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Accounting plays an important role in every business, but in real estate, it’s particularly important. Accurate accounting enables real estate investors to accurately track the performance of their portfolio and focus on profitability. In an environment where property values are constantly in flux, tax rates change, and interest rates vary, having this certainty is vital to success.
Effectively managing a property portfolio and maximizing its value requires investors to have access to accounting services throughout the year, not just during tax season. For many real estate investors, outsourced accounting services provide the critical information required to keep your financial statements up-to-date. Only with accurate financial data can you make informed decisions that enable you to grow your portfolio over time.
While you might appreciate the importance of accounting, it’s an area of your real estate business that can be easy to overlook. Unless you’re an accountant yourself, it’s unlikely that tasks like reconciling your bank accounts or producing balance sheets get you excited.
Instead of trying to squeeze one more task into their already packed schedule, many investors are embracing the value of outsourced accounting services. But what is outsourced accounting, and how do the services it provides differ from traditional bookkeeping? Let’s dive deeper and explore what accounting services can do for your real estate business.
Why Should You Outsource Your Real Estate Accounting?
Outsourced accounting, also known as Client Accounting Services, means hiring an outside firm to handle your accounting needs. Offloading these tasks to an experienced professional offers several advantages, including:
- Saves time and money: with outsourced accounting, you free valuable time in the day to focus on more pressing business concerns like identifying your next acquisition. Entrusting your accounting to a team of experienced professionals also eliminates costly errors, saving you money.
- No need to hire an internal team: staffing an internal accounting team requires your time, money, and leadership. Outsourcing helps you avoid tasks like recruiting accounting employees and running payroll every month, keeping your investing activities as streamlined as possible.
- Get access to the industry’s best practices: various elements of the real estate industry––from the tax code to lender requirements––change and evolve rapidly. Working with specialized outsourced accountants ensures you never miss a beat and helps expose you to best practices used by other real estate professionals.
- Receive sound financial advice from trusted professionals: even the savviest real estate investors look to others for guidance sometimes. Having a trusted professional you can turn to for advice provides the clarity to move forward confidently with your decisions.
Which Accounting Tasks Can Be Outsourced?
After deciding that hiring an outsourced accounting services provider makes sense, it’s natural to start thinking about which tasks you’ll want to offload. Fortunately, you can outsource almost every accounting-related task to the new team. The tasks that can be outsourced can be grouped into three distinct categories: bookkeeping, accounting, and CFO services.
Let’s take a closer look at which tasks you can outsource in each of these categories.
Bookkeeping
Managing a growing portfolio often makes it necessary for real estate investors to hire a bookkeeper. While not the most expensive position to staff, every employee you have working for represents costs both your time and your money.
Outsourcing your bookkeeping offers greater value as it streamlines costs while still providing detailed financial data.
Accounting and Controller Services
In most businesses, controllers are qualified CPAs who handle daily financial operations. Managing bookkeepers, reconciling financial accounts, and creating quarterly reports are some of the typical duties these professionals perform.
When outsourced, your new accounting team will handle nearly all of these duties, eliminating the need for you to hire a full-time accountant in-house.
Learn more: What Is An Outsourced Controller?
Chief Financial Officer Services
Unless you control a real estate empire with hundreds of properties, it’s likely that bringing in a full-time CFO doesn’t make financial sense for your business. But even though you don’t need a full-time CFO, you still need someone capable of tackling the critical tasks associated with this position.
An outsourced CFO will capably perform tasks like forecasting and reviewing budgets while offering the flexibility to expand or shrink their role as business demands.
Hall CPA: Outsourced Accounting for Real Estate Investors
Ready to explore hiring an outsourced accounting firm to help you manage your real estate business more effectively? Hall CPA is here to help through our outsourced accounting services practice. Here’s a quick look at what you can expect when you work with us:
Step 1: Setting Up Your Accounting System
Our process begins by setting up a digital-first accounting system that makes it easy for you to get a real-time snapshot of how your properties are performing. This phase includes:
- Kick-off call: our accounting advisors will learn more about your business, preferred timeline, and stated goals during this initial meeting.
- QuickBooks Online Onboarding: our team will work with you to set up a QuickBooks Online (QBO) accounting system that’s customized to the unique needs of your portfolio––whether you own short term rental properties or buy-and-hold.
- Training and System Implementation: depending on whether you want to run things yourself or outsource everything to our team, we’ll show you how to manage your QBO accounting system on an ongoing basis.
Step 2: Maintaining Your Accounting System
After implementing our system, you can select the level of involvement Hall CPA has in your daily accounting operations.
- DIY: we turn the accounting system over to you and your team. If you choose to go this route, consider attending our real estate accounting boot camp and joining our Tax Smart Investors program to make sure you’re following best practices.
- Financial Bookkeeping Coaching: You’ll manage the books with ongoing training and support from Hall CPA to ensure you have the tools for continued success.
- Outsourced Accounting Services: at this level, Hall CPA handles all of your accounting needs and provides services. This includes:
- Maintaining accurate financial records so you always have an up-to-date understanding of your financial standing.
- Reconciliation of all financial accounts to ensure accuracy and transparency.
- Generating monthly financial statements, such as P/L Statements, Balance Sheets, and General Ledger.
- Ongoing accounting advisory services, so you always have the information required to make informed financial decisions.
Outsource Your Real Estate Accounting Today
To operate a successful real estate business it’s important to have an accurate understanding of how various properties across your portfolio are performing. By outsourcing your accounting needs, you can make sure this information is at your fingertips at all times.
At Hall CPA, we’re ready to provide your real estate business with expert accounting services that will help it thrive.
Interested in learning more? Schedule a consultation with our team today.