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In 2020, the estimated market value of outsourcing services was a whopping $620.381 billion. With a compound annual growth rate of 5.54%, it is projected to reach $904.948 billion by 2027. It is hardly surprising that outsourcing is growing, given all its advantages.
Many property management companies share one common goal. That is, to ensure smooth business operations while maximizing cost savings. One proven way to achieve this is to consider outsourcing. Think of it as having external partners that handle the accounting, IT functions, and paperwork so you can focus on running your business.
If you want to start cutting costs but need help knowing where to start, this article is your guide. It’s time to Outsource Property Management Back Office Services and maximize your resources.
Back office services refer to support functions and administrative tasks. They are fundamental to the effective operation of a property management company. Back office services typically include tasks related to human resources, legal compliance, administrative support, and accounting. Here’s a quick breakdown of the most common back office services in property management:
Outsourcing back office services lets you focus more on significant business activities. Increased focus boosts productivity and efficiency. Outsourcing makes it easier to scale the business and comply with industry standards and regulations.
There are many reasons why you should consider outsourcing back office services. Below are some of the remarkable benefits you stand to gain:
As a business owner, you may wonder how outsourcing helps you save money. The answer is simple. Rather than hiring an internal team to do your IT, accounting, and other property management functions, you can get a team of experts for about the price of one in-house employee. You will also save money that would otherwise go to bonuses, insurance, and other related costs.
Seasoned outsourcing companies already have proven and effective processes, policies, and procedures. They tailor solutions to meet your back office needs. Moreover, their industry knowledge and expertise can help identify business inefficiencies. Addressing them ensures the business runs without any hiccups.
Only a few may be aware of it, but the advantages of outsourcing back office services are cumulative. Eliminating routine tasks will allow you to concentrate more on income-generating tasks. You no longer have to handle reports or payroll. Thus, you have more time for innovation, problem-solving, and developing solutions to take your business to the next level.
Back office outsourcing offers many benefits. But nothing is more impactful than reclaiming your time and devoting it to more crucial tasks. Working with an outsourcing partner will not just liberate you from mundane and time-consuming duties. It also allows you to spend more time on aspects that need your expertise and urgent attention.
In the property management industry, cost-effectiveness and efficiency are paramount. Outsourcing back office services allows property management companies to maintain superb service delivery. Below are seven ways it can help improve profitability and cut expenses:
When you outsource back office tasks, you eliminate the need to train and hire in-house staff. It also means you save on benefits, salaries, and other costs related to hiring full-time employees. You can get access to specialized skills and expertise without spending a fortune.
Employee training and turnover costs can impact the company’s bottom line. Unfortunately, this is a lesson many property management firms learn the hard way. The good news? When you outsource back office tasks, you minimize your reliance on internal employees. Partnering with experienced outsourcing companies also means business disruptions are minimal to none.
Internal back office functions entail investments like equipment, software licenses, and office space. Outsourcing allows property management firms to offload infrastructure costs to their chosen provider. It can result in huge savings on maintenance expenses and other capital expenditures.
You can scale your outsourced back office services up or down. It depends on business growth, seasonal fluctuations, and changing demands. Providers can easily adjust their setup to suit your changing business needs. Infrastructure limitations or fixed staffing levels do not constrain them.
Tenant relations and property maintenance contribute to tenant satisfaction and retention. Sometimes, paperwork and mundane tasks take your focus away from these key areas. Outsourcing can help you focus on property upgrades and tenant relationships. It may lead to higher productivity and efficiency, which improves your bottom line.
In-house operations come with expenses such as office supplies, utilities, and other overheads. By outsourcing, your provider takes over all the operational costs and overheads. It allows you to maximize your budget and allot your resources to other business areas.
There will always be routine tasks that property management companies need to do. But as the company grows, these repetitive functions can stack up fast. Below are some of the property management tasks you can outsource:
Rent collection, accounting, and tenant applications are routine yet fundamental tasks. While these may seem straightforward, they are pivotal to the company’s success. Other administrative tasks you can outsource include:
Outsourcing administrative tasks can increase efficiency and boost productivity. For instance, your outsourced team can ensure tenant data is always updated. They can handle scheduled appointments to avoid missing potential business opportunities.
Keeping properties safe, habitable, and attractive is one of your main responsibilities. Outsourcing repairs and maintenance tasks ensure that your properties are well-maintained. It also guarantees that all lines of communication are open for tenant requests. A dedicated team can enhance tenant satisfaction by handling these issues at any time of the day.
Marketing and sales involve promoting and advertising rental properties. These efforts increase occupancy rates and attract new tenants. Tasks under this umbrella can include developing strategies, lead generation, and more. Outsourcing them can guarantee effective marketing of properties to prospects.
Outsourcing back office services can be a game-changer for property management companies. Get your outsourcing journey off to a smooth start by keeping these seven steps in mind:
Determine back office tasks that take up most of your time or are too complicated to handle in-house. Tasks like accounting, lease management, or tenant screening should rank high on your list. Other common property management pain points include customer service, maintenance coordination, and accounting.
Identify what your outsourcing goals are. For instance, do you want to improve efficiency and reduce costs? Are you looking to reduce processing time from weeks to days? Whatever your business objectives may be, identifying them can help you assess which back office tasks to outsource.
Choose an outsourcing company with a proven success record in your industry. You can gauge a potential outsourcing partner’s competency by asking for referrals, conducting interviews, and reading reviews and testimonials.
Develop a plan for transitioning your tasks to your outsourcing partner. Outline timelines, training needs, and key performance indicators (KPIs) to measure success. Let’s say you’re outsourcing accounting tasks. Your outsourced team should have proper training on the accounting software you’re using. They have to know your reporting standards to make the transition process smoother.
Set clear expectations about deliverables, deadlines, and quality standards. Conduct regular meetings with your outsourcing partner. Use this time to discuss progress, challenges, and areas for improvement. Clear and consistent communication ensures everyone is on the same page. You can also adjust strategies when the need calls for it.
Use KPIs to assess your outsourcing partner’s performance. For example, you decided to outsource your tenant screening process. Application processing time and tenant quality are some of the metrics you track. Adjust your KPIs as you see fit so the collaboration continues to meet your standards.
Even after the transition process, stay involved to ensure things run smoothly. Regular check-ins and a good feedback loop can help resolve issues. It’s crucial to address them before they become significant problems. If your team isn’t meeting expectations, discuss the gaps with your outsourcing partner and refine the process.
Choosing the right outsourcing partner can be challenging with many outsourcing companies available. So here are three tips to help you narrow your options and find the right outsourcing partner in no time.
Conduct thorough research and scour the internet for reputable providers. Since outsourcing is an investment, you want to get the most value for it. Opt for a partner with a proven track record of success in the property management industry. Read client reviews and testimonials and seek recommendations from industry experts and peers.
Technology plays a key role in property management. In the digital age, focus on partnering with a company that utilizes advanced technology and software solutions. These can drive innovation, enhance efficiency, and simplify your processes.
Effective communication is one of the cornerstones of a successful outsourcing partnership. That’s why it’s essential to choose a provider that communicates proactively and keeps you in the loop every step of the way. Additionally, work with a company that values collaboration and considers themselves an integral part of your team.
Cutting costs could go a long way for property management businesses. It’s one of the main reasons why outsourcing has become popular nowadays. But before jumping in, you must find a reputable vendor to maximize its benefits.
STAFFVIRTUAL is one of the leading providers of back office solutions worldwide. From tenant screening to lease management, we’ve got you covered! With 15 years of experience, we have become experts in the field of outsourcing. Moreover, our stellar client reviews prove our track record of success.
With STAFFVIRTUAL as your partner, your back office operations will be more efficient, and your business will surely reach new heights. Are you ready to maximize the full potential of your property management business? Get in touch with us now!
Sources:
Business process outsourcing industry worldwide – statistics & facts
Global Outsourcing Services Market – Forecasts from 2022 to 2027
What is outsourcing? Definitions, benefits, challenges, processes, advice | CIO