Business Advisory directors Jack Deal and Ryan Pearcy look at the complexities of estate management and the financial administration issues business owners face in managing these effectively with people, processes, and systems.
Here we look at event management, for example running a venue to host wedding or other events. This is an area more estates are diversifying into and in this article, we look at how modern technology can help to streamline the financial operations of this area.
Event management differs from other areas of the estate operations but is usually developed to diversify operations and make the best use of the space and buildings within an estate. If done effectively it can create additional revenue with minimal overheads. However, managing events and venues is totally different to core estate activities and can be difficult to align and integrate with other operational areas.
Bookings and staged payments
The key to effective event management is to fully utilise the availability of your venue. This means that a booking system is essential. This can be as basic as a designated calendar that people can access, although this is booking management in its simplest (and rather old-fashioned) form and requires manual updating with the risk of error. Any changes need to be processed and communicated manually and all associated tasks updated (see below).
The simplest bookings will require a deposit followed by the main bill near the date of the event. Any extras provided on the day also need to be captured and billed separately. Flexibility and traceability here is key and integrating this with the farm or estate’s finance system requires event staff to have access to it. This leads to the temptation to keep separate manual records for the events side of the business, leading to more work for the finance team. In addition, a manual system leads to manual payment processes with bank details being taken over the phone. With this process being open to fraud it runs the risk of deterring customers from making a booking.
Scheduling and Project Management
Once a booking has been secured there will be several tasks that need to be completed prior to and on the day to ensure the event runs smoothly. These will involve multiple employees, subcontractors and potentially the customer as well. Scheduling and keeping on top of these tasks is the responsibility of the event manager, but managing this manually creates considerable risk and responsibility on one individual. It also generates challenges regarding availability of staff that need to be utilised across multiple departments which can lead to tasks not being completed. With larger events there are inevitably more individuals involved and keeping on top of who has done what and what is outstanding can become an admin headache even for the best managers, especially if everything is still being done manually.
Cost Allocation and Reporting
Ensuring that e the events side of the business is profitable means there needs to be visibility of the overall department costs, but to understand why it is profitable will require access to the finances of each individual event. Tracking this against budgets and quotes will highlight what has worked and what has underperformed. This will enable an understanding of whether specific types of events are worth focusing on, which should then influence the venue’s marketing strategy, and whether pricing needs to be adapted or costs negotiated.
A traditional way to track profitability is to have both project and departmental reporting running within the same finance system, with the onus being on the finance team to ensure the correct allocation of expenses against invoiced items. However, this creates a separation from analytical needs of the events team which can hamper their ability to adapt to changes. Decisions also need to be made about how to allocate overheads such as light and heat, that are used by multiple areas of the estate and the processing of these invoices between various departments can create an even greater challenge for the finance team.
Is there a solution?
Cloud-based event management systems are available, but integration into wider systems is still in its infancy so choice is currently limited. Project management systems are more widely available and a combination of these and other specific tools can match or go beyond dedicated event management systems.
How do they work?
A cloud-based event management system will have a dedicated booking system with the option to enable visibility of availability for potential customers. Quotes can be created that link to events inside the system and templates could be set up to structure tasks for events of the same nature. The system can have portals for customers and suppliers to jointly collaborate, enabling them to share tasks and, documents and creating one place for communication. It then integrates into calendars for employees, pulling back availability and pushing in tasks. There is also an integrated invoicing and payment system that tracks income per project and enables customers to make payments easily over the internet, whilst pushing that information into the relevant finance system. Costs are then processed through or pulled into the system via the integration with finance so that they can be allocated against events and compared to budgets. This enables a real time visibility of how the event is running for all key stakeholders, so that changes can be made, if necessary, before the event is complete. Individual event profitability can be reviewed within the event management system but with a controlled integration into the finance system departmental reporting would be automated.
Selecting the right cloud-based event management system for your farm or estate can deliver a significant reduction in the administrative burden shouldered by your finance team. With any system conversion comes the challenge of change management and the impact on the personnel running the new technology. Processes will need to be adapted, training tailored, and support secured. Getting this right can transform how you and your teamwork for the better.