The Real Cost of Poor Real-Time Financial Reporting
"I think the biggest opportunity, and also the big blind spots are around tempo, like, how fast can you see a problem and actually do something about it?" explains , VP Europe at Ï㽶´«Ã½, a financial management platform for real estate developers.
Late cost visibility alone can erase between 5-10% of project margins, according to recent research from Bain & Company. For an industry already working with compressed returns, this lack of timely construction cost reporting represents the difference between profit and loss.
The problem isn't a lack of care—it's timing. As Stefanescu notes, "Most finance teams usually operate on a monthly or quarterly rhythm. When you close the books after the month end, you realize you're 15 or 20% over budget on HVAC, for example, but by that point, you've sort of burned through your contingency already."
This delayed visibility creates budget overruns that could have been prevented with proper real-time financial reporting systems.
What Sets Top Performers Apart in Budget Control
Drawing on her construction background, Stefanescu observes that the highest-performing teams share several characteristics when it comes to project budgeting: "The teams that consistently deliver on time, deliver on budget, are not necessarily the teams with the fanciest tools or the biggest budgets." Instead, she identifies three key traits for effective cost control: "They generally tend to know their numbers in real time, not weeks after an important event has happened. They have very clear ownership, so everyone has a very good understanding of who's accountable for what and they can actually course correct if something goes wrong, because they see problems early enough to do something about it."
Strong Internal Championship for Financial Oversight
The best CapEx management implementations typically come down to someone internally being empowered as a great champion. "I've just been part of an implementation like that recently at a leading private investment firm where their entire sort of CapEx and ESG integration worked because they had one person who could bridge those silos and drive accountability across departments," Anca shares. This stakeholder collaboration proved essential for maintaining budget control across complex projects.
The Investment Perspective on Cost Control
From the investor side, , who heads up the real estate technology group for Europe and APAC at Invesco, emphasizes the importance of data quality for asset managers: "When we are looking at what actually sets us apart from other projects is when we can actually surface reliable and timely data...for us, it's important to have real time information so that we can see traceability and accountability, because that allows us to monitor the performance and anticipate funding needs that we have."
This real-time financial reporting capability is crucial for forecasting and risk management. She adds a crucial caveat: "One of the things that makes it quite different, also that where it works really well is if we've got a good culture so we can bring in the technology, but if we don't have the teams that want to embrace the digital workflows, then we can't actually utilize them in the right way."
How to Achieve Quick Wins in Budget Control: Start with Invoice Processing
For organizations looking for immediate impact on cost control, Stefanescu recommends starting with a specific workflow that addresses both invoice processing and project budgeting: "If I could implement one thing tomorrow, I would really digitize my invoice approval process, and connect it to budget tracking. And I will explain why, because these invoices are the moment when your budget assumption meets reality."
She warns against a common pitfall in financial oversight: "Don't just try to digitize a broken process. I think far fewer organizations take a step back and say, like, okay, what are we trying to solve here?"
One UK investment and development manager achieved dramatic improvements in construction cost reporting through this approach. "Before digitizing their invoice and budget tracking, they were essentially entering manually all of their invoices into Excel, checking them, marking them against the budgets, routing the invoices for approvals, a very labor intensive but also quite error prone workflow, and they never really had a real time view of where they stood," Stefanescu explains.
The result? "They cut the time that they were spending on cost reporting and budget management by roughly 50%." More importantly for preventing budget overruns, "The risk management became strategic instead of reactive…and of course, they can understand or better anticipate cost creep early and adjust where they can actually make an impact."
Real-World Impact: CapEx Planning Success Stories
The most impressive results in CapEx management come from eliminating data silos entirely. Stefanescu shares the example of an investment and asset management firm managing a portfolio of about €1.5 billion: "They actually integrated their ESG management and their cost management into a single workflow...They cut their ESG portfolio analysis from several months, which is what used to take them, using external consultants, to 15 minutes done internally."
The financial impact was dramatic for their CapEx planning: "In one specific case, they were planning a 1.2 million retrofit. They ran the data through Ï㽶´«Ã½ and ran a couple of scenarios across both sustainability and financial workflows and KPIs, and they realized that they could cut that investment down to 200,000 Euros and still hit the same ESG targets."
This level of cost control and forecasting accuracy represents a massive improvement in risk management for retrofit projects.
Why Asset Managers Struggle with Portfolio-Level Budget Control (And How to Fix It)
from Mace, who leads global retrofit initiatives, identifies a critical challenge in CapEx planning at the portfolio level: "When we start working with a customer, looking at the portfolio level, you know whether the client owns 100, 500 or 5000 properties, quite often, they're suffering from decision paralysis, because they don’t have the clarity of where should they start first." Oftentimes, clients are already working with consultants and track hundreds of KPIs because someone said they should - but these KPIs really prevent them seeing the forest from the trees.
She emphasizes the need for simplification in project budgeting: "It's really then an issue of looking at all those KPIs and simplifying them - focus on just a few...if we’re talking about retrofitting say we look at energy and carbon on one hand and then on the other side, there is the cost implication. Focus just on those."
The stakes are high for retrofit projects and stakeholder collaboration, as she points out: "We have solutions on what retrofit best practice looks like for all of the archetypes. We've been retrofitting for many, many years. What we have not done successfully is retrofitting at scale. And that's why, at the moment, if we are not tripling the retrofitting activity, there is no chance of hitting 2030 let alone 2050 climate goalsâ€
Building Infrastructure for Real-Time Financial Reporting
Pattison describes Invesco's approach to creating standardized data flows that support better construction cost reporting: "We went through various different processes of trying to standardize how we get the data and the information from our development companies that we work with. And then we started looking at other platforms to see, could we actually then use those platforms where we become a bit more real time, rather than getting the data at the end of the period."
The results have been transformative for their financial oversight and forecasting capabilities: "We brought in a platform, and that allowed us to actually build workflows. We started to get the real time information massively improved but it also helped us to track the financials in a much easier way, because we could then see on a quarterly basis, how is that affecting the financials."
This improved visibility supports better CapEx management and helps prevent budget overruns before they become critical.
Comparing financial management approaches - traditional vs strategic financial management (modern, real-time)
Implementing Better Cost Control: Overcoming Resistance
Despite the clear benefits for budget control, implementing new systems remains challenging. Pattison identifies the core issue: "I think the biggest challenge is actually trying to get people to move away from Excel, to actually look at what other technology tools are out there...it's about changing the culture of how we've always used Excel."
She advises on successful project budgeting implementations: you shouldn’t bring on a piece of technology just because you can, you should instead look at what would be helpful for you in 80% of the cases. Also, pay attention to the processes - often, for a technology to work well, you also have to map and change the way you work. "But sometimes, people don't want to change the process. They just want the technology to fit around the process or the operating model. But really, when you're bringing in technology, you've got that opportunity to rethink how you do things and get the best out of the technology and best at your organization at the same timeâ€
Stefanescu echoes this in the context of financial management: "Typical challenges in really slow implementations that we see, are really the ones that do try to boil the ocean, the ones that sort of want every single edge case covered, every historical workflow replicated. That's when you get 18-month implementation projects that stall."
Alexandra recommends a different approach to improving financial oversight: "The power of piloting those technologies and doing a very short sprint to show how it works, so that there is an overall buy-in within the organization, as opposed to immediately trying to reshape all of the issues and processes."
The Path Forward: Practical Steps for Better Budget Control
For CFOs, investment and asset managers, and developers looking to improve cost control and prevent budget overruns, Stefanescu offers practical advice: "If you're a CFO, an asset manager, developer looking for a quick win, look at a high friction workflow, such as the invoice processing flow. Assign a team to drive it, set a clear goal, make it time bound, a fixed budget, and don't treat it like an IT project, treated like a business project with measurable ROI."
Drawing on her construction experience, she makes a powerful analogy about the importance of real-time financial reporting: "On a construction job site, you usually immediately know if something is wrong, if a delivery doesn't show up...But in the back office, you can be sort of bleeding costs quietly for weeks before you get to notice. So I think the top performers bring this job site mentality, if you will, to financial management. They want to see the problems as they happen, not after they've already happened and have compounded."
Key Takeaways for Improved Financial Oversight
Successful project budgeting and CapEx management require a proactive approach that combines visibility, structure, and accountability. Here’s what top performers do differently to succeed:
- Implement real-time financial visibility to catch cost overruns early by automating invoice processing and connecting budgets directly to reporting dashboards.
- Unify data across finance, operations, and ESG workflows to eliminate silos and create a single source of truth for decision-making.
- Empower strong internal champions who bridge departments, drive accountability, and ensure cost control remains a shared priority.
- Standardize reporting and forecasting processes to improve portfolio-level insight, making risk management more predictive than reactive.
- Foster a culture of financial discipline where every team understands their role in maintaining budgets and preventing cost creep.
For asset managers overseeing retrofit projects and development portfolios, the message is clear: budget overruns aren't inevitable. With proper cost control systems, real-time financial reporting, and effective CapEx planning, organizations can collapse the feedback loop from weeks to days or hours—catching problems when they can still be fixed at reasonable cost.
In an industry where 5-10% of margin can disappear through delayed visibility alone, this shift from reactive to proactive budget control isn't just best practice—it's becoming essential for survival.
Budget Overrun Prevention Checklist
Sources and Expert Contributors
This article draws on insights from a panel discussion featuring:
Research cited:
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Ï㽶´«Ã½ case study with KauriCab
Frequently Asked Questions About Budget Control in Real Estate
The biggest challenge is cultural rather than technical. As Invesco's Katerina Pattison notes, "the biggest challenge is actually trying to get people to move away from Excel" and embrace digital workflows. Success requires not just implementing technology, but also appointing an internal champion with authority to drive adoption, changing processes alongside implementing tools, and building a culture where financial discipline is everyone's responsibility, not just the CFO's.
Developers use financial management platforms that integrate invoice processing, budget tracking, and real-time reporting. The most effective tools eliminate data silos by connecting previously separate systems for accounting, project management, and ESG tracking. Key features include automated invoice capture and approval workflows, real-time budget vs. actual comparisons, portfolio-level dashboards, and integration with existing accounting systems and bank feeds.
The ROI of digitizing invoice processing includes: 50% reduction in time spent on cost reporting and budget management, elimination of manual data entry errors, real-time budget variance visibility, and early detection of cost overruns while corrective action is still possible. One example: a UK investment firm cut a planned €1.2 million retrofit to €200,000 while still meeting ESG targets, simply by having integrated financial data for scenario planning.
Budget overruns in construction projects are sometimes caused by delayed cost visibility. When finance teams operate on monthly or quarterly reporting cycles, they discover cost overruns only after 15-20% of the budget has been exceeded and contingency funds are depleted. Research from Bain & Company shows that late cost visibility alone can erase 5-10% of project margins.
Implementation timeframes vary, but successful approaches start with short pilot programs of 2-4 weeks focused on high-friction workflows like invoice processing. Organizations should avoid "boiling the ocean" by trying to digitize every process at once. Instead, focus on one workflow with clear ROI, prove value quickly, and then scale. Full implementation typically takes 3-6 months when following this phased approach, versus 18+ months for projects that try to solve everything simultaneously.
Retrofit projects maintain budget control by integrating financial and ESG data into single workflows for scenario planning, establishing simplified decision frameworks around energy/carbon, cost, and program timeline, implementing portfolio-level prioritization to avoid decision paralysis, and using real-time visibility to optimize existing buildings before major capital investments. As Mace reports, basic building optimization can achieve 25-35% energy and carbon savings before requiring substantial CapEx.
Asset managers control CapEx spending by implementing standardized digital reporting across all development partners, integrating data into centralized platforms for portfolio-level visibility, using real-time financial reporting for forecasting and funding decisions, and establishing clear workflows for invoice approval and budget tracking. Leading asset managers like Invesco report that real-time information "massively improved performance from an operational aspect" while making it easier to track financial impacts on quarterly returns.
Real-time financial reporting prevents budget overruns by providing immediate visibility into cost variances as they occur, rather than weeks or months later. This allows project teams to take corrective action—such as renegotiating with contractors or adjusting scope—while changes are still cost-effective. Organizations implementing real-time reporting have reduced budget management time by 50% and transformed risk reports from historical documents to strategic early-warning systems.
