Streamlining Finance After PBSA Mergers & Acquisitions

The privately built student housing market in the UK, with demand sharply outstripping the supply, presents a superb investment opportunity. The sector has proved its resilience over the last decade and most investors are sure that it will weather any political or economic storms.

UK investors are facing significant competition from US and Asia Pacific investors who are showing a tremendous appetite for this segment. Consequently, the sector has seen a lot of consolidation over the past few years and we continue to major deals happening every quarter. As the properties keep changing hands and new development enters the market, we also see property managers and operators expand the number of properties under their management.

One side effect: Decentralised Finance & Accounting

What happens when a company buys a few hundred beds in one city, a thousand in another, across say, 5-6 sites? What happens if these have been purchased from 2-3 different entities? Well, a lot of happiness happens with both the buyer and seller celebrating a successful deal!

However, from the accounting perspective, things begin to get interesting. There is every possibility that the accounting teams sitting in these locations use different workflows, processes, and software. One side effect is that it is going to be extremely difficult to get accurate data for financial reporting.

And why does that matter? It matters because eventually, the company leadership may not be able to assess the company financial position accurately enough to take informed strategic decisions.

A case in point: creating a master budget template following M&A activity

Following a major merger, the accounting activities our one of our key clients were carried out by several teams following different processes and reporting formats. The primary objective was to ensure that the best practices for accounting and reporting were consistently implemented across the group. In addition, the client wanted to:

Standardise the reporting processes for the entire group and obtain quality data for planning, budgeting and forecasting.
Get the final data from the site managers in the format suitable for the new software that was under implementation.
Develop a facility to drill down to view details on common parameters for each site.

Our team worked closely with the client’s Operations Director to fulfil the above objectives. By creating a dynamic master template from scratch, training staff across sites to input accounting data into a standard format, and smoothly navigating a phase-wise implementation, the following benefits were delivered:

Provide complete visibility from a group-wide level through a consolidated group budget with data integrated from all the sites.
Enable investors, board members and other senior stakeholders to get a complete overview of the Group Budget.
Allow authorised personnel to drill down on the basis of region, site, bed count, occupancy, assets, and a wide range of other parameters to provide an easy and quick overview.

A simple and elegant solution: a dedicated, centralised accounting team

QX works with 4 out of the top 10 PBSA companies in the UK. We have worked with many of our clients for almost a decade. Our accounting teams have witnessed the growth of the businesses and have faced the challenges that a growing PBSA business throws at its accounting teams.

This experience has enabled QX to develop a plug-and-play model for its clients: our clients never have to worry about handling large accounting volumes or scaling their teams – they know that QX has the capacity to absorb any amount of finance & accounting work that stems from the acquisition of new properties. With their dedicated team at QX working as the accounting Centre of Excellence, our clients can count on:

Professional and reliable accounting support
Insightful and bespoke financial reporting on time
Dedicated team of trained and experience PBSA accountants

Mahesh Jain, CEO of QX Finance & Accounting Services sums it up: “We provide world-class services with insightful reporting and combine these with plug-and-play models that make it easy to integrate new properties into the system. This means that our clients have reliable and strong accounting support to achieve their business goals. So, leveraging QX’s expertise in the accounting field is a no-brainer for any property management company.”

To learn more about the topic and to find out how QX can help streamline your F&A operations, please get in touch with us.

Originally published Nov 25, 2019 09:11:02, updated Jul 24 2024

Topics: Student accommodation