Simply put, back office accounting services refers to the behind-the-scenes work of any firm. It is called back office because it is the seldom-seen, less glamorous section of the workforce. Accounting is a crucial part of any company but it is not front and center like other teams. In this context marketing and sales are the "front office" of businesses. These deal with a very visible workload, including adverts, mergers, contracts, and more. In contrast, back office accounting is primarily concerned with tasks like
Invoice filing
Payroll management
Inventory
However, as essential as back office accounting is, it can be costly. Routine tasks like data input, filing, and account management require a dedicated bookkeeper. Additionally, it is draining work, and can often be exhausting. In real estate, back office accounting involves routine work, with an emphasis on
Insurance premium payments
Tenant chargebacks
CAM reconciliations
Reimbursements
Utilities cost management
Employee payrolls
Rent payments
Tax filings
Occupancy costs
Invoice/statement filings, and more.
It is labor-intensive work and the focus of the central business operations. While sales and marketing work to draw in clients and employees, the back office accounting works to retain them, via efficient management. From timely payments to timely rent confirmations, their work is integral to the business.
However, back office accounting can also be a drain on resources. The work is routine, and time-consuming but also necessary. As exhausting as recording ledgers and filing is, no company can afford to ignore these tasks. As a result, a large portion of the workforce is redirected into these operations. Employees thus have to work day in and day out to provide back-up to the front office. Such tasks can drastically decrease work output while also affecting overall productivity.
Back Office Accounting Services
Getting a third-party back office accounting service can help with this issue. By hiring professionals to clear their back office operations, companies can focus on their core business. For a real estate business, building connections is the most integral task. By delegating the routine accounting administrative work to third-party services, companies can focus on marketing and increasing sales.
Cuts Down Company Expenditure
It takes months and even years for an employee to develop the proper set of skills for auditing finances. In addition to their specialization, they have to be trained and introduced to the system. Not only is this time-consuming but it also affects productivity and finances.
With back office accounting services, companies do not have to invest much in training employees. These teams are led by professionals with years of accounting experience under their belt. A professional is less liable for errors during filing compared to a regular employee. Additionally, they will have picked up skills along the way to maximize work output and productivity.
FAs also cuts down on the cost of hiring a full-time employee. Companies can temporarily subscribe to these services without the hassle of onboarding workers. Additional costs like health insurance, worker benefits, and more are also not typically a part of back office accounting services. Hiring a professional is thus less costly than maintaining a regular employee in the long run.
Without this need to invest in back office accounting teams, companies will be able to redirect savings and cash flow into the core business.
Access to Advanced Tech
Installing state of the art software is not always an option for start-ups and small businesses. The price of these techs varies from $5000 and goes all the way up to $ 20,000+. The capital investment needed to make this purchase is simply not viable for emerging companies.
Fortunately, outsourcing back office functions offers a smart solution. Not only do these third-party firms bring in considerable work experience but they also offer access to new tech. By outsourcing back office accounting, even small businesses can benefit from top-of-the-line tech. Software like MRI uses AI to read and process data. Be it CAM reconciliations statements or insurance premiums this software can crunch the numbers in record time.
By hiring a real estate accounting firm, businesses can make use of these programs during the most necessary periods. MRI for example has been known to cut down on operation time by 75%. Without permanently investing in this tech, even start-ups can optimize their work output.
Chance to Digitize Existing Data
With new tech also comes the opportunity to revitalize existing data. Companies may be unable to digitize data due to a lack of access to proper tech. But a third-party accounting service equipped with relevant software will be able to solve this issue.
By hiring these professionals, companies will be able to switch to more efficient digital models. Programs like Yardi can easily help clients with data migration. Everything from old transaction records to vendor contacts will be moved over from the legacy system with minimal data loss. A digital database streamlines work output by eliminating irrelevant data. Duplicates, dated reports, and expired contracts may be piling up in the system, hindering efficient data management. By turning to a digital model, companies can get rid of these while also optimizing accessibility.
Accounts and statements are available with the new system's click of a button. The financial advisors are also usually well aquatinted with real estate management software. They will be able to tweak and customize the programs to suit the firm's production model. Additionally, should the company choose to permanently integrate the tech into its work model, it can also provide extra assistance.
Since these professionals are likely to have connections with the service providers, installations will be a breeze. Additionally, the employees will also be able to receive proper training from the advisory firms.
Backoffice Accounting Services Tailored to Your Needs
Back office accounting services bring a more diverse set of skills to the table. With more efficient management and faster data entry and analysis, these teams cut down on company expenditures. Without the need to onboard regular employees for back office operations, real estate firms can redirect the savings into the core business.