Workspace Finances: Fundamentals for Operators

By Amanda Fanoun · 28.03.2017 · 6 MIN READ

Many shared workspace and Coworking operators manage all of their finances on their own with only support from an accounting software and the annual consultation of a tax accountant. For some, it’s an inevitable aspect of running a business and can be mastered with monthly repetition. But for most, it’s a painful and tedious process that involves bubble-gumming together difficult-to-acquire reports from multiple applications, manually importing numbers into the invoicing system, and later fixing the inevitable mistakes.

Future-forward operators opt for workspace management platforms that offer one-click high-level and granular reporting capabilities and seamless integration with financial and accounting software. Many operators prefer this simplicity – and it’s certainly appreciated by their tax accountants and members alike.

However you handle your workspace finances, know this: it will have a direct impact on member experience, member retention and your overall success as a business. Whether you have a dedicated financial controller or undertake the finances on your own – and regardless of your method – there are critical, big-picture fundamentals to observe for efficient money management in your shared workspace.


Automation is Key

Implement a software system that allows you to automate simple billing and invoicing tasks without having multiple steps in the process that only leave room for error. From bill runs to proforma invoices, the technology you use can either cost or save you time and effort in cross-checking multiple reports, running risky imports or exports, all of which can botch or delay cash collection and negatively impact your overall business performance.

Automation is essential for managing renewals and rate increases. Presetting automatic price increases for accounts at a defined span of time within in your billing system can guarantee increased revenues for absentminded or just-plain-busy operators, where they may have otherwise slipped through the cracks. Integrating your tools and systems will see to it that these automatic price changes are reflected real-time in your billing and invoicing systems.

Integrate Systems

With the proper integration, operators can avoid running reports of accounts, license agreements and contracted services every time they do a bill run. Integrating your member and services management system to both your services inventory and billing tool will streamline the overall financial process and facilitate invoice generation and payment collection. Designate codes to all of your products and services – from workspace offerings to your café – and assign account numbers to all of your members to ensure that you are tracking what is consumed by whom and are accurately allocating charges to the appropriate accounts. When all of these moving pieces are stored on a single platform, it requires less manual exporting or importing into and out of different applications.

Choose your accounting system carefully. Shop around and find one that makes it easiest for you to manage your data, accounts, charges and most importantly, one that has an API and easily integrates with your system. Don’t skimp on cost when it comes to choosing your accounting tools. The good ones are usually the most expensive, but they’re also the ones revolutionizing real-time integration.

Work in Real-time

Tracking every financial transaction within the workspace is a tedious but necessary process, and operators must have an organized approach to systematically measure revenue, categorize income by products and services, and have up-to-date financial information at their fingertips to spot-check business performance. Leveraging real-time information enables operators to control the day-to-day earnings, safeguard their P&L from mistakes that could slip through the cracks and have a detrimental toll on the business, and react quickly to data that raises a red flag.

Keeping real-time information makes the maintenance and transfer of information to your accountant quicker and easier, allowing everyone involved in the financial aspect to be on the same page at the same time.

Preserve Integrity

As a service provider, your biggest concern should be protecting the integrity of your accounts. This means that all your customer and vendor information must be securely stored within your system. Your customers’ information should be safeguarded and protected by tiered user access.

Operating on a shoestring budget may mean having to trust a newly hired team member to handle all tasks related to your shared workspace – including finances. Granting that person access to all of your accounts information is a risk that you shouldn’t run until you fully trust that person. Even then, beware! Your staff should not be mucking around in your system with open access to your members’ credit or debit card information. Implement a system that allows tiered user access to your staff and safeguards the personal and billing data your members provide to you.

Point of Sale

A POS system is crucial to maintaining the integrity of your data. It can limit the number of times purchases, prices or charges are entered into your systems, substantially reducing errors that trickle down to cause unhappy customers, and will significantly decrease human error. Working in real-time with Point of Sale and recording charges only once and immediately will undoubtedly improve accuracy. This brings us to our next point.

Beware of Human Error 

To prevent mistakes in billing and invoicing, the less hands-on action you have with your data, the better. Give your members access to an easy-to-use services marketplace platform so they’re not reliant upon your community manager or receptionist to manually enter a charge.

Better yet, install Point of Service systems at key service consumption spots, such as vending machines or at the entrance for day-coworkers or guest visitor sign-in. If your systems are integrated, these charges can funnel directly to customer accounts and appear on your next bill run. This prevents the intervention of multiple humans entering, exporting or importing data, and avoids having to credit or debit accounts, or pacify an angry member for an incorrect charge.

Meticulously Track Services & Payments 

Make sure that the products and services you’re selling and recording on the books are being posted to the right general ledger accounts and subsequently make it accurately to your CPA (or charter accountant). Has a move-in date changed? Generate and send proforma invoices to your customers so they can anticipate their new charges rather than rectifying errors with credit notes. Prevent your members from raising invoices or payments after an accounting period is closed to avoid a long list of credits or debits to your members in the following period.

Frequently track and calculate deferred income. With automatic reporting and real-time financial integration capabilities, posting deferred income allocates the correct amount to the corresponding period. This keeps your revenue income and tax obligations in order.

In Summary 

Each operator or workspace company small or large has its own approach to financial management. While a uniform method may not exist across the board, adhering to these tried and true essentials will aid in streamlining your finances, preventing future headaches, and improving the overall management of your workspace business.

About the Author

Amanda Fanoun

I've been writing content about flexible office and technology for essensys since 2015. My focus is to bring engaging and insightful perspectives to the flexible workspace sector of the commercial real estate industry.