Streamlining complex systems in strata management

RSM worked with StrataPort to develop an enterprise strata management platform to automate complex financial and administrative tasks, boosting efficiency and reducing the risk of tax errors.

Efficient strata management is critical to Australia’s property industry and broader society. Strata managers oversee the administration, maintenance and compliance of almost 320,000 schemes across Australia, which together house more than 2.2 million people. Combined, the properties are valued at $1.1 trillion. Strata management currently includes detailed and laborious processes for the financial arrangements of each scheme, including specific funds such as administration, sinking or maintenance funds, and payments to and from thousands of entities.

Coordinating this task involves accounting for a variety of tax arrangements within each strata scheme, from providing GST and non-GST payments to suppliers and contractors, and receiving payments from potentially hundreds of individual lot owners. 

Australian-developed digital innovation - the enterprise strata management platform StrataPort -  streamlines and automates these processes, saving time, money and allowing staff resources to be redeployed into higher value customer-facing and business-development roles. It is primarily aimed at strata managers with hundreds to thousands of small to mid-sized schemes in their portfolio. 

RSM worked with StrataPort in 2021 during development of the first-in-class application, providing accounting and business advisory expertise to engineer the financial management and accounting processes.

StrataPort Chief Executive Officer Tony Barlett said the input from RSM partner Thomas Skeffington was invaluable. 

“It really needed someone to understand the nuances not only of accounting, but of strata accounting,” Mr Bartlett said. “He was honestly a joy to work with, really amazing.”

Building an automated management platform from the ground up

StrataPort comprises multiple automated workflows for strata management. The platform streamlines complex administrative processes and drives compliance and transparency for strata managers while also providing comprehensive interactive tools and resources for lot owners and suppliers.

Its creation responded to the needs of a client, and has resulted in the automation of dozens of different workflow processes. This includes owner's certificates that are required when a strata title property is being sold. Certificates must include current financial information along with legal, zoning and other administrative elements. StrataPort has automated the end-to-end certificate process from real-time payment processing to certificate generation and delivery.

RSM brought financial management and tax expertise from a blank canvas over an eight-month period in 2021. Together, they established the end-to-end financial processing platform from the strata management accounting to complex GST management.

“The knowledge and insight of RSM helped us to learn about how we could build the system to automatically display the GST registration of the supplier and the building when the payment was processed,” Mr Bartlett said.

“RSM helped us from basic accounting all the way through to complex GST - and how we could deal with that in an automated sense - with operators with no fundamental knowledge of GST status. They helped us to understand what the potential problems were so we could build the system to minimise all the problems that could arise.”

Further, RSM provided expert guidance to solve complex challenges in the automated BAS management process. Strata schemes operate multiple funds, which are accounted for individually, but must be combined and then truncated when reported to the Australian Taxation Office. Truncation of the combined totals resulted in accounting errors within the individual funds that could not be resolved by any known mathematical process.

The solution required development of a unique algorithm that generates a series of rounding entries in various GST clearing accounts to balance the financials. Overall, the system enables non-financial operators to use the platform easily without specialist accounting knowledge.

Raising productivity and compliance

StrataPort’s financial management system has been implemented at about 2,500 schemes and 25,000 lots in Victoria over the last 18 months.

During this time, its automated workflows have facilitated more than half a million transactions, processing hundreds of millions of dollars.

Of the dozens of workflows that are automated in the solution, the savings from two have been quantified to up to four hours a year per building. Across the industry, this is a significant saving in time and labour.

Additionally, compliance processes are simpler, faster and more accurate through automated reporting. There is also increased transparency to lot owners, who can log into the system and see invoices and accounts.

“We’re running fully automated processes with complex requirements such as processing daily interest on overdue accounts ” Mr Bartlett said. “We’ve only had one minor issue that we were able to quickly rectify thanks to great support, advice, and testing.”

FOR MORE INFORMATION

Contact your local RSM adviser of Thomas Skeffington.