Gain Financial Advantages with Outsourced Accounting

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Insights from Our Accounting Experts

Although many real estate companies today continue to handle their own accounting in-house, firms that outsource property and fund accounting functions to RealFoundations are reaping significant benefits that can confer a competitive advantage. RealFoundations’ Accounting Services clients are reporting as much as a 40 percent annual reduction in the cost of accounting-related labor. Additionally, they receive more accurate and timely-delivered financial entries and reporting and can leverage their staff accountants for more strategic purposes. These organizations invariably operate with greater efficiency and run their businesses more cost-effectively than with in-house staffing.

Companies usually want to concentrate on adding value to their operations, properties and portfolios versus being burdened by supporting financial administration. Outsourcing some or even all day-to-day and month-end accounting functions to RealFoundations frees up your senior staff to focus and act on the outputs and reporting instead of being saddled with producing the information.

From AP/AR and banking to complete month-end reporting, RF handles it all. Clients can choose from a comprehensive schedule of service options and leave the work to our accounting experts. Our services are scalable for each client’s unique and changing requirements and offer a more streamlined and cost-effective way to support ongoing operations and growth.

 

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What challenges do companies face when they handle accounting in-house?

In recent years, it has become increasingly difficult to find, hire and retain qualified and affordable accounting professionals. Baby Boomers are retiring and there is a limited pool of new, graduating CPAs to fill the gap. The COVID-19 pandemic and “The Great Resignation” likely are exacerbating the problem. Many accountants are leaving their companies for better — more interesting and lucrative – opportunities elsewhere. At the same time, remaining in-house accounting staff generally are over-utilized — they are encumbered with mundane, monotonous tasks and simply don’t have the bandwidth to take on value-added functions. Often a lack of consistency and standardization in accounting processes causes significant problems as does the struggle to get the accounting work done timely (e.g., month-end reporting, bank reconciliations, month-end accruals, etc.). Outsourcing can standardize and measure process consistency and timeliness as that is exactly what we are experts at doing.

 

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How does outsourcing accounting functions help companies run and perform better?

Outsourcing improves organizational performance in important ways. It enables the client to:

• Significantly reduce its in-house accounting staff below the controller level and save substantially on overhead.
• Tap talent, as needed, to manage daily accounting work and also grow the business.
• Redeploy senior accounting professionals to more strategic activities that accelerate company growth such as supporting asset management and asset disposition/acquisition strategies.
• Leverage the managed services firm’s extensive knowledge and expertise in real estate, accounting, technology and leading practices.
• Have greater rigor applied to accounting processes, standardization and performance measurement.
• Complete required, repeatable tasks and functions on time (e.g., monthly closing, invoice approvals and payments, reporting, etc.)

 

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What questions should a company ask regarding the sourcing of its accounting activities?

There are two sets of questions a company should ask. The first set helps determine the need and urgency for outsourcing.

• Do we have high accountant turnover and difficulty replacing and retaining staff?
• Is our cost-of-service delivery internally very high?
• Are we using leading-edge processes and technology solutions for our accounting?
• How well does our current delivery model scale?
• Does our staff have sufficient expertise, especially if we expand to other sectors?
• Are we utilizing our senior staff to their full potential — in ways that meaningfully support company growth?

Once a company decides to outsource, it should ask a second set of questions to identify the best-managed services firm with which to partner:

• How knowledgeable are each of the firms under consideration about all sectors of the real estate industry?
• Which provider has the broadest and deepest expertise in accounting and, more specifically, accounting for real estate enterprises?
• Who has the strongest record of performance and the most impressive referenceable clients?
• Does one firm stand out for its use of leading practices and technology solutions?

 

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Why should an organization retain RealFoundations for managed accounting services?

RealFoundations checks all the boxes. Exclusively focused on the real estate industry, our firm has unmatched experience serving clients in every sector and operating under all ownership structures. We offer a scalable, global team of experts skilled across the spectrum of real estate accounting. RF also has developed powerful proprietary technology to differentiate ourselves in the market — Accounting with r3® and ProcessInsight.

For many clients, investing in property accounting technology is not practical for what is often not considered a core activity. They also do not want to have to maintain, upgrade and support these systems. So, they turn instead to RealFoundations’ Accounting Services, delivered through our r3® BPaaS (Business-Process-as-a-Service) offering. Coupled with our in-depth real estate accounting expertise and robust standardized processes, Accounting with r3 is the go-to solution for clients looking to avoid system costs and internal management overhead. Our solution offers scalability and flexibility for clients’ property portfolios, backed by leading accountants and systems experts.

ProcessInsight is RealFoundations’ proprietary online workflow portal that lets clients manage, track and prioritize accounting processes and tasks without cumbersome Excel schedules and/or voluminous person-to-person email. It allows for easy file sharing, client communications, workflow and task management.

 

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Connect with Us

Contact us to learn how RealFoundations’ Accounting Services can quickly move your real estate business to the next level. Let’s Start the Conversation.

 

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About the Author

Clive Tydeman is the Global Head of Accounting & Lease Services at RealFoundations with 15 years combined experience in providing strategic, financial, business improvement and technology services to clients in the real estate industry. Clive is versed in providing operational, system implementation and change management to the real estate market across a wide range of sectors. He has extensive knowledge of the property management market and has worked with owner occupiers and institutional investors with clients in both EMEA and the U.S.

Before joining RealFoundations, Clive worked in senior positions heading operations for Cushman and Wakefield for EMEA and CBRE, as Head of Operations for the UK Asset Services division. Prior to this, Clive held various senior positions, specializing in transformation, change management and financial management.

Clive graduated from York University, Toronto, with a Master of Business Administration in Finance & Economics.

 

 

 

 

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About RealFoundations

RealFoundations (RF) is the world’s foremost professional services firm focused solely on the real estate industry. Through our delivery of Management Consulting and Managed Services, we help companies that develop, own, operate, service or invest in real estate make better, more profitable decisions. We are proud partners to over 500 real estate companies around the globe, providing accelerated solutions that solve some of real estate’s most complex challenges. We Make Real Estate Run Better.