What functions does SAP Flexible Real Estate Management offer?
Real estate activity scenarios can include buying, selling, renting or leasing land or buildings. SAP Flexible Real Estate Management, a component available in ERP Central Component (SAP ECC), is intended to facilitate their supervision and administration.
Let’s take a look at some of the functions offered by SAP Flexible Real Estate Management.
Real estate master data management
Real estate basic data in SAP Flexible Real Estate Management is able to capture many details about real estate, such as the location, size, market value, and use of a given property for commercial, residential or recreational purposes. The master data provides a dual view – an architectural view and a usage view.
The architectural view represents the actual architecture of the real estate objects (i.e. rental properties). For example, a floor of a shopping complex is an architectural view of a real estate object (the shopping center) and does not change without remodeling or other changes. The usage view represents the use or purpose of a specific real estate object and can change as often as needed. For example, if a store in the mall closes, the lessor does not receive any payment until the store is re-let, that is to say that this space is no longer used.
The dual view of architecture and use means that full details of real estate objects such as a business entity, land, building or rental properties (master data in RE-FX) are all visible to a spectator.
The details of a rental object that can be kept in RE-FX are shared space (for example, shared office spaces), rental space (for example, part of the office of the company rented to a other) and the rental unit (for example, renting an office to another business). It is also easy to maintain logical and functional links between the various real estate master data objects in RE-FX.
Hire-purchase and hire-purchase
Renting and renting are specific functions of SAP Flexible Real Estate Management. A lease is a business process in which a real estate company rents land or other real estate from the owner for a fixed but long period. It is an expense. It also involves paying the landlord for the rented property on the agreed payment terms. A lease is a process of leasing the property to a client for a specified period of time and on agreed terms of payment. It is an income. RE-FX can address all possible capital and hire-purchase business scenarios and an overall cash flow statement showing rental expenses incurred versus rental income earned.
The contract management component of SAP Flexible Real Estate Management meets legal, accounting and statutory requirements to ensure full compliance with local and national laws. A real estate company signs a contract with a landlord to rent out a property using a specific type of contract. The landlord may possibly want to rent the property to earn a fixed monthly rent (or other rental payment frequency). The leased property can be leased to clients using a different type of contract. The possibility of integrating security deposits into any type of contract is also available in contract management in RE-FX.
The ability to manage the space not only from an architectural point of view but also for its use ensures that real estate companies are able to maximize the space for rent as efficiently as possible. For example, in a shopping center, it is quite possible to rent open spaces that allow different businesses to install visuals as well as set up kiosks for a limited time during holiday periods.
As with all components of SAP ECC, SAP Flexible Real Estate Management offers a large number of reporting and analysis tools. RE-FX must first be activated before a business can implement it. The first is as easy as activating the RE-FX option, while the second is a full project.
SAP Flexible Real Estate Management is also able to fully integrate with SAP Document Management System (DMS) to provide a central repository of documents resulting from RE-FX business processes such as contracts with owners or customers.