While marketing is essential to run a real estate business, accounting is another vital area that cannot be neglected. Accounting in real estate is not like other sectors; it's a complex and tedious process that can be easy with the right software, but not all businesses invest in having a functional accounting software.
It's important to keep all the financial data and integrate software to get the best results. Here are five challenges identified in real estate businesses, and if you're facing the same, there are ways to overcome them.
Top 6 Property Accounting Challenges
Hiccups in software systems are inevitable, but it can be frustrating if there is no proper maintenance. With legacy software and a lack of adequate management, keeping the company's financial data can get all the more difficult.
Or it may be due to other underlying problems too. Whatever may be the issue, here are some of the most common property accounting challenges and the ways to solve them:
1. Frequent errors in the Financial Data
The real estate business is not just about building a good portfolio; there's much more to it than just that. You need to keep your financial data secure and accurate at all times. And to keep the data clean and up-to-date, data management should be on-point.
Documenting financial information is extremely important at every stage of the business, but most firms face this challenge due to the lack of the right resources. On the one hand, poor management can lead to erroneous data, and on the other hand, it can hinder the growth and the future scope of the business.
Going for good property management software to ensure data is error-free and managed well can reduce the burden and frustration of dealing with things.
2. Complex transactions
Accounting in a business is itself one of the most crucial yet the most difficult parts of a business. Managing huge transactions and documenting them is important to grow your firm. And when your property portfolio builds, managing transactions is essential.
Make your accounting processes easy and less complex by going with a better system or by outsourcing it. It lowers the cost and increases efficiency. You get to manage your business smoothly without having to deal with common errors.
3. Poor expense classification
Categorizing expenses can be a huge task without experienced resources and the right software. In real estate, classifying expenses is one of the most crucial aspects of running the business. It can only happen when there is transparency in the processes and better management.
But most firms find it extremely challenging to do this, especially when the accounting standards change time and again; it gets a lot more difficult to categorize them as needed. Having a dedicated set of experienced teams can help you manage better while cutting down costs.
4. No back-office support
You may already have an accounting department in your firm or have a third party do it for you, but it can cost you more in the long run if you don't have the right support. One of the most common property accounting challenges can be overcome with the right software and support team to manage all your back office accounting.
And you can do that by outsourcing which will help you save a lot too, as you need not spend more on resources, equipment, training, and others to manage your back office accounting. It also helps boost revenue by working your portfolios better.
And what's better than optimizing your business process at minimal costs, right? Training your resources can cost a lot more and take more time which may not be ideal if you have a budget constraint. So, it's always better to look for an alternative than hiring resources and dealing with the same challenges again.
5. Lack of proper integration
Integrating software is a great way to enhance the performance of the operations, but what if integrating only leads to incorrect data and zero transparency? It's one of the main challenges faced by real estate firms that hampers the day-to-day processes.
Software integration should be seamless and help streamline the business process so go for the right solution providers who can make your job easy and ensure all your financial records are safe and error-free. KriyaGo can help you with software integration to manage your financial data easily. Talk to us to know more about it.
6. Losing data due to poor backup management
We cannot stress the importance of having a backup for your documents here. No, not the paper-based physical backups; it's the cloud-based digital backups to keep all your data in one place that’s needed for your business.
Sure, you can save a physical backup but ensure it's done along with the cloud backup for added safety. There will be large transactions and other important data, so as and when you start building your portfolio, it's vital to have a backup to fall back on in case you lose any valuable data. It’s also a good practice to have a back up of backups to ensure you never lose any data even if your back up fails though the chances are very rare.
Let KriyaGo Solve All Your Accounting Problems!
Finding it hard to manage your accounting activities? KriyaGo can help you handle it easily. We have a dedicated team of experts who can run a quick audit on your company's accounting software and help you understand the gaps.
We specialize in back-office accounting, lease abstraction, lease audits, and more. We also provide integration services where you get all features in a single platform to help you manage your financial data in one single place. We help you integrate with Yardi, Procore, and others to help you manage your business efficiently.
If you think your systems need a revamp or you need more features to be added to your existing software, get in touch with us today!
