Real estate activity within a banking group (development, asset management, real estate services), operating across several business lines with specific economic and accounting characteristics.

The specificities of the real estate business (accounting based on progress, program inventory management, long cycles) were not adequately addressed by standard group processes. The activity's Finance Department lacked visibility into the actual profitability of operations, and management dialogue with the group was difficult.

Before implementing any tools, a clarification of the target management model and its alignment with the group framework was necessary.

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The main challenge was incorporating the specific characteristics of the real estate business into the dialogue with the group: how to manage an activity whose economic and accounting features (accrual accounting, program inventory management, long cycles) do not naturally align with the banking group's standard processes?

Group reports did not reflect the economic reality of real estate transactions, and the business's Finance Department struggled to explain its performance using formats ill-suited to its role.

The objective was to develop a system that would:

• manage actual profitability per program, integrating the specificities of progress,

• monitor cash flow and financing needs on a project-by-project basis,

• produce reports that conveyed business performance in language understandable to the group.

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The Finance Director of the real estate division approached us after several frustrating experiences with group reports that didn't reflect the reality of his work. We worked closely with his team and the Group's Management Control Department to develop a management model acceptable to both parties.

Our support covered:

• modeling the profitability of real estate programs, incorporating progress-based accounting, allowing for tracking of actual margins rather than accounting margins;

• implementing project-by-project cash flow monitoring, providing visibility into short- and medium-term financing needs;

• designing reports that translate business indicators (physical progress, sales, margin at completion) into formats easily understood by Group management.

Management communication between the division and the Group has significantly improved, with each party now understanding the other's indicators.

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