Reporting to the Owner

A report is a recap of events. The purpose of a report is to portray past events accurately in an accessible format that communicates information readily to persons inside and outside the organization. This lesson focuses on the proper information to include in reports and how to interpret reports. These two issues are central to creating an effective report.

Reports should be concise, useful, and informative. Reporting is a cumulative process. For example, budgets are a necessary part of reporting, since a budget shows activity for the month (cash budgets) or the year (annual operating budgets). Comparing several budgets highlights trends at a property. Likewise, rent rolls, delinquency reports, and vacancy reports reflect continuing financial activity and are crucial parts of any report. The accumulation of all this information through reports adds up to a comprehensive picture of a property’s financial health.

This lesson emphasizes periodic financial reports to clients or owners of properties, since the owner is ultimately responsible for the property. The owner makes major decisions about the property and sets the property’s financial goals. Reporting to the owner is critical in ensuring that the owner’s goals and objectives are met.

Normally, the report to the owner includes a narrative portion with a summary and a discussion of the extent to which the owner’s goals and objectives for the period have been achieved. The narrative should appear as the first page of the report or in a cover letter. The narrative should be supported by any necessary financial reports, including a summary of cash receipts and disbursements, a variance report, a capital improvements recap, and an income statement. The capital improvements recap describes capital expenditures. The monthly cash-flow budget often summarizes inflows and outlays of cash.

The report to the owner is usually accompanied by a rent roll that provides details of lease arrangements with all tenants to date as well as vacancies. Vacancy reports and delinquency reports clarify the information in the rent roll.