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How Digital Innovation Reduces Human Accounting Errors in Commercial Real Estate

A wonderful thing about the proper implementation of technology is that it excels at limiting the number of ever-prevalent human errors, thereby greatly lessening their negative impact on commercial real estate (CRE) development.

One of the best examples of this in action can be seen in the financial space.

When it comes to accounting, eliminating human error is a top priority. To put it simply, anything connected to money is too important to get wrong, regardless of whether you have a department of accountants, or must manage much of the bookkeeping yourself. And when you’re dealing with finance, one simple oversight can compound quickly into a costly problem.

Much of human error is preventable

According to a 2019 survey from Blackline magazine, which gauged confidence levels in financial data of more than 1,100 C-suite executives and finance professionals, almost 70% of respondents reported that they made an important business decision based on inaccurate financial data.

Furthermore, the majority of survey respondents stated that they often failed to detect financial errors before reporting results, with 55% struggling to identify them.

The C-suiters agreed that if inaccuracies in financial data are not detected and corrected before being reported, there are negative consequences. Among the major impacts are reputational damage, inability to attract new investment and increasing debt levels.

Luckily, technology exists today to smooth the accounting experience, while simultaneously automating function and validating data.

Using Artificial Intelligence to reduce errors

Through automation and machine learning, Artificial Intelligence (AI) can significantly lessen the number of errors.

Any task requiring manual data entry invites mistakes. The best way to eliminate these mistakes is by utilizing AI technology to automate error-prone tasks of low value, such as data entry. Streamlining data through automating coding eliminates the need for manual data entry, thereby reducing the likelihood of human error.

AI automatically extracts workable data from incoming invoices, contracts and proposals immediately. It then seamlessly imports this data into your existing accounting software.

State-of-the-art software is imperative

In the commercial real estate industry, developers are very dependent on desperate and disjointed systems and spreadsheets. The best solution to combat this issue and reduce accounting errors is to have a state-of-the-art software solution designed specifically for the industry which offers single entry of your data and the ability to use artificial intelligence.

This not only significantly reduces errors but gives the project perspective as much attention as the financial perspective. A state-of-the-art solution allows the software modules or functionality to be project aware, with each module providing the necessary project perspective to complement the general ledger perspective.

But success in the developer market comes from its ability to go beyond the details and show management error-free top-level project status and the various detail levels that support it. The software solution must address the complete life cycle of a real estate asset: from project inception to project completion, and from pre-development to property management, in order to minimize budget debt and maximize profit, efficiency and client satisfaction.

Moreover, a proper state-of-the-art solution can help accounting staff and managers become more efficient by decreasing the time it takes to produce reports to management, owners, partners and financial institutions.

 

For more information, or for a demo of our software products please Contact Us Here.