The technology revolution has opened new doors for real estate owners, developers and managers, especially in terms of enterprise automation. Property management and accounting applications have evolved accordingly, providing new levels of integrity and depth to meet the stringent requirements of today's elite users.

Real Estate Investment Trusts (REITs), in particular, demand the most robust accounting software available, enabling sophisticated data manipulation and reporting. During the past several years, Integrated Business Systems (IBS) of Fairfield, New Jersey, has become a leading provider among this niche, with a client roster that includes three of New York's top four REITs, as ranked by Crain's New York Business.

In the following Q&A session, Scott Donnelly, director of sales and marketing at IBS, addresses some of the more unique considerations in providing REIT automation.

Q. How is servicing a REIT different from serving a private owner?

A. The level of scrutiny from the SEC (U.S. Securities and Exchange Commission) and shareholders places an added level of pressure on a REIT to maintain a bulletproof accounting system. REITs require substantial enterprise systems that allow rigorous audit trails while supporting subsidiary ledgers and schedules. It is also imperative that the system provides close adherence to GAAP (generally accepted accounting principles) standards. Of course, private owners also benefit from this level of integrity and sophistication.

Q. Does the large scope of REIT portfolios come into play?

A. The key to accommodating portfolios of any size lies in maintaining a robust underlying engine that can produce schedules for unlimited properties. Many accounting products evolved from the PC world, and they are designed to handle smaller portfolios. Adapting these products for large enterprises presents a challenge. Others have been designed from inception to handle large portfolios that need to report on several different layers of consolidations and roll-ups. For example, the IBS system has always maintained three levels of reporting, including "superentity," "entity" and "property." As a direct result of our REIT clients, we recently introduced a "groups and views" financial reporting module that allows the user to report data on either a property manager or geographical region basis, regardless of their entity or property structure. This type of flexibility is easily achieved due to our wide-scale initial design. It has enabled us to effectively service clients like Vornado Realty Trust, one of the nation's largest REITs, for which the IBS system has captured some 66 million square feet in retail and office space.

Q. As long-term IBS clients transformed into REITs, what did it take to adjust to their changing needs?

A. During the 20 years since IBS's founding, advances in technology have completely altered the business world, and we have always helped our clients stay ahead of the curve with the most up-to-date technologies and service.

We grew up in an owner/developer marketplace, so we have always needed to pay careful attention to accrual-based accounting principles. Our infrastructure has been easily adapted for large-scale applications. In fact, IBS has brought a number of long-term clients Ñ like Mack-Cali Realty Corp., Reckson Associates Realty Corp, Acadia Realty Trust and ARC Properties Ñ through their transition from private company to REIT.

Q. What types of enhancements have you offered to satisfy REIT users?

A. IBS has always offered truly customized solutions for our users, and the needs of REITs have prompted a number of product enhancements. One of the most significant was the introduction of a DYNA for Windows® interface last year. The project began when Mack-Cali Realty Corp. approached us with the desire to use DYNA projection modeling for its 254-building, 28.3 million-square-foot portfolio.

DYNA is fast becoming the industry standard for sophisticated modeling. Yet in order to maximize its benefits, there must be a strong, reliable connection to a company's core accounting data. IBS had a fair investment in projection interface software and used that as a springboard for this ambitious project. The results have been outstanding and provide a prime example of our ability to evolve with our clients.

Q. What should REITs look for in an enterprise accounting system?

A. In addition to rigorous audit trails and tremendous attention to GAAP, REITs should demand tremendous flexibility and control over running reports and ledgers. The same data set should be able to produce both cash and accrual reports. Users should have access to unlimited history retrievals in order to run comparisons. They should be able to change their financial presentations and customize reports at will.

Q. What lies ahead for real estate automation?

A. Technology will continue to open new doors for REITs and other real estate companies. At IBS, we are launching a major development that will provide clients with the ability to publish their financial data over the Internet. Our web-enabled, XML-enabled interface will allow end users to take their financial reports and place an XML wrapper around them. This will allow reports for specific portfolios to be accessed, with the appropriate security clearance, over the Internet. Ultimately, this will significantly reduce cost of distribution while facilitating access to data - two key objectives in our increasingly paperless business world.