Budget Season is very similar to the NFL Training Camp. The season begins in June or July with Budget Camps and end with the Super Bowl (data import into Accounting) in February.  Training camp for Budget Season begins with the coaches preparing for the upcoming season. What budgeting tool will we be utilizing?  Are we changing the chart of accounts, or charge codes?  What are the payroll periods?  What is the percentage of payroll increases? What percentage of income increase can we obtain in the current economy?

 

We prepare the playbook and the stats ready to hand out at the first Budget Camp meeting.  The property managers begin to arrive with contracts, bids, and stacks of paper to work thru the budgeting process.  We pass out the themed t-shirts, serve breakfast, lunch, and dinner as we put our staff thru the paces of budget preparation. Do you have three bids for each capital expense item? What is your occupancy goal? What contracts are increasing?  During our Budget Camp the coaches work side by side with the community staff to iron out the perfect 2019 budget.  Then we submit the plan to the Regional Manager for review.

 

The Regional is like the preseason games of the NFL.  They review the budget like watching the preseason game footage.  Making changes and recommendations to improve the budget.  The season advances to the halfway mark.  Accounting adds mortgage and tax information.  The IT team adds new computers or expected software costs.  The playoff rounds begin.

 

Once the Regional Manager is satisfied with their projections, they submit the budget to the Vice President for review.  Crunch time.  The final rounds of changes, or so we think.  Touch downs are made in some budget line items.  Fumbles are made on others.  A Hail Mary may be the best guess you can give for unexpected capital items.  The team heads toward the final round, the Super Bowl, referred to as Ownership.

 

Budgets are formally presented to owners.  Compiled in neat, professional binders including graphs, charts, marketing verbiage, and pictures.  Owners review and have multiple questions.  This is where the great quarterbacks of property management shines.  They know their property and market so well, they can effectively answer any questions lobbed their way.  Why do you need these capital items? Defense.  Why did the marketing budget increase? Offense.  Finally, special teams explaining the projected increase in income.  We have now reached the final stage and the owners have approved our 2019 budgets.

 

Confetti falls! Fireworks go off! Sorry, I was dreaming for a minute.  In reality we now send out budget to the IT team or Accounting to be uploading into our property management software.  Season Over! But wait, post season begins.

 

With our new budget in place, we kick off 2019 with budget variance explanations, reforesting of budgets, and uncovering all the little things we failed to budget that will bust the NOI and we count down the number of weeks until Budget Season starts all over again.

 

Do you need assistance with your budget season?  How can we help?

 

– Kim Senn