Should You Outsource your Real Estate Accounting?
So, the question becomes: should you outsource your real estate accounting? Here are some items to consider when deciding.
Real Estate Accounting is a Specialty
Without exactly the right expertise, minor errors can creep into your accounting and cause your books to be inaccurate. Inefficiencies can mean you don’t have the information readily available when you need it. Lack of information can lead to bad decisions.
You are an agent or an investor. Your expertise is in real estate and not in accounting. You can hire an in-house accountant, but unless you are a high-volume firm, you will likely end up paying a lot more overhead than is prudent. By outsourcing your accounting, you can gain the services of an accounting expert and only contract for the time you need.
Portfolios Are Challenging
Real estate values don’t always remain the same. Fluctuating values make investing fun and lucrative for investors, but these fluctuations are less fun for those people who need to be sure your books always show the correct values. Someone who isn’t an expert in real estate accounting can quickly become overwhelmed by these fluctuations. However, a real estate virtual assistant will be accustomed to the changes and know how to keep your accounting up to date amid the fluctuations.
Compliance Issues Can Be a Drain
State, federal, and local regulations can significantly impact your business, especially if you’re not a compliance expert. If you or your staff make a mistake and fail to meet a regulation, you’ll end up paying a hefty fine. Compliance issues are one of the key reasons for outsourcing, according to Forbes. By outsourcing, you can ensure compliance without having to spend an excessive amount of your own time on the issue.
Virtual Accountants Can Improve Processes
Real estate virtual accountants will have a good understanding of available accounting technology. They can recommend and implement solutions that will automate processes, increase productivity, lower risk, and increase your bottom line. For example, they can implement cloud-based apps that automate all the repetitive operations. Someone who isn’t an expert in accounting technology, such as an investor or agent, doesn’t know enough to implement these solutions. You actually could end up saving money, even when you consider the cost of outsourcing, because of the process improvements.
Outsourcing Helps You Scale
Business fluctuates, which means sometimes you’ll need more accounting help than at other times. Outsourcing allows you to scale to meet demand without carrying overhead when you don’t need to. Outsourcing also allows you to avoid the time required to hire and screen accounting applicants, and then train them in your real estate business.
In today’s labor shortages, real estate outsourcing becomes even more critical to ensure you’ll have the staff you need. An outsourcing firm will have accountants on staff; you won’t have to enter compensation wars to attract one.
Outsourcing Helps With Controls
Outsourcing your accounting to a real estate virtual assistant also helps you initiate better financial controls. Controls lessen risk, including the risk of fraud. Outsourcing also means that fewer people handle cash receipts, and it allows for quicker reconciliation of cash accounts, which further lessens loss risks.
Outsourcing Frees Up Your Time
Chances are you didn’t choose the real estate business because you loved overseeing the details of accounting and bookkeeping. Outsourcing your real estate accounting frees up your time. Instead of either doing your bookkeeping yourself or hiring and supervising a staff member to do it, you can spend your time doing those things you enjoy. When you spend time doing what you enjoy, your happiness will be evident to all you meet, and your business will become more profitable. You’ll also find that you have a life outside your company. You’ll be able to see family and friends more often and, perhaps, even take up a hobby. Yet, your books and business will be in better shape.
Outsourcing Can Save Money
In addition to paving the way for you to grow your business, outsourcing your real estate accounting can often save you a lot of money. Outsourcing to the Philippines is one example. The cost of living in the Philippines is considerably lower than in the United States, Australia, or New Zealand, so real estate virtual assistants receive a much lower wage in the Philippines. However, workers in the Philippines have a good work ethic and are keen to work with businesses in these countries.