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How to Resolve Issues of Accounting for Real Estate Firms?
Accounting is an integral part of every business. It is essential for keeping the monetary records of the firm and helping the higher management in strategizing for the future. In a real estate business, the key functions are obviously marketing and customer relationship management. Accounting for real estate owners is important as a lot of transactions and huge costs are involved in it. In such a scenario, outsourcing is the best option.
In order to maximize their profitability and making their business operations more efficient, the real estate agencies must concentrate totally on the core competencies. They also need to reduce their operational expenditure and enhance their customer service.
Accounting Problems Faced by Real Estate Owners:
The Wrong Classification of Costs – In a real estate business, there are a variety of costs which must be properly classified to ensure the maintenance of proper financial records. Generally, this factor is ignored.
Non Segregation of Back Accounts – Some business owners make the mistake of keeping the same accounts for personal and business purpose. This makes an evaluation of profits and expenses difficult.
Improper Employee Grouping – In a retail business, there are various departments, so information related to employees belonging to different departments must be kept separate. But mistakes in this regard are made.
Poor Record Maintenance – The storage and maintenance of records is also an issue. The records have to be maintained at regular intervals of time and have to be stored in a safe place. Real estate accounting services helps in creating a scalable working environment and dealing with the various challenges.
Benefits of Outsourcing Real Estate Accounting Services
Access to a Variety of Accounting Services
The third-party firms are capable of handling a variety of operations like accounting for distributions, GL & budget reconciliation, month-end closing and reporting, bank and mortgage reconciliations, statement of cash flows, payroll administrative services, income tax returns etc.
Access to Back Office Services
Generally the real estate companies, find it difficult to manage their back-office activities. The outsourcing firms offer a variety of accounting back-office services like developing and managing EFS, development, and management of total quality management systems, electronic voucher payment systems, processing a move-out, consultations related to litigation, developing and documenting procedures, correcting property entries, data management and data entry etc.
Most of the outsourcing firms which offer accounting services to real estate firms are mostly based in developing nations like India, so charge a nominal remuneration in comparison to wage rates in developing nations.
So by using the outsourcing option, a lot of funds can be saved. Moreover, it also eliminates the need for offering infrastructure and spending on the payroll.
Helps in Saving Valuable Time
Outsourcing eliminates the need for hiring staff for accounting functions. This helps in saving a lot of time as you don’t require going through the recruitment process. You also don’t require overseeing the work of employees on a daily basis. All the time saved can be utilized on the main activities of the organization.
Access to Latest Technology and Capable Staff
The outsourcing firms have access to the latest software and have staff fully trained in using them. The staff of the outsourcing firms is fully accomplished in the latest methods and remains in touch with the changes in the industry.
The above-mentioned information can help the real estate firms in considering accounting for the real estate industry.
Cogneesol has emerged as one of the top providers of real estate accounting services to clients from all over the world. In the last eight years, it has earned the immense goodwill from its clients. The services are intended towards helping the clients in maximizing their profitability, reducing operational expenses, gaining an edge over competitors.
To get more information, contact us at [email protected] or call us at +1 (646) 688-2821.
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