RERA reporting and escrow accounting in construction software

Real estate regulation changed two things about developer accounting that most construction software was not built for. Money collected for a project is restricted to that project and can only be withdrawn against certified progress. And a body of information that was previously internal — unit inventory, timelines, approvals, financial position — is published periodically to an external audience.

Systems that predate this handle it with a quarterly scramble: a finance team assembling figures from a general ledger that was never partitioned the way the disclosure requires, cross-checked against a sales sheet maintained separately. It works, in the sense that the filing gets made. It is also where the discrepancies come from, because the numbers are assembled rather than derived.

Restricted funds are a ledger structure, not a bank account

The common implementation is to open a separate bank account per project and consider the requirement met. The bank account is necessary and not sufficient, because the constraint is on what the money may be used for and when it may be withdrawn — questions the bank statement cannot answer.

In the ledger this means collections are attributable to a project and a unit, withdrawals are attributable to certified progress, and the permissible balance is computable at any moment rather than at quarter end. A chart of accounts using cost centres for projects will produce approximately the right figures and will not enforce anything, because nothing stops a posting to the wrong centre. What is wanted is a model where a withdrawal cannot be recorded without the certification it depends on.

A separate bank account records where the money went. It does not prevent it going somewhere it should not have. The control has to be in the ledger.

Progress is the control, and progress is certified by people

Permissible withdrawal is a function of construction progress certified by professionals — not of the calendar, and not of a project manager's percentage estimate in a planning tool. That certification is an external document with an author, a date and a scope, and it is the authority for a financial operation.

So it has to exist in the system as a first-class record with the document attached, not as a percentage field someone types. The chain that has to be reconstructable afterwards is: this certificate, covering this scope, authorised this withdrawal, which funded these costs. Where the certificate is a file in a shared drive and the percentage is a number in the ERP, that chain exists in somebody's memory.

Disclosure is a publishing pipeline

Periodic disclosure has a defined structure and a fixed cadence, and it is produced from data the business already holds. Treated as a document somebody writes each quarter, it takes days and introduces transcription errors. Treated as a pipeline — derived from the ledger, the sales system and the project schedule, generated, reviewed, then filed and retained as an artefact — it takes hours and the review is about whether the underlying data is right rather than whether the typing is.

Retaining each filing exactly as submitted matters for the same reason it does in payroll: what you declared is a fact about a point in time, and it needs to survive later corrections to the underlying records.

Inventory becomes a public fact

Unit availability, booking status and area declarations are published, which means the sales system stops being internal. Where bookings are tracked in a spreadsheet and the declared position is compiled separately, the two will diverge — not through dishonesty but because a cancellation is recorded in one place on a Friday and the other on a Monday.

One record of unit status, with the declared position derived from it rather than maintained alongside it, removes an entire category of correction. It also means booking, cancellation and transfer need proper state transitions with dates, because the declared position at a past date has to be reconstructable.

What we would build

• Project as a first-class accounting dimension with restricted balances, not a cost centre convention
• Certification as a record with the document attached, and withdrawals that cannot be posted without referencing one
• A single unit inventory with dated state transitions, from which the declared position is derived
• Disclosure as a generated, reviewed and retained artefact rather than an assembled document
• An audit trail covering who changed a declared figure, when, and against which supporting record

One note on scope: this describes how the requirement shapes system design. It is not legal advice, and the proportions, timelines and state-level variations that apply to your projects are a question for your legal adviser — the rules differ by state authority, which is itself a reason to keep them configurable per project rather than assume one set.