KriyaGo - Blog #back-office accounting

6 Reasons To Outsource Your Back Office Accounting

Wed, 01 Sep 2021 09:00:00 -0400

The real estate industry deals with a large number of transactions every day. In 2020 alone, 5.64 million existing homes were sold in the US. These transactions also vary in magnitude from huge property investments to small maintenance expenditures. That’s why accounting and bookkeeping play a major role in real estate.

As a property manager, producing accurate financial reports and maintaining internal records are top accounting priorities. Most of these real estate accounting functions can be effectively outsourced to experienced service providers. Apart from the cost and time benefits, we list the top reasons why you need to outsource your real estate accounting.

Issues with hiring an internal accountant

Today, more companies are outsourcing their accounting and bookkeeping services. And that’s because they find it more convenient and cost-effective.

Even though hiring an internal team is an option, companies can face significant issues such as:

Real estate businesses need reliable accounting to deal with continuous transactions. With an in-house team, financial tasks can suffer due to leaves, absences, and staff turnover. According to a 2021 report by Inc., 52% of employees plan to look for a new job this year, leading to a mass employee turnover.

Training and inducting new hires can be expensive. An ATD report says that employers spend an average of 33.5 working hours and 1252 USD to train new employees.

Hiring in-house accountants increases your risk of employee fraud. In a survey by ACFE, more than three-fourths of occupational frauds were conducted by employees in key departments like accounting.

Outsourcing property accounting is one of the best ways to deal with these issues. It is reliable, cost-effective, and more secure. Among the companies that outsource, 78% report being happy about the results. If you are still skeptical about outsourcing real estate accounting, then here are the top reasons why you need to do so.

Acquisition of expertise

Any financial service heavily relies on accuracy. For property accounting, your data needs to be handled by skilled accountants. According to experts who spoke to The Ladders, the lack of quality candidates is one of the top challenges of hiring an in-house employee.

Instead, you can hire experts for your accounting needs through outsourcing.

Service providers focusing on real estate have trained and experienced accountants that can handle your work. They also often work in teams which helps you surpass any time and financial constraints. Since they are already trained, the cost of hiring is also much lower than that of an internal accounting team.

Mitigate risk

The real estate industry makes an attractive target for scammers and hackers due to the large number of financial transactions involved. According to Perimeter 81, one out of three real estate companies has faced a cybersecurity attack. But half of them reported not being prepared to deal with the attack. This is due to inadequate steps taken by the company to manage its financial data.

Outsourcing companies understand the sensitivity of such information and set up their own security measures to protect client data. Moreover, the risks of internal fraud are also significantly reduced by outsourcing.

Versatile services

Real estate back-office accounting requires different services such as payroll management, financial planning, and budgeting. In-house teams consist of one or two employees who specialize in limited services. Handling tasks outside their specialization leads to the compromised work quality.

Hiring an outsourcing company gives you access to a variety of services. Instead of one person doing all the work, outsourcing companies have dedicated staff for each service. Companies like KriyaGo have expert resources that not only handle your accounting but also provide guidance to improve your business.

Pain-free tax season

Well-planned tax deductions save a significant amount of real estate revenue. This involves a thorough knowledge of tax laws and filing for the right deductions. To avail of the benefits, you also need to organize your bookkeeping and have the necessary paperwork.

Outsourcing makes your tax season hassle-free. It lets you hire industry experts who specialize in real estate tax. They can help you with bookkeeping, reconciliation, audits and also advise you on the best practices to save more on tax. They also ensure compliance with tax laws and keep you away from legal hassles.

Latest technology infrastructure

Real estate technology has made complex accounting problems easier and more accurate. But investing in these technologies is usually too expensive for property management companies, considering it is a non-core function. Access to such technology is an added advantage of outsourcing.

For example, a survey by Xero shows that businesses that use cloud accounting get five times more customers than businesses that do not. By outsourcing to a company that uses cloud accounting technology, you can effectively improve your real estate business. Along with numerous other benefits, you also leverage technology at a fraction of the cost.

Portfolio-specific experience

Real estate business involves portfolios that require different methods of accounting. For example, multifamily accounting deals with CAM reconciliations which are usually not required for single-family homes. They are also governed by different rules and regulations.

Outsourcing companies have experience handling a variety of portfolios. They know the different financial laws and can assist you better in your particular industry. This ensures your accounts are always up to date and accurate.

Partner with KriyaGo for accurate back office accounting services

KriyaGo provides back-office accounting services to real estate companies. We understand the complexity of managing real estate accounts and aim to build an efficient back-office strategy for our clients.

Our expert team combined with the latest technology can provide you with the right accounting solutions. We focus on giving the most efficient and accurate service based on client requirements. Our cost-effective services help clients channel their time and money into other core activities.

With an experienced team of knowledgeable accountants, we help our clients make well-planned financial decisions and achieve business goals. We also value accuracy and give you better control over your outsourced processes.

Book a free consultation with KriyaGo to leverage our back-office accounting services!

Outsourcing During Pandemic: What You Need To Know

Thu, 26 Aug 2021 13:30:00 -0400

The Covid-19 pandemic brought unprecedented changes to every global industry--including real estate. Companies are making up for the lost time by rethinking their work strategy. As more employees have started working remotely, property managers are also considering outsourcing.

Outsourcing is not new to the real estate industry. But the pandemic has brought a surge in the number of companies that outsource. As the industry recovers from the pandemic, learn more about how you can leverage outsourcing to improve your business.

Prepare for employee turnover

According to Forbes, the year 2021 will see massive employee turnovers across industries. Many pandemic-induced factors are influencing people to resign from their current jobs. Some want to move closer to their homes while others are seeking new opportunities. In any case, high staff turnover negatively impacts businesses. Outsourcing can effectively help companies deal with employee exit and its impacts.

Employee turnover problems--such as increased training costs--can be easily solved through outsourcing. Troy Norberg, the General Manager of Tru-Serve Inc. says that building managers underestimate the true cost of employee turnover when considering outsourcing costs.

As a property manager, you can reduce the significant costs of training a new hire through outsourcing. Service providers have relevant resources and technology to provide quality services. Outsourcing also gives you access to a larger talent pool, saving you the cost and time of training new hires.

In addition, Morph Networks says outsourcing can increase employee retention and lead to higher client satisfaction. Outsourcing some of your services decreases the workload on your employees. During a stressful situation, better workflow management can keep your staff motivated.

Resolve immediate issues

Many businesses found it difficult to cope with the sudden changes due to the pandemic. A survey by BCG found that 78% of the respondents faced operational challenges in 2020. Even in 2021, companies that can’t facilitate remote work still face problems.

For small organizations, the cost of remote work can be a significant issue. They have to either provide the right equipment to the employees or offer a reimbursement--both of which can be expensive. If a company cannot facilitate remote work to all its employees, a better option is to outsource.

Outsourcing companies have the necessary infrastructure to deal with any volume of work. Property management companies only need to pay for the services without worrying about investing in costly software.

Speed-up digital adoption

Another change caused by the pandemic is an increase in technology adoption. Companies increased their budget for IT outsourcing from 12.7% in 2019 to 13.6% in 2020. The inevitability of remote work plays a huge factor in the increasing demand for technology.

As a property manager, you can fulfill this sudden tech requirement by outsourcing. Apart from the obvious cost benefits, outsourcing IT requirements also gives you access to state-of-art technology and relevant resources. Service providers also have a well-trained staff that can handle different technology requirements.

For example, real estate businesses might need customized software. Service providers can integrate several tools to build the right technology for such businesses. This is better than using more than one software for the same processes.

Outsource with new objective

While cost reduction remains the top reason to outsource, you need to set new objectives to adapt to the post-pandemic market.

For starters, your outsourcing strategy needs to be more focused on quality over quantity. Earlier, companies outsourced tasks that could not be handled by their internal team. But now, the focus of outsourcing has changed as it has become a necessity and not an option. As a result, more and more companies are prioritizing quality and customization over the amount of work outsourced.

When you are hiring a service provider, understand how the provider adds value to your company. Do they have expertise in your industry? Does their staff have sufficient experience? Since most of the tasks are handled through outsourcing, your service provider becomes an integral part of your business.

You also need to focus on outsourcing for business continuity. A business continuity plan helps companies recover from disruptive events such as the pandemic. By planning your outsourcing accordingly, you can keep your business running even in case of an unplanned shutdown.

Look beyond physical proximity

Before the pandemic, companies believed that physical proximity was important to get tasks done effectively. Post-pandemic, many organizations found that distance did not affect their productivity at all. A recent report by Deloitte ranked “lack of in-person management” as the greatest challenge of remote work. This issue is not significant when compared to the numerous benefits of outsourcing.

Outsourcing is an excellent way to leverage expertise from all over the world. By offshoring, you can reduce the total costs without compromising on the quality of the service.

Build a co-sourcing strategy

For better productivity, you need to decide which tasks are best handled internally and which tasks need to be outsourced. An excellent work management strategy is co-sourcing. Co-sourcing lets your internal team and outsourcing company work together to achieve business goals. Your team is aligned with your business strategy whereas the service provider adds valuable resources to your team.

Outsource more services

In the real estate industry, you don’t need to limit your outsourcing to IT and back-office accounting. The post-pandemic world is a perfect time to outsource more services such as CAM reconciliations and lease abstractions. This gives your business scope for more development while allowing your team to focus on more important tasks.

Outsource your property management functions to KriyaGo

KriyaGo’s core focus is helping clients manage their real estate businesses. We provide outsourcing services for different tasks like back-office accounting, lease abstractions, and CAM reconciliations. We also integrate various property management software to build a custom platform for your business.

Our team of experts can help you create the right outsourcing strategy. We work with you to understand your requirements and suggest solutions accordingly. By outsourcing to KriyaGo, you can leverage the best platforms and resources in the industry.

Book a free consultation call with a KriyaGo Advisor to get started with real estate outsourcing!