. That can’t continue. In the rest of this piece, we’ll show you how to get good at budgeting and planning the easy way.
Imagining the Ideal Budget and Planning Process
For all VRMs, no matter their size, specialty, or location, the ideal budgeting and planning process looks something like this: They identify their top line revenue in terms of the number of properties and the income from each. Then they subtract all expenses like cleaning, management commissions, supplies etc. When done correctly, that results in a precise understanding of how much profit each property brings in.
Once a VRM knows how much money it can expect to generate from each property under management, it can start to plan everything else around projected revenues and profits. Is it prudent to spend more on technology, staff, office space, or some other ambitious undertaking? All these questions have answers once the budgeting and planning process starts to fire on all cylinders.
Unfortunately, as most VRMs already know, managing all the accounting data required for budgeting and planning is no small undertaking. The volume and velocity can be overwhelming, just as gaps and errors can distort the perspective into financial performance. If this sounds familiar, there’s a solution.
Achieving the Ideal Budget and Planning Process
If budgeting and planning suffers from a lack of timely, accurate data, Sage Intacct supplies those insights in the most accessible, action-oriented format possible. It automates more of the work it takes to collect, organize, analyze, and report on accounting data. VRMs have more insights at their disposal, and more time to apply them to budgeting and planning. It’s still up to accountants and executives to allocate funds effectively. But with a crystal clear (and automatically updating) understanding of how funds flow through individual properties and the organization as a whole, smart financial decision-making becomes the norm.
Sage Intacct gives VRMs a deep, dynamic look into their accounting data. And it doesn’t stop there. As a leading financial management platform, it can also handle the entirety of VRM accounting, from budgeting and planning to trust accounting. See what accounting looks when driven by Sage Intacct. Schedule a demo today with Ximplifi.
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