Should You Outsource Your Bookkeeping?

It might be tempting to try and do the accounting yourself. But getting a team of experts could save you precious time and resources.

Most real estate professionals start off doing their own bookkeeping of some form. Whether its’s using an accounting software, an Excel Spreadsheet, or a shoebox full of receipts it’s important to maintain some sort of record keeping.

From our experience, a lot of you update your QuickBooks only so you can file your tax return. Raise your hand if you typically wait until the end of the year or the start of the next year to clean up your books?

Such an approach could work for the business for a while. But it might not be the best option, especially once the company starts growing. Here are the essential reasons why outsourcing might be a good idea.

Reason #1. Saves You Time

Your already have a long list of responsibilities. The time you spend on accounting tasks means you get less time to focus on your company's vital operations, such as bringing in new leads. Outsourcing will save you time and get your financials in order sooner. Simply put, leave the accounting to the professionals.

Reason #2. Decreased Costs

If you consider hiring an employee solely for accounting, or you've already done that, notice that outsourcing could save you a significant amount of money. There are indications that companies hiring accounting/bookkeeping firms save around 40% of the costs compared to those that have an in-house accounting team.

Reason #3. Maximize Deductions Throughout the Year

If you wait until the end of the year to record all your expenses into your accounting system, you could be missing out on potential deductions that will help lower your tax bill. There is very little that your CPA can do to help you reduce your tax liability after the year ends.

Outsourcing your bookkeeping to a professional will allow them to keep a close eye on your financials throughout the year so they can recommend deductions to help your lower your tax burden.

We specifically recommend selecting a professional that has expertise in the real estate industry as they will have all the knowledge on available deductions for your specific business.

Reason #4. More Time to Focus on Your Business

You’ve probably figured out by now that bookkeeping can be a tedious and time-consuming task. It’s been estimated that the average small business owner spends eight hours a month completing their books. That’s a full day of work each month and from what we have seen, most of you are not even doing it correct! Sorry, but someone must tell you the truth!

The Bottom Line: Focus on Real Estate, Not on Bookkeeping

Real estate bookkeeping is a necessary evil. It can feel like a real drag to complete but if you are serious about growing your business and your income then you need to take this task seriously.

Outsourcing your bookkeeping is cost-effective, saves time and money, and lets you focus on the more important matters where you and your team can be the most productive.