The Best Ways to Maintain Real Estate Accounts
Real estate businesses have many things to manage, whether keeping up with clients, finance, or growing personal business networks. Unfortunately, real estate accounting is an essential and least favorite task for investors. However, accurate accounting can efficiently help you increase profits by tracking income, expenses, and tax deductions.
Below find out the real estate industry experts views on the best ways to maintain accounts of real estate businesses.
Cloud based tools
One of the easiest and most effective ways to maintain real estate accounts is using Zoho Books. This cloud-based tool helps to automate accounting workflows for real estate businesses.
With Zoho Books, you can easily track down your bills and organize expenses. Automating the expense generation for repeating expenses, you can manage your bulk expenses easily. As you can reduce the manual entries, you need to invest minimum time and effort in it. The app allows you to attach your bills, credit notes, and receipts to expenses just by scanning the documents to make things even easier. Thus, this amazing app helps businesses and individuals manage their accounting needs without requiring much professional help.
- Dustin Fox, Owner / Realtor
Not mixing up personal assets with business funds
Accounting is paramount in a business by managing the company’s financial information, which is essential in making decisions for the business.
We have done the bookkeeping by setting the account chart to track payments and expenses used in marketing and house flipping. Regularly preparing the reports can help monitor the expenses, profits, and tax duties.
It is ideal not to mix up the personal assets from the fund used for the business. Keeping the documents organized is vital in financial documentation. There are accounting software available in the market these days which is an excellent tool for accounting automation.
Separating these funds by using separate bank accounts from transactions ensures that all the money we gain stays in one place. When real estate business owners fail to maintain separate accounts and don’t update or correct the books regularly, they may appear unprofessional in the client’s eye and miss several growth opportunities in the real estate field.
- Warner Quiroga, a Real Estate Investor
Reconcile Regularly
It is important to reconcile your accounts regularly to identify any errors or discrepancies early on. This will save you a lot of time and effort in the long run. Reconciling also helps improve accuracy and ensures that your records are up-to-date. Make it a point to be well-organized and systematic in your approach. This will help you keep better track of things and make the job easier when it comes time for reconciliation and analysis. Have a designated place for everything and file away documents as soon as they are received to save yourself a lot of time and effort in the long run.
- Peter Lucas, Owner of Relocate To Andorra
Maintaining a real estate account with accounting software
Managing accounts and making decisions wisely are very important in any business. However, the real estate business industry is unique and tricky. So, agents need to follow some accounting advice to stay organized.
Earnings calculation: Real estate agents earn from different sources. The incomes come from homeowners, banks, buyers, and other sources. So, they need a proper calculation, record, and tracking of their incomes. And the accounting system helps best in this matter.
Employee payment and taxes- Payroll software is a helpful way to calculate all staff salaries and commissions for an agent. Besides employees’ salaries, sometimes agents have to pay subcontractors too. And this accounting system supports them to report these all to the IRS.
- Vicky Noufal, Owner/Associate Broker
Select a suitable accounting method
Choose which accounting method you want to use. Most people select either cash or accrual. Then, separate your business and personal funds. Next, create a chart of accounts where you would separate your income from your expenses. You want to make sure you’re tracking and itemizing both your income and expenses.
Then, you’re going to reconcile. Be sure to keep all of your documents organized digitally, so you can find receipts, invoices, etc. easily. Lastly, generate accurate reports with a real estate accounting software such as FreshBooks, Stessa, or Appfolio.
- Isaiah Henry, the CEO of Seabreeze
Keep track of all receipts
Document all expenses with a slip. It does not take long for real estate to consume money that is supposed to be used for other expenses. Keep all receipts in records to protect oneself from careless spending and frivolous management decisions. Scan all receipts and add them into the records.
- Dan Barrett, Co-Founder of Pacific Precious Metals
Conclusion
The above-listed points stated that real estate accounting comes up with many regulations, and maintaining the accounts is not an easy task. Hiring real estate accounting services to help you manage your finances, choose a business structure, avoid unnecessary spending, and maintain your financial reports.
