Why Real Estate Investors Should Outsource Accounting

Stick to what you do best at the frontline while letting an expert organize your numbers

As a real estate professional, outsourced accounting is usually the last thing on your mind—until tax season rolls around and you have to scramble for the numbers. Not many people in the real estate and property management industry enjoy accounting, and many people don’t even know where to start with it (If that sounds like you, it’s okay; you are definitely not alone).

There are tons of gears and cogs associated with running a real estate company, and many times, you are the one making sure they turn. Accounting is a big gear in any business, but let’s be honest: you’re probably not an expert, and there’s a good chance you’ve made an error in the books more than once.

That is precisely the reason why so many people are starting to outsource the accounting sector of their business. There are far more advantages than disadvantages to outsource accounting for small businesses, and the proof is in the pudding.

What is outsourcing, anyway?

According to Merriam-Webster, to outsource is “to procure (something, such as some goods or services needed by a business or organization) from outside sources and especially from foreign or nonunion suppliers; to contract for work, jobs, etc., to be done by outside or foreign workers.”

In layman’s terms, this just means to hire somebody outside of your company to complete tasks or jobs for you. If you outsource your accounting services, you will basically be hiring an outside accountant or accounting firm.

So why do it?

There are some skeptics who do not see why outsourcing is a good idea. We understand it might sound sketchy, and it can be hard to trust somebody outside of your company. However, there are so many benefits:

  • Accounting expertise. Many times, financial departments in small businesses do not have the same expertise that CPAs do. Sometimes it is you, the owner, juggling the numbers, and all you know is what you’ve learned from Google (which, granted, can be a lot). When you outsource, you are paying for somebody who has a diverse, deep understanding of accounting.
  • Niche specialization. So many accountants and firms have niches in different industries. If you search “real estate accounting,” countless results appear on Google. Not only do they have expertise with numbers, but they also understand the nuances of your specific situations.
  • Correct from the beginning. One of the most common we have seen from small businesses is that their financial processes are designed incorrectly from the beginning, and it wreaks havoc down the line. When you outsource, all of your procedures are thoroughly detailed and optimized to make the most of your numbers.
  • Lower overall costs. 100% of the time outsource accounting can cost less than internal staffing outright. However, even if the fees seem like they would be more, think about the costs and risk of the hiring process, overhead cost, and the time and cost it would take to expand your accounting department!
  • Clarifying your numbers. It is easy to put together a financial statement, be proud, and then realize you have no idea what it actually means. Hiring somebody who specializes in accounting not only means that your numbers will be accurate, but also that he or she can explain to you in simplified terms the implications for your business.
  • Stay up-to-date. Finally, when you have somebody whose job is to handle your accounting functions, there is no need for you to play catch-up. Your outsourced accounting should stay up-to-date on all of your financials, and you should be able to get reports in real-time without waiting for internal staff to find time to get it done.

What services can you get from outsourced accounting?

Oftentimes, people underestimate which services they can outsource. Accounting is not just outsourcing the production of financial statements; it is also bookkeeping, controllership, and much more:

  • Bookkeeping
  • Controllership
  • Cost segregation
  • Strategic planning
  • Construction loans
  • Refinancing documents
  • Budgeting and forecasting
  • Bank account reconciliation
  • Managing and planning cash flow
  • Closing or purchasing documents
  • Processing accounts payable and receivable

There are definitely more accounting services you can outsource. Contact us today to find out the services we provide that would best benefit your business!

What are you waiting for?

When you outsource accounting, you actually improve your internal controls since somebody outside of your organization is involved with each of your transactions. On top of that, it is almost impossible to be the pitcher and play the outfield at the same time. When you hire somebody to handle your company’s accounting, you can focus on what you do best: running your company.

Stop stressing about the numbers and contact us to learn how to start outsourcing your accounting!

Gita Faust

About the Author

Gita Faust has over 30 years of accounting experience in the real estate and property management industry, Gita Faust is more than just a real estate investor; she is also popular for her work as an accountant, consultant, mentor, speaker, QuickBooks Top ProAdvisor, QuickBooks Solution Provider, member of Intuit’s Trainer/Writer Network, and, of course, author. Gita is well-known for her exemplary leadership and advisory skills. In fact, she even helped pioneer the adaptation of QuickBooks to suit the needs of professionals in real estate and property management. To share her knowledge she has written a series of courses titled Simplified Accounting Solution, which provides step-by-step guidance for those working with QuickBooks.

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