People in the real estate business enjoy selling and client interactions. But ask them about bookkeeping and they will tell how tedious and time consuming it is. The challenge begins with the need to maintain their books and hire staff to manage their accounting tasks.
Listed are the top 6 challenges for real estate companies
- New accounting regulations: The new accounting standards have affected the way businesses have been maintaining their records. Compliance with these regulations has made it vital to conduct accurate and timely updates of each financial transaction. Additionally, non-real estate leases need to be tracked, abstracted and stored. This is challenging for companies who have not maintained these types of contracts.
- Automation: The changes in accounting software have been significant. Artificial Intelligence is making it possible to reduce the manual work involved in accounting. So, it is essential to invest in the latest accounting software and identify which accounting tasks can be taken over by it. However, technology cannot accomplish every accounting task, and human action is still necessary.
- Shortage of skilled accounting applicants: One of the major concerns of companies is finding qualified, experienced applicants for accounting positions. This is the reason more companies are moving towards outsourcing their accounting tasks so that they can focus on revenue-generating activities.
- Up to date data: Accurately updating and tracking financial transactions is important for successful accounting. The details of payroll, commissions, taxes, etc. must be recorded promptly, and made available for evaluation purposes.
- Organizing documents: Accounting involves recording transactions and reconciling records with the appropriate account to ensure there are no discrepancies. Documents like invoices, receipts, tax returns, insurance documents, etc. need to be filed and organized properly and should be available for reconciliation purposes.
- Lack of coordination with lease administration team: Lack of coordination between the accounting and lease administration departments hinders the performance of critical tasks. For instance, payment of invoices needs lease references that are readily available with the lease administration department.
For companies whose main occupation is not accounting, bookkeeping can be a daunting and costly activity. But companies have a choice to seek help from an expert service provider. Third-party service providers come with the expertise required to manage all the accounting activities, so companies don’t have to worry about it.