KriyaGo - Blog #back office operations

How Remote Work Transformed the Back Office Since the Pandemic

Thu, 24 Feb 2022 09:00:00 -0500

COVID-19 disrupted business operations across industries last year. A massive number of people lost their jobs while others had to shift to working from home.

However, all of us imagined this setup to continue for the short term. Nobody knew we would have to stay out of the office for more than one and a half years.

Even now, the omicron variant is creating fears across the world. We may have to extend our working from home timelines for a few more months.

In addition, 73% of employees want to enjoy remote working options even when things get normal. Does that mean work from here is to stay?

Will processes like back office still have to be managed from living rooms?

The Impact of the Pandemic on Back Office

The coronavirus changed many business processes and working conditions. However, most of the focus remained on the client-side teams that deal with customer interaction.

Yet, the back office is a vital foundation that impacts the overall productivity of the company. This department handles crucial processes that support the day-to-day operations.

The employees in the back office also work in moderate close physical proximity. Therefore, the risks of spreading the virus were ever-present.

As a result, companies were forced to allow employees to work from home. Additionally, a team of few people visited the office occasionally to manage the paper processes.

Somehow, businesses were able to perform back office duties without giving it a hard thought.

The Transformation of the Back Office

People began to realize that the pandemic was going to stay as 2020 rolled by. Companies started realizing they had to plan for the long-term to sustain themselves and be competitive.

As a result, we saw a different approach to working with a focus on remote work. Companies began to set up secure home offices for their employees and even offered incentives to work from home.

Therefore, the back office went through a massive transformation. It was in line with the findings of McKinsey that predict the greatest transformations for jobs involving physical proximity.

How was the back office able to achieve this feat?

Elimination of Paper Processes

A majority of businesses, including real estate, were still relying on paper processes before the pandemic. It needed employees to manually collect, sort, and manage documents and files.

Let’s take the example of the accounts payable (AP) process handled by the back office. You have your invoices arriving by mail that need sorting. Then, you need to add the invoices to your accounting systems and verify information manually.

Some businesses rely on a property management tool but still handle some paper processes. In addition, making payments also included manual paper processes.

You have to write your checks, put them in envelopes, and mail them.

Fortunately, the back office teams were able to streamline and reduce paper processes. They worked hard to replace paper spreadsheets with cloud solutions that allowed access on the go.

As a result, suppliers could upload invoices directly or submit them through emails. Additionally, they integrated their disparate tools to create a single source of truth.

It eliminated duplicate entries and errors to improve data accuracy. 

Adoption of Seamless Payments

Global spending patterns have been undergoing a change for the past few years. The growth in eCommerce and digital wallets are pushing more people to shift to cashless payments methods.

As per McKinsey, non-cash transactions increased by 6% between 2019 and 2020. Therefore, businesses are also adopting faster and more seamless ways to pay instead of relying on checks.

Data from Nacha also back up the trends in B2B payments. The ACH network experienced massive growth in payments last year that amounted to a total of $26.8 billion.

In addition, B2B payments themselves grew by 11%, reaching 4.4 billion.

The support from Nacha and other services allowed back offices to pay on time. This was an important step to maintain vendor relationships and ensure business continuity when supply chains were falling apart.

Focus on Automation

The pandemic expedited the digital transformation initiatives businesses planned for the long term. Companies invested heavily in automation to conserve resources and achieve operational efficiency.

Back offices also joined the list and adopted digital ways to do business. The technologies that came in handy the most include robotic process automation, artificial intelligence, and virtual assistants.

Let’s take the example of AP to illustrate what we mean. Many real estate agencies started using expense management tools last year to reduce manual AP processes.

For instance, such a tool can allow the automation of receipt management. In addition, they can eliminate the need for manual data entry or even collecting receipts.

Anyone can upload invoices on the platform, even from outside the office. In addition, you can interlink your tool with your accounting software to close your books automatically.

Best of all, it may even help you save 30% of your operational costs, according to Gartner.

It is a big event that real estate agencies were able to automate vital back office processes. It allowed them to achieve a task they have been waiting to do for many years.

Moreover, the process ensured employees could work from home to limit the spread of the virus. Additionally, the back office could keep providing the support it needed to conduct business operations.

Virtual Meetings for Optimum Collaboration

Video conferencing is not a new thing. Businesses have been relying on this technique to connect minds and collaborate across borders for many years.

As a result, the shift to remote meetings was not so hard on the back office staff. Most of them were already used to apps like Skype to keep in touch with their friends.

So, they could easily adapt to collaborating on Zoom instead of around the table.

Final Thoughts

Remote working is becoming a new norm across industries. Departments like back offices are also doing their best to adapt and excel. The big part of the task is already over and remote working is producing productive results. From here, we need to keep working for a streamlined and more efficient future for the back office.

Real Estate Back Office Accounting: Top Mistakes to Avoid

Fri, 18 Feb 2022 15:00:00 -0500

Most real estate agencies rely on their back offices for day-to-day accounting. The list of tasks covers a wide range of verticals, from vendor payments to employee reimbursements.

As a result, the back office requires considerable resources and hours to do its job efficiently.

However, most real estate’s back office accounting is in a mess. The department is riddled with inefficient processes and workflows that take a toll on productivity.

Therefore, you need to be aware of the top back office accounting mistakes that can haunt your agency. Below, you will find the most applicable mistakes that modern real estate back offices make.

Relying on Manual Data Entry

Back office accounting in any industry involves dealing with a lot of data. Unfortunately, real estate agencies are still using paper processes or spreadsheets for the process.

As a result, they have to deal with huge volumes of manual data entry that take a painstakingly long time.

In addition, manual data entry leads to errors. Research shows the probability of human error is 18% to 40% while recording data into a simple spreadsheet.

For complex data spreadsheets, the probability jumps to 100%.

It is not easy to rule out manual data entry so easily. However, brokers should make an effort to automate as much of the process as possible.

For example, integrating your existing tools can be an excellent way to automate data entry. You can capture invoices from your property management tool and have the data recorded in your accounting software automatically.

The process saves time and improves data accuracy. Additionally, you can look forward to a boost in productivity.

Not Giving Up Manual Accounting Processes

This is a continuation of the mistake we discussed above. 63% of businesses today still work with spreadsheets and manual accounting processes.

Needless to say, the consequences are more than the risk of human errors. The list of dangers includes wastage of time, money, and resources.

In addition, it increases the potential for fraud and invites financial risks. Moreover, you can expect your audits to get more complex and expensive.

Worst of all, you will experience a massive challenge to scale your manual accounting processes. As a result, it may even restrict your business growth.

The need of the hour is to digitize your accounting processes. Choose the right tools that align with your needs and help you achieve your business objectives.

Then you can enjoy a hands-off approach for back office accounting tasks like matching invoices or bank reconciliations.

Accounting at the End of the Month

Most real estate agencies will wait till the end of the month to complete accounting. Most probably your back office staff will spend the last day of the month reconciling expenses and matching books.

This approach may get the job done but is not ideal if you want to operate efficiently.

Waiting till the end of the month to do your back office accounting lowers your financial visibility. You cannot be sure of your cash flow or where your money is going.

Therefore, you cannot make accurate financial predictions and risk losing out to the competition.

As a result, you should aim for real-time accounting. Record your debits or credits as they happen so that you have complete visibility into your financial position.

You can also use a wide array of tools like a spend management solution to facilitate real-time accounting.

Not Analyzing your Financial Data

As noted earlier, real estate back office accounting manages a huge volume of financial data. The information may include vendor payments, SaaS expenses, wages, cost of services, and more.

However, most businesses don’t utilize or make the most of this data. They don’t use it for financial analyses to cut costs or maximize value from their procurement.

As a result, they miss out on wonderful opportunities to improve profitability or their bottom line.

Therefore, analyze your accounting data periodically to sport patterns and trends. You can then assimilate your findings to generate vital insights.

Many accounting or spend management tools come with advanced analytics. They provide readymade insights for you to leverage. You can also customize your solution to track specific data and make more informed financial decisions.

The returns are guaranteed, as data-driven businesses are 3-times more likely to experience improvements in decision-making.

Not Making Timely Payments

The real estate industry works with a wide range of stakeholders. Construction companies, security agencies, software vendors, material suppliers – the list is almost endless.

Undoubtedly, your stakeholders impact the performance of your business and productivity. For example, strained relationships with a supplier might affect your supply chain and delay your time to market.

In this regard, most real estate back offices struggle with payment processing. The staff often has too much to handle and not enough resources to work efficiently.

As a result, late payments are common in real estate. Most agencies fail to pay their suppliers or vendors on time, risking the business relationship.

Therefore, make an effort to make timely payments and aim for real-time payment processing. You can rely on a digital solution to automate the process and boost productivity.

Working with Poor Talent

Back office accounting comes as an afterthought to many brokers. As a result, they don’t hire the right talent for their daily bookkeeping.

They want to save costs and work with a skeleton staff to just get the job done.

Needless to say, such an approach means more risks for your business. You can never be sure of the accuracy of your financial records and reports.

In addition, you will miss out on the skills of an expert accountant that hampers your accounting processes.

Therefore, never compromise on skills and experience.

Final Thoughts

Back office accounting can be a challenging task to handle. It may be a better decision to outsource your accounting needs to a reliable partner like KriyaGo. We have the best team of bookkeepers and certified accountants to make a difference. Our team will take care of your day-to-day accounting and provide solid guidance to gain a competitive edge. Contact us today to know more.

Back Office Accounting and Common Misconceptions

Fri, 04 Feb 2022 12:34:34 -0500

An efficient back office is behind every successful company. It has a big impact on your business operations and how well you can achieve your objectives.

As a result, it is necessary to give a hard look at your back office operations. It is more important than you think and decides your performance, irrespective of the industry.

Today, we will explore top back office accounting misconceptions that are holding back your growth. Let’s start with a basic myth that many entrepreneurs still entertain.

Back Office Equals to Data Entry

Many people confuse back office responsibilities with data entry. However, that is a big mistake.

Data entry refers to entering data into computer systems. It is also possible to automate the process using a range of technologies.

The back office, on the other hand, is a whole department. There are several roles tied with vital responsibilities like:

Handling calls and emails from tenants
Coordinate with contractors for maintenance tasks

Manage documents relates to leases, tenants, insurance claims
Maintaining accounts, preparing financial reports, preparing taxes

Therefore, back office operations are more expansive than data entry. They support your day-to-day activities and form the backbone of your company.

All I Need is Accounting Software

50% of businesses today rely on accounting software to balance their books. However, can you run your whole back office with just an accounting tool?

Some realtors may feel their accounting solution is enough to manage back office accounting. However, that is not the right way to think if you want to achieve business growth.

Accounting software helps streamline the tasks of your back office accountants. It is also ideal to automate repetitive tasks and boost productivity.

But sadly, an accounting tool cannot replace your back office accounting processes. They will always need human judgment and analysis for tasks like:

Interpreting numbers and making sense of them
Identifying opportunities for cost savings

Implementing accounting best practices
Conducting risk analysis
Forecasting

As a result, you will always need humans to run your back office. However, the duties they handle will vary based on your industry and business size.

Back Office Operations are Really Simple

Many entrepreneurs make the mistake of oversimplifying back office duties. Sure, your back office processes can seem simple if you have a small real estate agency. You may even be able to handle all your operations with a few people.

However, that is not the reality, especially for big businesses.

For example, the back office generally handles payroll calculations and taxes. The process may seem straightforward but has endless hidden nuances.

Did you know the IRS penalizes 1 out of 3 businesses annually for payroll errors?

To avoid such penalties you have to consider several factors like:

State and federal labor laws
Pay schedules
Minimum hourly wages
Overtime rates

In addition, you need to maintain comprehensive payroll records to comply with IRS regulations.

Therefore, back office operations are more complex than you think. You need the right expertise and skills to ensure you can run your back office efficiently.

For this reason, many entrepreneurs choose to outsource their back office processes.

Back Office Accounting is Expensive

There is a general misconception that accountants are expensive. The same notion exists in many real estate agents who view back office accounting as a costly affair.

However, it is up to you how you look at things.

Back office accounting can cost money but also provide more than adequate returns. Moreover, an efficient back office can help you cut costs and optimize value from every vendor.

Consequently, inefficient back offices can incur more costs than you can imagine. Fortune 500 companies lose out $480 billion each year due to back office inefficiencies.

Therefore, your back office operations impact your profitability directly. You have to spend a bit of money to ensure you can run your back office accounting like a pro.

Paper-Based Back Office Accounting Saves Money

Your back office is in charge of processing invoices and disbursements. They may also handle claims from employees and reimbursements.

Unfortunately, many real estate agencies still rely on a paper process to manage invoices. They don’t want to invest in technology for fear of cost.

However, that can be a sad mistake.

Research shows it takes around $12.90 to process one paper invoice. Now, think about the cost if you process dozens or even hundreds of invoices every month?

In addition, think of the possibility of manual errors and the cost of rectification. By the end of the year, the whole process can add thousands of dollars to your expenses.

Instead, a better choice is to use technology to manage and automate your paper processes. You will be able to reduce inefficiencies, speed up processing, and save more.

Plus, your back office will have more free hours to conduct market research and support front-line operations.

You Should Not Outsource Back Office Accounting

Outsourcing your business processes can have a remarkable impact on your bottom line. Yet, many realtors are afraid to outsource their back office processes as they fear:

Losing out on control
Compromising confidentiality of data

Barriers in communication
Hidden costs and terms
Delays

However, these concerns do not have any solid ground. Many businesses are enjoying more freedom and optimum returns by outsourcing back office operations.

In fact, accounting is one of the most common businesses processes to be outsourced. Its market size is predicted to grow from $36.9 billion in 2020 to $51.5 billion by 2027.

Therefore, real estate agencies can outsource back office accounting without any concern. They will be able to improve efficiency and get more free time to focus on growing their business.

Final Thoughts

The back office is a crucial part of every business. You cannot hope to run your business and earn a profit without the support of the back office. As a result, it is necessary to have the right information that helps you optimize your back office processes. In addition, real estate agencies can outsource their back office accounting to reputed partners like KriyaGo. Contact us to know how we can help.