Property, asset and portfolio managers are beginning to realize the numerous benefits of contracting out core business processes that have traditionally been performed in-house. Outsourcing front-office operations, such as leasing, isn’t a new phenomenon in the real estate management industry. However, in recent years there has been a growing trend towards outsourcing general accounting functions to give property owners a competitive advantage.
Just about every commercial real estate firm has contracted out services at some point. Whether payroll administration, information technology, snow removal or answering services, property owners have always looked for ways to keep labor and overhead costs down while improving efficiencies so they can focus on creating value for their stakeholders. Outsourcing does just that—it cuts insurance, tax and payroll expense while freeing up time for an organization to focus on key initiatives that will increase the value of their properties. As market conditions grow more challenging by the day, and a cloud of uncertainty is forming over the economy, many CRE operators are adopting new back-office administration services so they can stay ahead of the game.
However, it’s not labor arbitrage they are after. They’re looking for a unique outsourcing model that merges property-level accounting services performed by industry experts with best-of-breed technology-enabled solutions to automate core accounting processes, and delivers accurate and timely financial reports. Instead of recruiting, hiring, training and ramping up new accounting staff, asset management firms can concentrate on revenue growth and business development by contracting out back-office accounting functions with this new model. And since the solution can be deployed very quickly, commercial real estate owners have the ability to scale at lightning speed.