As commercial real estate firms continue to grow and scale, it becomes increasingly difficult to keep track of the money that flows through each property in the portfolio. For this reason, it is necessary to build the infrastructure needed to track and maintain the finances - at the property level - of the entire asset base.
A big part of this infrastructure is the hiring of a property accountant.
What are the day to day responsibilities of a property accountant?
At a high level, a property accountant is responsible for tracking all of the cash that runs through an individual property and reporting the results to the asset manager and/or senior management.
More specifically, the day to day responsibilities of a property accountant include:
- Managing The Books: Each month, as rent is collected and bills are paid, it is the property accountant’s responsibility to track the flow of funds and to reconcile all accounts.
- Budget Tracking: Each month, when the books are closed out, the property accountant compares the actual results to the budget and identifies variances that could be problematic.
- Budgeting: Because of their detailed knowledge of property level operations, the property accountant is often called upon to help construct the property’s operating budget each year.
- Accounts Receivable / Accounts Payable: As the steward of each property’s finances, the property accountant is responsible for reviewing and approving major expenses and for overseeing the collection of major receivables. To this end, they will review and approve A/P vouchers, payroll data entries, and daily cash receipts.
- Adjustments: As part of their reconciliation each month, the property accountant reviews and approves journal entries and account adjustments to balance out the books.
- Account Audits: Periodically, the property accountant may audit the accounts and operations of the property to ensure that there are proper safeguards in place to protect against internal theft. If the company is large enough, the property accountant may assist external auditors with their own effort.
- Tax Planning & Depreciation: For the property’s fixed assets, the property accountant ensures that they are being depreciated in accordance with IRS rules and proactively plans for strategies to minimize taxes for property stakeholders.
- CAM Reconciliation: For property types where tenants are responsible for paying some portion of operating expenses, the property accountant is responsible for reconciling CAM reimbursements from tenants to actual operating expenses to make sure everyone is paying their fair share.
- Reporting: For each of the properties that they are responsible for, the property accountant prepares and distributes a series of reports each month that describe the property’s performance relative to targets. They may also identify risks, potential issues, and areas for savings.
Needless to say, a property accountant plays a very important role in the day-to-day management of a commercial real estate asset. Their knowledge, expertise, and experience help to maximize a property’s financial performance while ensuring that accounting practices stay within the bounds of all relevant IRS rules and laws.
When Do You Need To Hire A Property Accountant?
A property accountant is one of the first hires after purchasing a property.
Firms that have large-scale holdings and multi-property portfolios likely need to have one or more property accounts on their staff in a full-time capacity.
Smaller firms still need a property accountant, but they may not have a need to employ one full-time. As such, it is common for small firms to hire freelance property accountants.
What differentiates a good property accountant from a great one?
The difference between a good Property Accountant and a great one has both legal and financial implications. A great Property Accountant can protect their company from IRS audits and broader scrutiny around accounting practices. In addition, they can help to deliver strong financial results, which benefit both the firm and their investors. Characteristics of great Property Accountants typically include:
- Strong Knowledge of IRS Rules and GAAP: Great Property Accountants have a strong understanding of IRS rules and generally accepted accounting principles (GAAP) and use this knowledge to ensure their properties are in compliance with all rules while maximizing tax deductions and the bottom line.
- Certifications: The gold standard of accounting knowledge is a candidate who is a Certified Public Accountant (CPA). This is a certification that takes years of school and passing a major exam to obtain. Those that have it possess superior accounting knowledge and are much more likely to bring value to the role.
- Public Accounting Experience: Major public accounting firms, like PwC, Deloitte, and EY, are training grounds for some of the brightest young accounting minds in the business. Individuals with this background are exposed to complex accounting projects and can bring this experience to your firm. If their public accounting experience includes commercial real estate clients, even better.
- Software Tool Proficiency: To track and manage a property’s cash flow, there are a number of software tools that the best Property Accounts are familiar with. As it relates specifically to commercial real estate, they should have a high degree of proficiency with Yardi, Appfolio, Zoho, Re-leased or the like.
- Strong Analytical Skills: Great Property Accountants have highly analytical minds and are able to understand the “story” that is told by the numbers. They “trust but verify” the numbers they are given and are able to identify risks and patterns within them.
- Able to Prioritize: In larger firms, a Property Accountant may be responsible for managing the finances of several properties. As such, they need to be able to prioritize their workload and concentrate their effort in the right places, at the right time.
- Strong Communication: When they have finished preparing their reports, great Property Accountants are able to identify the key conclusions and communicate them in writing, by phone, or in a presentation to property stakeholders and investors.
- Excellent Collaborator: A Property Accountant is an integral part of the Asset Management team. The best ones are excellent collaborators and are able to work within a team structure to deliver IRS compliant, profitable outcomes to their company.
Great Property Accountants are in high demand. Those that are looking for a job often have multiple offers and they command high salaries. As a result, hiring one can be tricky.
Where can you hire a great property accountant?
It is possible to hire a property accountant through the normal channels - job boards (Indeed, Zip Recruiter), search firms, recommendations, or active outreach. This can certainly be an effective way of finding a great Property Accountant, but they can also be incredibly time-consuming and the results can be highly variable. Bullpen offers a compelling alternative.
At Bullpen, we specialize in helping commercial real estate acquisition and development firms find and hire the best freelance Property Accountants in the industry. We pre-screen the candidates, verify their experience, and handpick the best talent for your hiring needs … all within 72 hours.