The Biggest Operations Challenges Facing Real Estate Companies Today
AMID AN ACUTE FINANCE AND ACCOUNTING TALENT SHORTAGE, REAL ESTATE COMPANIES STRUGGLE TO MANAGE THEIR OPERATIONS AND ACHIEVE TIMELY FINANCIAL REPORTING — BUT THERE ARE EFFECTIVE WAYS TO ADDRESS THESE GAPS AND REACH YOUR GOALS.
Today, many real estate companies outsource their finance and accounting functions — and for good reason. For most teams, outsourcing is more efficient and effective than hiring full-time staff — providing you access to specialized talent on-demand and allowing you to scale your team up or down as needed, which allows you to more effectively manage a key overhead expense.
As a solution, outsourcing is growing in popularity. Seventy-eight percent of finance and accounting managers in the United States are planning to increase their use of contract professionals.
However, finding the right person or team to meet your specific needs can be a challenge. Sky-high interest rates have limited many teams’ budgets and an ongoing finance and accounting talent shortage has left nearly 90% of companies struggling to fill crucial roles.
Choosing the right outsourcing provider is more critical than ever. In this guide, we will show you how to find and evaluate the right provider for your needs.
The Power of Great Outsourcing
1 GAIN DECISION SUPPORT THAT WILL MAK E YO U MORE PROFITABLE
Instead of looking at financial and accounting metrics on a monthly basis for periods that have already finished, mature real estate companies are looking at these metrics weekly. They are also checking actual results against their budgets and forecasts to understand whether the business is performing as expected. A great outsourcing provider will provide you with real-time information to support you as you consider investment opportunities, structure new deals, improve the profitability of current investments, and manage day-to-day operations.
2 EMPLOY INDUSTRY SPECIALISTS WHO CAN BE IMMEDIATELY PRODUCTIVE
Many real estate companies’ accounting and finance teams are overstretched due to an industry-wide talent shortage. Understaffed teams struggle to complete the month-end close, produce meaningful financial and investor reporting, and provide decision support in a timely manner. With the right outsourcing provider, you can access specialists who understand your business and can start contributing right away.
3 ACCESS HIGH-LEVEL FINANCE TALENT FOR A FRACTION OF THE COST
Real estate companies need dedicated accounting and finance staff who have experience in the industry and use specific technologies. This kind of experienced talent can provide immense value for your business — but that knowledge comes at a high cost. A great outsourcing provider can provide you with senior-level or specialized finance talent for just the hours you need them, meaning you get the support you need without having to carry the overhead.
“Companies that embrace the open-talent model get their work done just as well as those that use traditional staffing models — but 4-5 times faster and 8-10 times cheaper.”
— HARVARD BUSINESS REVIEW
Tasks That Real Estate Companies Can Outsource
Real estate companies looking to take advantage of outsourcing as a solution have several options around what kinds of services to outsource. Today, real estate companies can choose to outsource processing their transactions, period-end closing, reporting and analysis, or a combination. When you choose to work with an outsourcing provider like Citrin Cooperman, we will work with you to identify your biggest pain points and build a custom outsourcing solution for your needs.
OUTSOURCED BOOKKEEPING
Outsourced bookkeepers provide basic accounting services. They will balance your books, record accounts payable and receivable transactions, reconcile cash, and provide you with a standard balance sheet and profit and loss (P&L) reports. For simple business structures with basic accounting needs, this can be a viable low-cost, low-touch option.
FULL-SERVICE OUTSOURCING
A full-service outsourcing model is custom-tailored to your firm’s needs. Engaging a solution like this can help you build better processes, achieve a deeper and more insightful level of financial decision-making, and select and integrate the right technology to help you achieve faster, more accurate reporting. An outsourcing provider can bring in industry specialists as needed to support or augment your team, stay current on the latest changes to operating best practices, and help train and upskill your existing finance staff.
With your day-to-day accounting and finance tasks taken care of, you can focus on what you do best — managing your properties, evaluating new opportunities, and liaising with investors.
TECHNOLOGY OUTPUT
Provides a standard monthly balance sheet and P&L report
Uses your existing tech stack or onboards you onto a basic system
STAFF
Employs lower-level staff to perform routine tasks
GOAL
COST
Provides a low-cost solution for simple businesses
Lower cost for a canned solution
Provides a monthly deliverable that offers decision support, including financial planning and analysis deliverables
Creates a customized technology stack and processes based on your specific needs, including system selection and integration
Employs a highly specialized team who can provide industry advice, training, and best practices tailored to your company
Provides mature finance capabilities to fast-growing real estate firms
Higher cost for a tailored solution, but considerably cheaper than the multiple full-time roles otherwise needed to achieve these capabilities
With your real estate company’s day-to-day accounting and finance tasks taken care of, you can focus on what you do best — managing your assets, evaluating new opportunities, and liaising with investors.
The Citrin Cooperman Solution
Our solution to outsourcing finance and accounting allows us to provide all the capabilities our real estate clients need as they manage, grow, and evolve their businesses. We help your business' finance and accounting function become more efficient and effective through people, processes, governance, technology, and data.
Our outsourcing clients typically go from slow, manual processes (a level one or two on the scale below) to fast, in-depth reporting in about 60 days.
PEOPLE
PROCESSES
GOVERNANCE
TECHNOLOGY
DATA
Disconnected people and processes
Ill-defined roles and responsibilities
Manual, timeconsuming processes
Informal and ineffective policies and procedures
Unintegrated systems and data architecture
Limited data which is rarely used
Level 1: SUSTAINS
Steps towards centralization
Defined roles and responsibilities
Fewer manual processes
Defined policies and procedures
Common platforms
Ad hoc analysis, manual data cleansing
Level 2: REACTS
Transformation through automation
Well-trained and appropriately deployed staff
Centralized activities
Integrated policies and procedures
Integrated and automated systems
Data is clean, accessible, and easy to use
Level 3: TRANSFORMS
Leadership through innovation
Highly specialized staff
Fully automated processes
Automated governance
Machine learning / Artificial Intelligence
Predictive analytics
Level 4:
INNOVATES
When you choose to work with Citrin Cooperman as your outsourcing provider, here is what you can expect:
1
FINANCE ASSESSMENT (a standalone engagement, or a part of the onboarding process)
Our finance assessment takes approximately three weeks. During this process, our team evaluates the quality of your documented procedures, the systems you are using, the maturity of your financial reporting, and the level of accounting support your firm currently receives. We identify where there might be opportunities for improvement and where there are significant issues or gaps. The result of this phase is a list of recommendations and an implementation roadmap that our team can help you achieve. The leader of this assessment stays engaged on an ongoing basis.
2
ONBOARDING (first month through first close)
Often the rapid finance assessment results in the next phase, which focuses on the month-end close process. The month-end close starts with an onboarding phase, at which time we start implementing the findings from the assessment and setting up the delivery structure for our services. This includes:
• Sometimes, conducting a cleanup service to prepare the books
• Establishing a month-end close checklist
• Documenting standard operating procedures
• Agreeing on financial reporting formats and KPIs
• Setting approval thresholds, workflows, and other key controls
• Onboarding the team who will perform all of the in-scope tasks
• Setting up the monthly deliverable deadlines and collaboration technology used to work with your team
STEADY STATE
Once we have laid the foundation for our work together, we settle into a monthly cadence. In addition to your engagement lead, we have a team of dedicated staff divided into different functions who work alongside your internal staff. Our documented processes show everyone what is assigned to them, and we have digital portals that everyone uses to track their deadlines and other weekly activities.
We pursue continuous, incremental improvement to your processes and financial information. We can provide much-needed external perspective so your finance and accounting functions can continue to improve.
DECISION SUPPORT
Our ultimate goal is to provide management with decision support platforms that enable you to make crucial decisions about the direction of the company. These forward-looking tools include budgets, financial forecasts and re-forecasts, projections, and key performance indicator dashboards. We tailor these analyses to your specific needs and present them in a clear and concise format. Having the right decision-making support system in place is crucial to your company’s success. 3 4
Mike Zyborowicz Managing Partner Business Process Outsourcing Practice mzyborowicz@citrincooperman.com
About Us
Mark Mindick Partner Real Estate Practice Leader mmindick@citrincooperman.com
Business Process Outsourcing Practice
Faye Huang Director Business Process Outsourcing Practice fhuang@citrincooperman.com
Ryan Moore Director Business Process Outsourcing Practice rmoore@citrincooperman.com
Citrin Cooperman's Business Process Outsourcing (BPO) Practice is designed to help businesses achieve efficiency, cost savings, and strategic growth. We understand the challenges executives face in managing operations with limited resources and time. Our BPO Practice offers a comprehensive suite of outsourced services to support your finance, accounting, and IT needs, allowing you to focus on your core business activities.
Citrin Cooperman’s BPO team consists of industry-specific finance and accounting, and IT professionals with extensive experience in providing outsourced solutions. Our focus is on delivering cost-effective services tailored to meet your business needs, whether on an ongoing or project basis. We integrate our BPO services with our firm’s other offerings, such as tax advisory, digital services, cybersecurity, and transaction advisory, providing a holistic approach to supporting your business.
Real Estate Industry Practice
Real estate is experiencing a transformation unlike any we have seen before. The uncertainty in the marketplace, rising interest rates, and changes in the use of commercial space require skill and knowledge to navigate. Our dedicated Real Estate Industry Practice is equipped to help our clients successfully navigate the many challenges in a deal cycle and achieve continued growth.
