To say that real estate outsourcing accounting is complicated would be an understatement. The large sums of money moving in and out while selling and investing in properties can be daunting. These numbers need to be handled efficiently and accurately to maximize profits and adhere to the legal regulations. Any oversight or error in accounting could lead to losses and expose the enterprise to legal implications.
Real estate companies are expected to follow the standard accounting practices of the industry. These accounting practices and rules of bookkeeping could be overwhelming for someone who is not sufficiently trained in this field. Real estate companies often have in-house accountants for bookkeeping and handling of accounts. This might work well for smaller businesses. However, as your business grows and cash-flow becomes complicated, it becomes imperative to look for more efficient alternatives.
Outsourcing Accounting for Real Estate Firms
Real estate outsourcing accounting has been around for quite some time now. Organizations have been outsourcing non-core functions as well as complete accounting functions to specialists and focusing on their core business.
Accounting outsourcing in real estate has been clouded with some apprehensions as it involves the sharing of sensitive data with a third party. Nevertheless, more and more real estate firms are seeking the services of accounting partners. The popularity and success of real estate outsourcing accounting can be attributed to the advantages of the process.
Value for Money
Cost efficiency was always the biggest attraction of outsourcing. However, real estate outsourcing companies now goes a step further and assures higher value for your money. It helps in streamlining the operations and simplifying the overall processes. The result focuses on optimizing efficiency and deriving a better value for the money spent in the process.
Specialization and Expertise
FAO for the real estate industry is driven by knowledge and experience. Outsourcing ensures that your books and accounts are handled by people who are experts in the field of regulatory guidelines and accounting practices.
Prioritizing your Core Business
With a cumbersome and complicated process like accounting being handled by reliable real estate outsourcing professionals, you can prioritize your core business functions without any hassles. You can stay focused on the growth of your business and depend on the outsourcing agency to support your accounting functions in the backend.
Facilitating Real Estate Outsourcing Through Technology
Technology has been a great facilitator for the outsourcing of accounting for real estate firms. It enables clients to keep track of the functions. The outsourcing agency is able to have real-time updates about transactions happening in the business and take them into account immediately. Cloud-based services enable agencies to streamline tasks in a fraction of time. Firms can also rely on technology for the security of data in transition and storage.
In real estate accounting, the outsourcing firm accesses two essential data items – input documents, or source data such as bills & invoices, bank statements, ledgers, cash slips, etc. Transactions entered in accounting systems are supported by these records. Another essential data item needed in accounting outsourcing is accounting files. Usually, these files are stored on platforms like QuickBooks, Appfolio, MRI, OneSite, or Yardi.
Technology plays a vital role in transmitting the data items to the accounting agency while maintaining the sanctity of these records. While smartphones enable quickly transferring photos of the documents, they may not be convenient for a larger set of documents. Google Drive or DropBox are popular options for remotely accessing documents uploaded by the client. For sensitive documents like bank statements, utility accounts, or credit card accounts, the client can choose the “view only” option.
Accessing accounting files can be done through different methods. An online software-based method of accessing accounting files is a popular option as it streamlines processes, saves effort, and can be used for real-time entries and updates. Quickbooks online, RealPage-OneSite, Yardi, and Appfolio are some excellent examples of web-based software where real estate outsourcing firms can log in and access the files. The records are updated and available for review immediately. This method involves investing in software, but the cost is justified by the efficiency and accuracy of the process.
Real estate outsourcing firms can also access the files through remote access to the client’s computers. Reliable services such as GoToMyPC.com, LogMeIn or a secure VPN connection can be used for the purpose. This is a low-cost option, as no additional software is required.
Seek The Right Fit
The decision to outsource accounting can be challenging for a real estate firm. After all, it requires sharing sensitive data with an external party. However, careful scrutiny of certain factors will give you sufficient information to make an informed decision.
Quality vs. Cost
Many options are available in the market for outsourcing your accounting. While selecting the right real estate outsourcing partner, consider both cost and quality. Poor work quality can lead to errors in accounting, losses, and even penalties in extreme cases. A reputed outsourcing firm invests in training its staff and maintaining infrastructure to support the operations. Choose carefully while comparing cost and quality.
Data security is an important aspect to consider while selecting the right real estate outsourcing partner. Delve deeper into the steps taken by the agency for safeguarding sensitive data. Insist on signing an NDA (Non-Disclosure Agreement) to protect your information from any misuse.
Experience and Credibility
Accounting is a serious business. It needs in-depth knowledge of the process, guidelines, regulations, and system. Seek an outsourcing partner who has experience handling real estate clients and has proven its credibility in the past. An experienced real estate outsourcing firm will not only understand the technical details of the business but also address the cultural, social, and language barriers.
Once you have decided to outsource and shortlist the partners, you need to think about the next steps of the process. You might want to start small and outsource a part of your accounting functions. You may outsource accounts payable and accounts receivable initially before you move to end-to-end accounting solutions.
It is recommended to choose outsourcing partners who have prior experience of working with clients from the real estate industry. Asking for client references is an excellent way to get honest feedback about the agency.
OHI is a specialized real estate outsourcing service provider with almost fifteen years of experience in handling finance and accounting for real estate firms. With over fifty real estate clients, we are a preferred choice for outsourcing services in accounting, leasing, administration, analysis, and allied services.
Staff at OHI comprises of CAPs/CAs, MBAs, and accountants who are adept at the processes involved in US real estate accounting. Our reliable and scalable infrastructure is equipped to handle all the accounting needs of our clients from the US and Canada.
With OHI, you are assured of quality, efficiency, and accuracy in your accounting systems so that you can focus on your core business functions.
We invite you to experience real estate outsourcing through us.