Should Real Estate Firms Outsource Their Accounting

Real Estate Accounting embraces or covers the accounting rules for any kind of real estate transactions that can be used to structure real estate deals appropriately.

Real estate firms need to fully understand their current financial accounting, regulatory and compliance reporting requirements when dealing with different types of real estate transactions.

It is therefore essential for real estate firms to have a professional team of client-focused real estate accounting services, which is capable of catering to all of their accounting needs in this ever-changing business environment.

A well-managed accounting system is vital and the best way to reduce overheads and provide value to the internal or finance functions is through the method of real estate accounting outsourcing.

Outsourcing real estate accounting services helps organizations reduce their accounting responsibilities. Majority of construction and real estate business firms have fewer employees to perform all of their accounting functions and to outsource real estate accounting is the best option to improve a company’s financial reporting and operations.

Role of accounting in real estate

Like every other business, real estate also needs accounting services. The importance is large enough that without accounting for real estate companies; the company is less likely to survive. 

Real estate involves a lot of managing data and optimizing financial assets. There is an evaluation of the profits and losses that have occurred periodically. Therefore, outsourcing in real estate industry is a common phenomenon. The role of accounting for real estate agencies can be several. The skilled workforce of outsourcing real estate services helps with profit estimation. If you have ever come across such a process, you would know the many phases involved in it. It cannot be done by an amateur, which is why commercial real estate accounting is often outsourced. For a flawless movement of tasks in a real estate company, the accountant is preferred to have experience and skill to not make errors. Only then can a real estate company enjoy the benefits of outsourcing fully. Here we have discussed the different advantages of accounting outsourcing to understand its relevance in real estate better. 

Advantages of Accounting Outsourcing

The real estate and property management sector has emerged as one of the leading sectors to adopt outsourcing extensively to scale up with limited overheads, to cut costs and improve processes.

The transaction intensive nature of this industry makes it suitable for resource efficient scaling up and for cost reductions through outsourcing and technology.

Accounting outsourcing offers multiple benefits to real estate and property management firms such as-

• Cost Savings – By outsourcing accounting, the real estate firms can save about 30% to 50% on their accounting costs in terms of staffing costs when hiring a full-time accountant.
• Growing without Overheads – Real Estate firms can expand their businesses without incurring overheads arising due to staffing and training costs.
• Access to Industry Standard Accounting Practices – The real estate firms will get exposure to industry standard accounting practices in addition to getting the timely, accurate reports thereby helping in workforce flexibility and conservation of capital.
• Knowledge of Outsourced Firm – Specialized service providers have an understanding and experience of accounting processes that are specific to the construction and real estate industry such as revenue recognition rules, lien waivers, insurance certificates, proposals and contracts. Such experience helps in shortening the time spent on training and quickly implementing the accounting process.

The Bottom line

As we have already discussed, accounting has a major role in real estate. It is an integral part of any corporation to take care of the financial aspects. Outsourcing accounting for property management companies helps a lot of different managements within real estates, such as construction companies, real estate agencies, housing enterprises, etc. We can observe a cumulative effect of outsourcing accounting services. 

Of course, an agency can prefer to handle its finances on its own. But the process can be exhausting and time-consuming, leading to the wastage of company resources and assets. Wouldn’t it be a lot simpler to trust experts to do your finances? Mistakes occurring in financial management can have serious repercussions, too. It would be a lot wiser to consider outsourcing for your financial aspects. Partner with the best outsourcing firms in the country to grow your company further.