How cost allocation in a property system can simplify and increase control? When it’s time to report to the finance department, does it take unnecessary effort to get everything right?
There are several benefits to calculating internal rents faster and with greater accuracy. One is saving time by avoiding post-adjustments. Another is fostering a more positive internal work environment, thanks to improved clarity and control.
At Pythagoras we have noticed that companies with office areas often face this challenge. In today’s post-pandemic world of hybrid work, predicting office space utilization has become increasingly difficult. We will use this scenario to illustrate our view in this article, though efficient cost allocation is beneficial in many other situations as well.
Allocate cost based on spaces instead of calculating by headcount
Instead of relying on templates based on departmental headcounts, try allocating rental costs by spaces per department directly in the property management system. This approach allows you to calculate precisely the areas assigned to each department. You can even break it down by workstation if you track the number of desks or seats in each room. This makes it easy to determine which spaces should be charged to which department.
To take it a step further, you could measure actual utilization by integrating sensors to track occupancy levels.
Speed up processes and reflect reality in real-time
In this way you can avoid fixed templates tied to annual budgets that require post-adjustments. By reallocating areas in the property management system, the change is immediately reflected and recalculated in the internal rent and cost allocation.
This enables monthly follow-ups on internal billing while keeping your property management system up to date. Your monthly reports to the finance department will always be accurate, and internal tenants are charged.
How we solve Internal Cost Allocation
In Pythagoras Property System, we have a module that enables automated internal cost allocations for businesses and organizations in a flexible way. The automation is integrated with visual models, and agreements, making it easy and quick to reallocate internal costs more regularly, as often as every month.
Additionally, you can track these allocations in budgets, forecasts, and outcomes to manage changes and compare historical data.
If spaces are redesigned or reassigned, the changes are automatically mapped to the corresponding agreements in the system. This ensures that internal agreements and associated costs are updated seamlessly.
Learn more about internal cross allocation in Pythagoras here.
