Using Yardi to Enhance Internal Controls

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Every sophisticated firm needs robust internal controls to manage risk and ensure accurate compliance. Internal controls aren’t only for publicly traded firms. Today’s private investors often insist on a compliance program meeting the requirements of the Sarbanes-Oxley Act of 2002 (“SOX”) at their portfolio companies. Real estate firms like REITs, whether public or private, are turning to Yardi to help them establish and enforce a set of internal controls.

How does Yardi fit into an internal controls regime?

Meeting the requirements of any internal controls process can be complex and time-consuming. Many companies use labor-intensive manual processes to verify compliance, incurring costs and creating greater risk of errors. Yardi fits into the equation in a number of ways, all of which can dramatically reduce the time CFOs and others must spend on compliance:

  • Reporting and audit. Reporting has always been one of Yardi’s great strengths. In an internal controls regime, having numerous ways to display and analyze data is key to verifying compliance and identifying areas of weakness. Because Yardi tracks usage information, firms can audit not only their financial records but also how well their staff are complying with internal controls requirements.
  • Process automation. By customizing Yardi’s workflows a business can integrate its internal controls directly into the software. For example, a firm with strict financial approval limits can provide automated escalation whenever a threshold amount is exceeded, ensuring that a purchase order cannot be issued without direct action by authorized personnel.
  • Data collection. Once integrated into the day-to-day work of a business, Yardi can become the comprehensive record of details an internal controls process might track. On the accounts receivables side, Yardi’s database houses complete lease and payment information, allowing continuous monitoring of revenue and leasing activity. For accounts payable, Yardi automatically ties invoices to purchase orders, and purchase orders to budgets. Yardi also can track important details like who approved a transaction, when it was approved, and contingencies that could require additional action.

Tailoring Yardi’s implementation to a firm’s internal controls rules

Using Yardi as a compliance tool may require some adjustments among a business’s front line staff charged with putting internal controls into action. Ideally, Yardi’s implementation should be tailored to fit the organization’s way of doing things, so the platform seamlessly fits into the internal controls environment and ensures compliance automatically.

Building internal controls into a Yardi implementation begins with a requirements discovery process and flows through to post-implementation training and system adjustments. Depending on the firm’s requirements, an implementation geared toward compliance may need features such as these:

  • Fine-tuned security settings to prevent unauthorized activity.
  • Custom workflows designed to precisely mirror the company’s internal controls regime.
  • Customized reporting to assist with compliance using native tools like Yardi’s SQL Service Reporting Services (SSRS) or Yardi Spreadsheet Reporting (YSR).

In some cases a Yardi customer may want to consider an additional module to incorporate the module’s specialized tools into its controls process. Yardi’s Investment Management module, for example, allows firms additional functionality for designing workflows, reporting, and other compliance procedures dictated by investor contracts and corporate governance documents.

33Floors understands your compliance challenges

Helping our clients harness the power of Yardi to meet their compliance requirements is routine for the team at 33Floors. We’ve built our team to combine technical expertise with deep experience in the real estate industry. In other words, we speak your language. Our services don’t stop at the implementation stage, but continue to ensure each client’s implementation stays current as business and regulatory requirements evolve.

Send 33Floors a message to start a conversation about how Yardi can enhance your business’s compliance efforts. 

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