Faced with challenges, many real estate professionals are exploring a new outsourcing path to streamline their operations and gain peace of mind. Outsourced accounting has become a powerful solution for property owners seeking to overcome real estate-specific financial obstacles.
This blog will discuss real estate owners’ key pain points, how outsourcing accounting addresses those challenges, and why this approach is gaining traction across the industry.
Pain Points for Real Estate Owners
Despite their expertise in managing properties, many real estate owners find the financial side of the business to be a significant hurdle. Here’s a closer look at their common pain points and frustrations in accounting management.
People Challenges
- Difficulty finding talent: Recruiting and retaining accountants with real estate expertise is no easy feat. The aging workforce and lack of succession planning only add to this challenge.
- Rising costs: The cost of hiring and retaining experienced in-house accountants is climbing, putting a strain on budgets. Many in-house teams also lack specialized technical training, leaving gaps in knowledge and performance.
- Coverage issues: Vacations, medical leave, or turnover in accounting departments can lead to critical disruptions in financial operations.
Process Inefficiencies
- Lack of structure: Many real estate operations lack formal accounting processes, written procedures, or strong internal controls. This increases the risk of errors and even fraud.
- No contingency plans: Most in-house teams are not equipped to handle unforeseen staffing disruptions, leading to further inefficiencies.
Technology Limitations
- Outdated systems: Real estate accounting often lags in technology, running on obsolete software or dealing with manual processes.
- Limited integration: Without automation or integrations for banking and AP tools, operations remain slow and prone to mistakes.
Office and Facilities Constraints
- Small spaces: Limited office environments make expanding accounting operations or attracting talent difficult.
- Lack of scalability: As property portfolios grow, scaling up in-house operations becomes resource-intensive.
Financial Reporting Frustrations
- Delayed reporting: Late or inaccurate monthly reports hinder decision-making.
- Tax complications: Missed tax deadlines and poor bookkeeping often result in higher prep fees and penalties.
- Lost opportunities: Property owners struggle to make timely, informed decisions without current and accurate data.
What an Outsourced Accounting Firm Provides
An outsourced accounting firm is designed to address these challenges head-on, offering tailored solutions that meet the specific needs of real estate owners.
Comprehensive Services
- Weekly and monthly accounting workflows, including tasks like bank reconciliations and month-end closes.
- Preparation of detailed financial reporting packages.
- Expertise in technical accounting for complex real estate transactions.
Communication and Coordination
- Scheduled monthly review calls to discuss financial health and answer questions.
- Seamless collaboration with tax teams for streamlined year-end filings and proactive strategies.
Advanced Technology Solutions
- Integrate accounting systems with AP, bill pay platforms, and custom dashboards.
- Assistance in migrating to modern cloud-based systems, ensuring real-time visibility and access to financial data.
- Access to internal technology teams for support with data analysis and system optimization.
Staffing & Continuity
- A collaborative, layered team structure ensures redundancy, minimizing disruptions during absences or turnover.
- Access to experts across multiple accounting disciplines, from SALT (State and Local Tax) to advanced financial reporting.
Space and Cost Efficiency
- A fully remote service model eliminates the need for expanded office space.
- Scalable solutions that grow (or adjust) with your portfolio without recruiting additional employees.
Why Real Estate is Ripe for Outsourcing
The real estate sector is uniquely well-suited for outsourced accounting thanks to its recurring and standardized transactions. In addition, the specialized knowledge required makes the case for outsourcing even clearer.
It eliminates internal payroll and training costs, while offering flexibility to scale with fluctuating portfolios. Top-notch technology from external providers ensures accuracy, reduces errors, and enhances financial visibility.
Additionally, an outsourced accounting firm collaborates seamlessly with tax professionals to uncover savings opportunities, streamlining compliance and profitability. By leveraging outsourcing, real estate businesses can focus on growth while leaving accounting to seasoned experts.
A Strategic Advantage for Real Estate Owners
Outsourcing accounting isn’t just a backup plan or a solution for emergencies anymore. It’s a strategic decision that offers real estate owners enhanced visibility, reduced risks, and more efficient operations.
By partnering with an outsourced accounting firm, property owners can shift their focus from the back office to increasing their portfolios and returns.
If you’re ready to elevate your real estate business and streamline financial operations, our team is here to help. Talk to our team today and explore how our real estate outsourcing accounting services can support your success!
Questions?
Reach out to a Wiss team member for more information or assistance.
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