As an agent, your CRM is your lifeblood. It’s your phone book, task manager and resource to get what you need now and in the future. But running a business is a whole different ball game.
As well as CRM, you’re loading to websites and third parties, managing listings, financials, reporting, HR, payroll and much more.
When I started Box+Dice in 2005, all I wanted to do was help agencies manage their clients plus some other office duties. But already by 2010, the platform had expanded to include a lot of business functions, including an accounting platform, website hosting, blast emails and more. What it had, in fact, become was an ERP.
But what exactly is an ERP and why do you need one for your real estate business?
ERP stands for Enterprise Resource Planning. An ERP platform integrates all of your agency’s business processes in one place and comprises a number of different components.
What does an ERP for a real estate business look like?
CRM
Customer Relationship Management is a business philosophy, a CRM platform is merely the tool for executing this philosophy. A real estate ERP should definitely incorporate CRM functionality such as managing buyers and sellers, but this is merely one component of your business platform and not necessarily the centrepiece.
Marketing management and promotion
One of the greatest headaches for real estate principles is the accurate management of expenses related to a listing. Also, the efficiency (or lack thereof) in converting a signed authority into a published listing ready to receive enquiries. Your ERP must nail this.
Interoperability
This is your platform’s ability to integrate easily and flexibly with third-party applications such as ActivePipe, RiTA by AiRE, Realtair, REA, Domain, Bidtracker, your company website, your property management platform and more. Interoperability turns your ERP platform into your central hub for all the tech you and your agents use to find deals and manage your business. It also lets you pull all the data and information you need into one central place for easy viewing and access.
Reporting: Performance and Corporate
Being able to measure all the aspects of your business is essential. An ERP platform centralises all your company data and is therefore the source for all your company’s reporting. To ensure that reporting doesn’t eat into other tasks, it has to be fast, easy and automated.
Accounting
Many real estate CRMs have some or all of the above functionality and call it a day. They leave it to you to plug into third-party accounting software, which means this is where an ERP truly shines in comparison, by being a central part of the platform. And accounting itself has several components:
Trust/Escrow Accounting
It’s impossible to sell a property without receiving a deposit, which makes administering trust (escrow or client money) integral to the financial management of a listing and your business since your agency’s primary source of income streams from this account. In regions where vendor-funded advertising is the norm, accurately paying money to your agency from this account is essential in order to stop leakage. Due to the technical difficulty of doing all this, most CRMs outsource this or plug into a partner product.
Advertising Accounting
When your advertising accounting is a key component of your ERP, you can easily avoid such situations as consultants using outdated price lists and undercharging sellers by giving you complete control over expenses, discounts, suppliers, items and prices, all from a single, centralised place.
Payroll Accounting
Without an ERP, commission time can be a true nightmare. Your admins may spend hours or even days juggling multiple spreadsheets to get agent commission statements done, never mind managing retainers, deductions and balances brought forward. With a true ERP, payroll is fully integrated with advertising so that expenses, discounts and overspends are automatically deducted from gross commissions or agent commissions and flow directly to agent commission statements, ensuring that statements are always accurate and easy to prepare. And because all the data is entered throughout the transaction lifecycle, you always have an accurate record of commission accruals so there’s little work to do at commission time.
Scalability
Scalability doesn’t just mean adding more clients. It means being able to scale every part of your business, to plug into new products as they emerge, grow your team and open more offices, handle more listings and sales – all without having to expand your administrative resources. In other words, do more in less time, which is exactly what an ERP facilitates.
Conclusion
Looking at all these components of an ERP, it’s obvious that CRM is only one small part of what you need to successfully manage and grow a real estate business. What you need is a single, centralised ERP that covers every aspect of your business from top to bottom.
