July 19 2017
No matter what segment of the real estate industry you belong — owner of an agency, a property management team, or the owner of residential or commercial space that you lease — the accounting for this particular industry poses a different set of challenges from most businesses. We’ve found that the daily operations and accounting matters take too much energy and time away from the activities that grow the business. Some of the challenges that real estate accounting poses are:
1. Understanding the regulations
With regulations dealing with valuations, expenses, ownership, taxes, and more, it's a challenge for owners to keep up. With regulations on the real estate agency changing yearly, it’s important for owners to work with a professional who can stay on top of these changes and make sure your business is staying compliant.
2. Payroll complications
Because most real estate agencies pay its agents a commission, it's of vital importance that your payroll is precise. Staff paychecks will fluctuate week to week, complicating payroll. A robust payroll system will calculate commission automatically. Keep in mind that commissions are subject to income tax, making accurate record-keeping a must. By partnering with your accountant, they may be able to take over the payroll for your business, ensuring accuracy and timeliness.
3. Managing a remote work force
Most real estate agents will be out of the office for much of the day. Cloud-based property management software can help keep all of your agents connected, so you'll have real-time information on transactions.
4. Accounting mistakes
The most common mistakes we've discovered when our real estate clients turn over their books are:
-incorrect classification of costs
-not separating personal and business accounts
-improper classification of employees
-lack of record-keeping
By capitalizing on the expertise of your accountant or CPA and their team and outsourcing your financial management, you can focus on the money-generating portions of your business — sales, marketing, and client service.
Get In Touch