budget bootcamp
Overview of Budgeting Process
The budgeting process is a back-and-forth game management incorporates to determine financial allocations for various units.
Down Units
Not typically budgeted for unless there is certainty about unavailability.
Example: If a unit is damaged or not ready for occupancy due to events like a fire (e.g., Pine Meadows), budgeting must account for the downtime.
Model Administration Units
Administration units allocated to apartment life situations are informed by the current market rent.
The lease end dates for these units inform subsequent budget actions.
Ensure current market rent is updated accordingly.
Interaction and Clarifications
Employees must note lease end dates and include potential changes in rent post-expiration in the budget.
Communication is essential when filling out budget segments, especially when clarifications are required.
Example of an interaction regarding individual budget input for model admin units.
Employee Comp
Employee Compensation
Full Compensation: Information pulled from the payroll tab; typically involves no user input at budgeting.
Partial Compensation: Budget considerations that may include allowances and subsidized benefits for on-site employees.
Bad Debt and Delinquency
Bad debt write-off calculations are to employ a percentage-based method based on empirical evidence collected throughout the year.
Example: Researching previous months' bad debt write-offs to establish reasonable estimates for future budgeting.
Parameters for bad debt include:
Utilizing historical data for budget predictions.
Precise percentages computed from actual data to estimate owed debts can guide financial forecasts.
Formatting and Entering Budget Data
Data entry should adhere strictly to format requirements (use of light blue cells).
Use of worksheets aids in calculating averages and realities of financial standing across months.
Important Guidelines:
Auto Save Function: It is critical to ensure the workbook auto-saves any changes made.
Highlighting Cells: When entering data, highlighting allows easy access and visibility to the corresponding figures.
Utility Charges and Other Income Streams
The document includes various income streams such as application fees, cable income, late fees, and their corresponding budgeted predictions.
Budgeting considerations depend on the average collection rates or historical data:
Application fees: Indicate the number of applications expected per month multiplied by the fee.
Cable income: Budgeted based on the average received over a set period.
Late fees: Anticipated late fees should also follow a calculated average based on previous trends.
Nonrecurring Income and Special Charges
Nonrecurring Income Options: Budgeting must consider various non-standard income streams:
Application fees based on vacancies.
Cable incomes accounted for quarterly.
Special charges for services offered based on actual historical data.
Employee Hours and Payroll
Employee budgeting must segregate between those living on-site and regular staff.
Total compensation must reflect hours worked (e.g., management, maintenance) and any allowances, with accuracy being critical.
Special attention should be paid to overtime budgeting and fluctuating team member responsibilities as needs vary seasonally.
Conclusion
The guidance establishes multiple procedures for managing vacancies, move-ins, and processing expected income versus actual outcomes. Each aspect is integral to maintaining the financial health of the properties and maximizing efficiency through thoughtful budgeting efforts. Appropriate notes should be recorded, considering conditions, historical performance, and potential changes per property operations.
Note: It is necessary to address any variations, especially regarding new legislations that may impact income streams (e.g., rental regulations, pet policies). Proper documentation for internal tracking and compliance is encouraged throughout the budget preparation process.