The Benefits of Outsourcing Accounting for Construction and Real Estate Businesses
A growing number of construction and real estate companies are looking to reduce overhead and provide value to the internal accounting/finance functions. If properly implemented, outsourcing part or all of your accounting can be a good way to increase your business’s bottom line and provide this value.
However, many businesses — particularly those in the construction and real estate industry — are unaware of domestic outsourcing as an option to supplement their operations, and do not know how to find an outsourcing company that would work well within their business. By understanding what type of outsourcing company is best for your business, and when and how to use these services, you may find it can improve your company’s financial reporting and operations.
When should I hire an outsourcing company?
Many construction and real estate businesses have fewer than 50 employees, and just one person performing all the accounting functions. If this person leaves the business, it can be difficult for the owner to find a new person he or she can trust and who will quickly learn the business’s specific accounting functions. Hiring an outsourcing team can alleviate the stress of staff transitions, as finding a replacement for long-standing staff members can be a time-consuming and potentially unfruitful process.
In addition, outsourcing can be helpful if your company is undertaking a significant project and needs more staff for the duration of the project, or if a staff member is temporarily on leave.
Business owners who have tasks that can be easily completed remotely can also benefit from outsourcing services. For example, commercial building managers who need help with basic accounting and finance services (such as contract tracking, rent collection, billing, and CAM reconciliations) may reduce overhead costs by outsourcing these services, since they do not need to be completed in-house.
How do I find an outsourcing company?
Many construction and real estate businesses find outsourcing services by asking their CPA or enlisting the help of a recruitment agency.
When considering an outsourcing arrangement, think about the reputation of the outsourcing company, the quality of its work, and its understanding of your industry. You should also have a conversation with the company about how well the outsourcing staff takes direction and works within a team.
What type of outsourcing company should I hire?
In order to get the most out of your outsourcing investment, it is best to hire an outsourcing company that has significant experience in the construction and real estate industry for the following reasons:
- The company can carefully match the skill set of an outsourced accountant with the needs of your business. This can sometimes be problematic when hiring an outsourcing company, since those that don’t understand your industry may provide a staff member who is over- or under-qualified to do the job.
- The outsourced accountant will understand accounting processes that are specific to the construction and real estate industry, including revenue recognition rules, lien waivers, insurance certificates, and proposals and contracts. This knowledge will shorten the time you have to spend training them, and they may know of ways to improve your process and systems based on their experience with other companies that had similar accounting needs.
How we can help
With a thorough selection process and a firm grasp on how to find the optimal outsourcing provider, construction and real estate business owners can decrease their overhead expenses while adding value to their organization, and be exposed to new and innovative solutions for their financial operations.
CliftonLarsonAllen provides outsourcing services for the construction industry — our experienced outsourced accountants work exclusively within the industry on finance and accounting services. Outsourcing is one of our three integrated businesses and is a strategic focus for our firm.
Our accountants offer a personalized assessment of how we can help improve your cash flow, reduce your workload, and streamline your processes. Our services include financial statement reporting, preparing monthly job schedules, identifying operational metrics, and preparing for audits.CLA can help you understand how these changes impact your organization, so that you can adapt to these standards and embrace the changes with confidence.