Global Horizons Group is an Investment Group dedicated to purchasing, managing and eventually selling Real Estate at a profit in the South Florida and Atlanta metro areas. Global Horizons Group’s business plan centers on entering Joint Ventures with investors foreign to the United States, desiring a stake in the American real estate market.
Formed in 2009, Global Horizons Group (GHG) initially dealt in condos and single family homes scattered throughout the South Florida and Atlanta metro areas. Since 2013, GHG has been focused on small to mid-size multi-unit residential and commercial properties (ranging anywhere from 4 to 30 units), while also venturing into development of large scale multi-use projects in the Miami Downtown metro area. GHG also owns Property Management and Brokerage subsidiaries. The Group is Managing Member in over 80 different funds and engages in numerous Real Estate purchase and sale transactions every month.
Before Dedicated CPA began working with GHG in 2011, the company was experiencing massive growth. While this is very desirable, it can also lead to “growing pains” which are new challenges faced by a company as it expands, and the Group was struggling to keep up with an exponentially increased workload. A bookkeeper had been hired full-time to handle the accounting. They were using Buildium™, a cloud based property management software suite generally geared towards smaller property management firms and individual investors. The company outgrew this structure and software very fast.
The reporting structure throughout the company had to be revamped. The manner in which management tracked receivables and payables had to be redesigned to meet the rapid and continuous increase in activities in those areas. Financial statements were vague and did not truly represent the magnitude of transactions being generated on a daily basis. Vacancy rates were upwards of 40%, therefore, the Group met a challenge to properly maneuver and manage its over sixty different bank accounts. In addition, the accounting controls in place were inadequate to meet the demands of the business. Communication between the CPA and management was minimal except during tax time. Help was needed and needed fast to put things in place to match the growth and changes in technology and processes.
Dedicated CPA began by examining the client’s situation and carefully diagnosing the current system. After extensive discussion with the client, we agreed that an outsourced Controllership engagement would provide the best, most cost effective solution. Our firm would be responsible for revamping the accounting system, establishing controls over cash, receivables and payables, preparing monthly financial statements for each property, entity, and subsidiary, and preparing quarterly cash distribution statements for fund investors. We would also be responsible for preparing all entities and subsidiaries’ tax filings, as well as personal tax returns for fund investors, when requested, along with payroll processing for all employees. Additionally, we would provide continual, proactive tax and strategic planning, and also serve as a point of contact with fund investors on all financial and tax matters.
Our first step was to determine the viability of Buildium™ as an accounting and management platform for GHG. We determined that although the suite had some positive aspects, it was not the best fit for a client of this size. We opted for moving the accounting system over to Propertyware™, a RealPage, cloud-based management suite geared towards medium-sized property management firms. We found this solution to provide significantly improved management and reporting features, while still fitting within the client’s budget.
While getting ready to move all data over to the new system, we determined we could reduce the number of bank accounts active when first engaged to a mere handful, a solution which saved the company countless man hours and dollars. We also began establishing Standard Operating Procedures (SOP’s) for receivables and payables following industry best practices and our own experience. Receivables and payables could now be tracked to the penny, while the risk of error and/or malfeasance was minimized. We also assisted in creating procedures for paperless audit trails, with electronic copies of all pertinent documents automatically associated to transactions, ledgers, and objects. Our client is now almost 100% paperless.
With the new accounting system in place, the client began seeing a dramatic increase in occupancy and collection rates. Now that property managers have the proper tools to track pertinent unit and tenant information, the Group is running effectively. Since the implementation of our new system, GHG has experienced average 95% occupancy on all active units, and average collection cycle of only 5 days.
With Dedicated CPA as their trusted advisor and preparer of financial and tax information, fund investor confidence soared. This translated into every investment management company’s goal – Increased investment.
With our help, GHG moved past its growing pains, and now operates as effectively and efficiently as any competitor can hope for. Most importantly, management can now focus on what it does best – Finding, developing and funding profitable Real Estate investment ventures.
Our relationship with Global Horizons Group continues to this day. Although Dedicated CPA’s role has moved past the day-to-day challenges of back end management, we continue to provide strategic and tax planning, financial statement and tax return preparation, and remain Global Horizons Group’s trusted advisor and accounting partner.
As your company expands, you may find yourself in a similar situation. We are here to help. Give us a call at 305-423-9993 and we will work with you and guide you in making the right steps.
For more information, please contact: