February 10, 2025 - Many residential management companies are finding it difficult to staff talented accountants and finance managers. Between 2020 and 2022, there was a 17% decline in the number of accountants and auditors as more than 300,000 left their jobs. To make matters worse, the number of accounting graduates has fallen over the past decade, so there is not enough incoming talent to fill the gap.

Some real estate companies have reacted by trying to upskill their employees, but this has created its own challenge — a higher turnover rate. According to Citrin Cooperman’s recent survey, 38% of companies saw success with their upskilling programs, but 40% struggled to retain skilled employees.

As a result of this shortage, affected companies are having trouble keeping up with tasks like cash flow projections, bookkeeping, financial reporting, and rent collection and reconciliation. This causes three major challenges for real estate firms.

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1. No support for decisions

   In real estate, the ability to make quick, data-driven decisions can mean the difference between seizing a lucrative opportunity and missing out on potential profits. Imagine trying to forecast the expansion phase of the real estate cycle with old census data or trying to assess the financial viability of managing a property without accurate projections.
   
   Many real estate firms are struggling to access information to support their decisions because they do not have a finance team that can generate the necessary reports and analyses. Due to these limited resources, they are not able to forecast weekly, only monthly or quarterly. Citrin Cooperman found this to be the case for 76% of respondents surveyed for the Private Company Performance Report.
   
   Forecasting weekly is useful because it helps identify changes or trends immediately and capitalize on favorable market conditions, but those frequent forecasts put additional strain on finance teams because they require more time, effort, and sophisticated models.
   
   As a result, many companies are outsourcing financial planning work, which often includes building and then managing ongoing processes to ensure timely and accurate data is delivered on a recurring basis.
   
   More than half of companies are considering outsourcing 25% of their accounting and finance needs, and 90% are outsourcing to access advanced technology skills, according to our survey.

2. Trouble ensuring compliance and resulting fines

   Real estate firms must comply with different laws and regulations, from property taxes to lease agreements, at the national, state, and local level.
   
   Failure to follow all these standard regulations and guidelines can result in hefty fines and penalties. In one case occurring in 2023, the Securities and Exchange Commission (SEC) charged a private equity firm $20.5 million for failing to disclose conflicts of interest and real estate brokerage fees paid to a firm owned by its chief executive officer, misleading investors about the nature of these payments.
   
   This is just one example of how the high cost of noncompliance and the accountant shortage affect firms’ abilities to manage and meet legal requirements.
   
   Many real estate firms lack the data and internal controls to reach compliance, and it will take significant efforts to do so. This is because in-house teams are busy and are often unable to close their books accurately each month or follow all the necessary compliance procedures. This opens organizations up to the risk of facing similar penalties and the subsequent negative impact on their reputation.
   
   All of this can be remedied by bringing in an outsourced accounting team that specializes in real estate. These teams can start contributing from day one and are likely to have the expertise to ensure all compliance requirements are met without the risk of errors or delays. This frees up internal accounting teams to focus on other strategic initiatives rather than dwelling on compliance minutiae.

3. Lack of senior-level guidance

   Real estate accounting often requires specialized expertise and senior-level oversight that many in-house teams lack. For instance, complex financial modeling requires seasoned professionals. Generalists or junior accountants may struggle with these tasks, leading to errors or suboptimal outcomes.
   
   While the value of experienced and specialized accountants is clear, it comes at a significant cost. Senior-level finance professionals in the real estate industry command high salaries with an average pay of $177,491 per year according to Glassdoor. Due to the accountant shortage, these experienced professionals are not readily available to hire, which is yet another reason why so many companies are seeking specialized expertise on a part-time basis.
   
   Working with an external advisor offers access to senior-level guidance while only needing to pay for the hours used. This helps businesses circumvent the cost or overhead of full-time employment and allows them to scale up or down the scope of work based on fluctuating needs and business changes.

Outsourcing fills the gaps left by real estate staffing challenges

The shortage of qualified accountants, combined with high turnover rates, has left many real estate companies struggling to manage their finances, forecast, and ensure compliance, but it does not have to be this way. By collaborating with outsourcing providers, organizations can alleviate the challenges caused by the talent gap in the finance and accounting space.

Citrin Cooperman’s Business Process Outsourcing Practice is a viable alternative for real estate firms facing either a skill gap or talent shortage. Our team can help you be more productive and focus on your core business objectives. Please contact Ryan Moore and Deanna Rich if you want to learn more about how outsourcing can benefit your real estate company.

Download the guide to outsourcing real estate finance →