Given the current circumstances, a lot of emphasis is given to cost cutting in the business world. The real estate industry is no exception, given the competitiveness of the industry it is important for real estate businesses to cut cost and be competitive in the market. Outsourcing can be a good option to reduce cost. Back office tasks such as accounting, though important but time consuming can be outsourced to specialized service providers. Outsourcing accounting services for real estate can prove to be extremely helpful in not only saving cost but also in enhancing the financial reporting of the organization.
Some of the key accounting tasks which can be outsourced in real estate accounting are as follows:
- Tenant Accounting – Lease setup, move-ins, move-outs
- Accounts Payable – Entry of POs, invoice entries, utilities payments and disbursements processing
- Accounts Receivable – Monthly rent run, Processing rent receipts and Collections
- Bank, Credit card reconciliations, Month end accruals
- Monthly operating reports, Variance analysis, Financial and Operations dashboards
- Real Estate Tax, Insurance, Mortgage Escrow Reconciliations
- Tracking RR escrow funding, RR escrow reconciliations, and RR reimbursement requests
- Prepare budgets, Financial analysis and Cash flow forecasting
- Year-end finalization, Audit support, Fixed asset schedules, CAM reconciliations
- Rent Roll Analysis – Covering financial analysis, tenant analysis, location review etc
Popular real estate accounting packages
Below is the list of accounting and related software commonly used in real-estate industry
- Yardi-Voyager, Genesis
- Timberline Property Management
- MRI (by Intuit Real Estate Solutions)
- Spectra Property Management
- QuickBooks and Quicken
- Avid Payable
- RealPage – OneSite
- The Property Manager
Real estate accounting outsourcing involves the accountant to work with great care, accuracy and follow certain strategies and principles. The accounting knowledge, level of detail required in accounting, and compliance to statutory laws is much higher than standard accounting work. Additionally most firms report financials at entry level, property level and at investor level, there by necessitating a multi-level, complicated accounting structure.
Therefore it is essential for you to make sure that the firm which you engage with is a reliable one and has good track record with previous clients. Gather information regarding the background of the company and do a reference check to avoid any kind of dispute in the future. Money is a precious asset and you cannot just invest into any incompetent outsourcing firm. Outsourcing accounting firms are great time and energy saver, if selected with acute diligence and great deal of consideration.