Real Estate Investment and Capital Management Company – Systems Implementation
The Challenge
A Real Estate Investment and Capital Management Company with 26 corporate entities had recently worked with Teel StratVisor Group (StratVisor) to complete systems analysis and implementation of a Yardi core accounting system. They now needed to add Corporate Accounting and Investor Accounting to the core system. The goal of this implementation was to have a central system to manage and track of all the data for these corporate entities and their Tenant-In-Common (TIC*) investments, and to integrate the corporate accounting into this new core system; however, they did not have the internal resources available to manage this project.
The Client asked StratVisor for assistance in managing the implementation of their corporate accounting into the core system and to complete a full implementation of Yardi’s Investment Accounting Module.
What We Did
Because of the scope and complexity of the project, two separate, detailed project work plans were developed for the Corporate Accounting and Investment Accounting implementations.
The work plans documented all the tasks, critical dates, resources and deliverables for both projects. Once the work plans were completed and approved by the client, a visual timeline for the implementation was developed.
Corporate Accounting
The initial step of this process was to develop the new Chart of Accounts (COA). Once the COA was completed, the team then mapped all the existing Quickbooks accounts to the new Yardi COA.
Next, templates were created to import two year’s prior information from Quickbooks to Yardi. This was a six-step process that was completed for 26 separate entities. The six steps were:
- Data extraction from Quickbooks, including completion of a data/format scrub due to the export format from Quickbooks
- Create data mapping
- Create .CSV file
- Import batch file to new system
- Review data in batch mode prior to posting
- Balance/validate data between Quickbooks and new system
The current year data was then entered manually for four different areas: vendors, check formats, Account Clearing House (ACH) information for investors, and NSF.
Once the data was entered and verified, StratVisor developed detailed documentation on how to use the system, including text and screen shots. The Client’s internal resources were then trained on the system.
Investment Accounting
For the Investment Accounting process, the first step was to create architecture (or flowchart) to illustrate each investment. This architecture included all corporate entities and TIC investors in each investment. Next, investor import templates for owners, and contributions and distributions were developed to facilitate the data transfer. This was a 7-step process:
- Data extraction from Quickbooks and Excel, including completion of a data/format scrub due to the export format from Quickbooks
- Create .CSV file
- Develop upload template
- Verify data format between old system and new
- Import batch file to new system
- Review data in batch mode prior to posting
- Balance/validate data between Quickbooks and new system
The data to be loaded into the new system had to be identified, verified and prioritized prior to loading. Once the data was imported and verified, each investment entity had to be linked to one another based upon the investment architecture. In addition to the investment entities, each TIC investor was linked to each applicable investment. As these tasks were completed, the StratVisor team documented the investment accounting input screens and illustrated the linking relationship between the entities.
StratVisor then established the equity roll-up rules, which are the instructions to the system on how distributions are allocated within the deal structure. This involved reviewing the architecture for each of the 26 entities, documenting the distribution flow and then setting up the rules for each entity in each investment.
As part of the overall project, StratVisor completed two additional tasks:
Documentation
StratVisor developed detailed documentation on how to use the system, including text and screen shots. This 170-page manual included the following sections:
- Yardi Navigation
- Investment Accounting Overview
- Investment Structure
- Investment/Investor Entities
- Fund Transaction Types
- Investment Accounting Reports
- TIC Investor Distribution Reports
- Bank Accounts and Check Formats
Reporting Requirements
A list of reporting requirements, both internal and external, was developed for both areas, using samples provided by the Client as a starting point. These reports were then developed and tested for functionality and accuracy.
The Result
As a result of working with Teel StratVisor Group, the Client received the following:
- Final COA documentation
- Abstracted legal structure of 26 investments
- 26 investments set up in the Investment Accounting module
- Verified investor’s ownership percentages for each investment
- Historical information for 900 investors moved into the core accounting system
- Historical corporate history moved into the core system
- The ability to print custom investor reports
- 100% system-generated customized reporting
- Detailed documentation for each process, including text and screenshots
* Tenant-In-Common – When an exchanger wishes to complete a 1031 exchange, but does not want to exchange into another management intensive property, one option available is for the exchanger to invest in a portion of a professionally managed, commercial grade property along with several other investors. This is an investment structure called "Tenant in Common" or TIC. Tenant-in-Common is a form of holding title to real estate that allows investors to own an undivided interest in property, and thus, if structured properly, satisfying the 1031 requirement for "like-kind" property to be exchanged.
