Brokers Beware! Stop Letting Old Tech Eat at Your Profits

Naturally, brokerages tend to place their focus more on lead generation programs, CRM software, and sophisticated websites since these systems are what help them realize their revenue goals. But no matter how strong your software selection or tech stack is, you can't always just set it and forget it. Brokers need to focus on the backend to keep the other gears of the business turning effectively.

If brokers ignore the backend, they've missed the opportunity to carve out additional profitability and claim a competitive advantage with a modern back office. With revenue at the forefront of success metrics for brokerages, it's no surprise brokers and owners often view back office systems as an afterthought.

Back office systems may seem like they're not revenue drivers, but the lack of flashiness shouldn't fool brokers. In real estate, back office accounting platforms have historically been expensive and clunky, and with non-cloud-based software, leaving the heavy lifting to be done manually. These platforms leave administrative pros frustrated and lacking in operational necessities such as seamless integrations and automation of simple tasks.

It's not just the admin experts who struggle; brokers are left to deal with the downstream impacts of these outdated, non-intuitive systems from the past. Convenience aside, these old systems eat away at productivity and profit.

What exactly does clunky back office software look like?

How to know if you have an outdated back office

Brokers might be wondering if they're dealing with an outdated back office, so they can use this checklist of common characteristics to help them assess the state of their backend:

• A lack of flexibility
• Frustrating processes
• Wasted time on mundane tasks

When we put these together, brokerages can repeatedly face issues like:

• Processing manual commission payments and plan adjustments
• Not having accounting system integrations
• Slow (and poor) agent onboarding experiences and processes

These are straightforward tasks that are the table stakes a brokerage is built upon. They should be simple, but with an outdated back office setup, they're not. And brokers don't have that kind of time to waste: they need to be nimble, allow their team to hit the ground sprinting, spend time wisely, and have the flexibility to scale quickly.

Brokers also don't realize how much old technology costs them in cold, hard cash. Most obviously, the cost of additional human hours spent on manual and unnecessary work adds up to thousands of dollars per month. The frustration these users feel can lead them to leave the brokerage, meaning brokers need to spend time and money hiring. Clunky agent onboarding processes or manual management of commission checks can have new agents eyeing the door.

From a technical perspective, old systems need more maintenance, can cause more downtime, take up servers and storage space, and be a hassle to manage over time. In short, relying on and running old tech costs brokers more money and drags down their growth.

How can brokers free up those thousands of dollars as profit and drive more business?

Armed with the negatives of an out-of-date (and out-of-touch) back office, brokers need to focus on key backend features. Here are the ones brokers need in order to automate, streamline, and turn their boring back office into revenue-generating software:

Cloud-based. Automated. Integrated.

In our digital-first world, investing in robust and scalable cloud architecture is a must. This type of tech means brokers can work smarter, not harder, have greater security, and can grow seamlessly alongside their brokerages. Newer, modern back office solutions also easily provide a simple and clean user interface available to staff from anywhere, anytime they need it.

In the same vein, automation is king. Brokers' accounting software should automate mundane tasks like ACH direct deposit payments, agent billings, and commission plan management. It's also crucial to have tech with robust and seamless integration into the other systems used regularly. Look for full integrations into commonly-used software like Quickbooks, Dotloop, SkySlope, DocuSign, and fully integrated business platforms like kvCORE.

Transaction and Commission Flexibility

With teams on the rise and competitive models abounding, commission plans and models used by brokerages are no longer cut and dry. Brokerages' back office software should factor these complexities in and support their custom plans — not dictate them. Brokers need to seek out platforms to streamline their payment process. These platforms offer simple ways to handle splits, caps, team plans, sharing, recruiting rules and so much more. Brokers should also look for the ability to set up as many rules as they need.

Business Intelligence

What if there was a way for brokers to get a centralized, real-time snapshot of how their business is really doing? This is where business intelligence comes into the fold. Back office tools can provide real-time access to brokers' pipelines of commissions, agent performance, and lead conversion rates. These insights provide brokers with actionable intelligence to make smart, effective business decisions. The modern-day back office should leverage integrations with business intelligence (BI) tools to give real-time data, but allow brokers to adjust and customize their reporting, including setting up automated delivery of reports.

Affordability

As brokers assess modern tech with robust features, keeping the bottom line in mind is a must. Finding effective, modern back office tools and tech might sound daunting, expensive and hard to deploy. But there are systems designed specifically to make brokers' life easier and cost half as much as older systems on the market.

Brokers shouldn't get stuck thinking it's too difficult or expensive to update their back office. That old way of thinking poses a serious threat to the growth of their business. Brokerages who have successfully updated their core accounting and commission management systems are singing the praises — and wished they'd done it sooner.

To view the original article, visit the Inside Real Estate blog.