At the onset your fears of outsourced accounting can be assuaged in the knowledge that the real estate property management industry is one of the leading sectors to extensively adopt outsourcing in order to improve processes, cut costs, and scale limited overheads.
In an earlier blog we talked about when it is the right time to outsource your real estate bookkeeping? In this blog we talk about whether real estate companies should outsource their accounting at all.
Real estate is a transaction intensive industry. Therefore, real estate management inevitably rides on a freight load of accounting. Any kind of real estate transaction made that can be used to structure real estate deals, comes under the umbrella of real estate accounting. This includes the understanding of financial accounts, as well as regulatory and compliance reporting requirements for different types of real estate transactions in the ever changing business environment. This requires a properly managed accounting system with client-focussed services that cater to all accounting needs.
So the foremost reason why real estate companies should outsource their accounting is to reduce their accounting responsibilities without compromising their accounting itself. When they do this they
- improve the company’s operations and financial reporting
- efficiently scale resources (irrespective of whether business had slowed down or speeded up)
- reduce costs from not having to run an in-house accounting department replete with the mandatory technology and staffing
When a real estate company can save up to 45% on costs by outsourcing rather than spending that much more towards the upkeep of an accounting department, doesn’t that qualify as the first voucher for outsourced accounting?
When they can expand their business without incurring overheads that arise with staffing, training and infrastructure costs, that certainly ought to get any businessman’s attention.
When they can get access to industry standard accounting practices, timely reports, specialized knowledge and experience in industry-specific rules and processes (like lien wavers, insurance certificates, proposals and contracts) that shorten the time and increase the accuracy on the same work, that ought to sway the vote in favour of outsourcing!!
In conclusion, the answer to whether real estate companies should outsource their accounting function is most unmistakably yes! Because better health is guaranteed to real estate firms who outsource their accounting.