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Step By Step Guide To Outsource Your Real Estate Accounting
When you are in the real estate accounting business, the last thing that should bother you is back-office tasks that do not require any real decision-making from you. Giving importance to these tasks will only take away your focus from core activities that have a direct bearing on business growth and development.
This industry needs your undivided attention at all times simply because of the volatile nature of the real estate scenario the world over. Price fluctuations on your basic commodity – land – occurs at the slightest cause – economic recession, the electoral process, and even a terror attack. Hence, any missed chance to cash in on business opportunities can adversely affect your business growth.
One of the core decisions that you should definitely take is to outsource accounting for your real estate business. This one step can free you from time-consuming and tedious bookkeeping functions. By entrusting the responsibilities to professional accounting services, you get quality output at very affordable costs. Check for the things before signing on the dotted line and entering into a contract with an outsourcing agency.
Follow these points while outsourcing your real estate accounting:
1. Weigh the options
There are two ways that you can plan out your approach. First is outsourcing a part of the accounting functions and keeping the rest in-house. The other is outsourcing comprehensively. The latter should be your primary decision.
By outsourcing a section only, you’ll face issues when consolidating the two components for finalizing the balance sheet – one processed in-house and the other by the agency. Choose to outsource the total process. Only then will the purpose of outsourcing be fully served.
2. Select the services
While it has been seen that the best route is to outsource the full services, at the time of pre-contract discussions with the company, the following points should be emphasized on.
- Accounts payable should be thoroughly taken care of.
- The address on the invoices will be that of the agency.
- Invoices will be received, date stamped and entered in their system.
- The scanned copies will be uploaded to you for authentication only and every invoice should be monitored throughout the life cycle till payment is made.
- Bank and credit card reconciliation should be balanced every month and a certificate must be issued to you in this regard, certifying its authenticity and that all entries made in your cash book tally with the bank statements.
This is crucial for preventing fraudulent transactions.
3. Submission of updated reports
You should focus on this for long-term benefits. Deals in the real estate sector are made at a moment’s notice and you should have the details of the state of your finances at all times for optimized decision making.
The accounting service must provide you current reports, almost on a real-time basis on all the accounting parameters quickly whenever required.
4. Evaluate the Software used by the agency
This is very crucial to ensure seamless integration between the systems of the accounting services and yours. Top outsourcing companies generally rely on QuickBooks, Netsuite, Xero, Sage and Quicken. Each has its own specific advantages, and you should make a detailed analysis in consultation with the agency’s executives to work out what will suit you the most.
Keep in mind one factor; you should have access to your accounts on the go, even from remote locations on your Internet-enabled devices. The software so chosen should match your operating system. An example is Quicken which is compatible with both Windows and Mac versions.
5. Check data security measures
There can be nothing greater than ensuring the security of your data and the confidentiality of your account’s position. Not doing so endangers your whole business operations. The real estate industry survives on cutthroat practices and commercial espionage cannot be ever ruled out. Insert strict security clauses in the contract and have penal provisions factored in for the breach in security or if data is hacked.
There are other such points each unique to individual settings. These are some that cut across the industry and are applicable to all. And lastly, don’t opt for companies that offer rock-bottom rates. Their quality of output might be suspect.
One of the top companies that you can definitely rely on to outsource real estate accounting services is Cogneesol. Our expert team of accountants is reputed for delivering quality and consistent results. For more details, contact us at [email protected] or call us at +16466882821.
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