Outsourced accounting lets real estate firms focus on their strengths

Real estate professionals succeed based on their ability to profitably acquire, develop, operate and sell real estate. As real estate companies grow, one of the biggest challenges is growing their back-office accounting and administrative functions to keep up with the increasingly challenging requirements of lenders and sophisticated investors. Those real estate companies should also consider the advantages of outsourcing accounting and fund administration functions to real estate-focused client accounting services (CAS) providers.

Over the years, CAS has been discounted by real estate investors since the primary providers were often smaller practitioners with limited experience in complex real estate environments. Today, many specialized groups have arisen that focus on working with real estate developers and asset managers, public and private real estate investment trusts, and private equity real estate funds. Whether they are looking for help in streamlining accounting processes, launching new investment vehicles with more complicated reporting requirements or outgrowing their in-house accounting resources, these investors should consider outsourcing accounting and fund administration functions to real estate-focused CAS providers. By choosing to outsource real estate accounting services, they can leverage the expertise of these specialized groups to navigate the complexities of the industry.

How CAS providers streamline essential accounting functions

Real estate companies often hire CAS providers as their accounting function for individual investments across their whole portfolio or for performing certain tasks. These tasks often include cash disbursements, cash receipts or full monthly financial reporting, but a full solution may include lease administration, treasury management and construction draw management services.

CAS providers can provide a more comprehensive approach — evaluating processes for operational efficiency and proper controls and then implementing recommendations using new applications and modules while integrating with technology resources to build automation. CAS providers can even perform outsourced systems administration services, such as Yardi administration, including setting up users, establishing a helpdesk and executing other ad hoc projects.

Beyond the essentials

Sophisticated CAS providers even do work for public real estate companies. CAS providers can perform outsourced SEC reporting services, including the preparation of Form 10-Qs and 10-Ks and current reporting on Form 8-K. These services extend to accounting support for transactions, such as IPOs, and spinoffs and to building the accounting function to migrate from a shared services or transition services model.