Real estate and property management bookkeeping can become pretty complex when you’re managing properties for clients or running a real estate agency. It really doesn’t have to be that way. Re-Leased is a cloud-based property management software company, and they have shared some of their own tips for making real estate bookkeeping much easier.
Well-managed bookkeeping is vital in real estate and property management
When you work in real estate, you are regularly dealing with large amounts of money, whether you:
- employ commissioned agents in your real estate agency
- provide clients with residential or commercial management services
- handle the management of residential or commercial associations
- provide services in building construction and development
- management investment portfolios or trusts
- are involved in commercial and residential leasing and sales
Real estate bookkeeping that is managed well can make all the difference in these situations. Unnecessary mistakes and poorly managed bookkeeping could cost you, or your clients, a lot of money.
Re-Leased knows how real estate and property management software can both ensure your data is always current and be a tremendous time saver.
About Paying Your Staff
Real estate businesses often hire staff or agents based on commission, or a percentage of the rental income they manage. Some use a combination of a fixed salary plus commissions.
For agencies in particular, it makes sense to offer salespeople and agents a commission for completed leases and sales. This is a big incentive for them to work hard. However, commissions can make payroll more difficult since your staff payments will vary.
You can make this simpler by using bookkeeping and accounting software that has payroll features already built in. Completed transactions can be assigned to particular staff members or agents, with commissions automatically calculated.
Just remember, commissions can be subject to income tax withholding, so it’s important to keep track so you withhold the right amount of tax.
Work From Anywhere with Cloud-Based Software
If your staff works remotely or completes tasks while they are out and about on a job, look at using online property management software for your real estate business. It will mean that agents and employees can work from anywhere, at any time, on any device. This is a great advantage in the property industry.
Make sure your business uses software applications that integrate with your property management software. When your software is streamlined and in sync, you’ll be more efficient and able to offer superior service to your clients.
Keep Your Data Safe and Accessible in Case of an Audit
Real estate and property management businesses are sometimes targeted for audit by the government. This can be a stressful time for your business, not to mention an expensive one. Government officials will go through your accounts with a fine-tooth comb. They will be looking for things out of the ordinary and asking a lot of questions.
These audits could happen at any time, so it’s extremely important that you keep your records safe and accessible. Good real estate bookkeeping software will help you with this and leave you with an audit trail of every transaction. This greatly simplifies the audit process as you are able to pull up any record for their inspection.
Don’t Forget to Count the Costs
One of the biggest parts of real estate bookkeeping and accounting is financial reporting. When you’re managing properties and associations for your clients, there is a lot to take into account. The same is true if you have a building construction business.
It’s vital to your business to be thorough when you’re accounting for the operational expenses of another person. If you fail to account for every cost, you or your clients could lose money. Make sure you understand the rules and regulations of your real estate commission when it comes to permitted expenses.
Hiring a great bookkeeper makes ultimate sense here. Your bookkeeper will deal with your accounts on a daily basis to keep all the figures current and accurate. Your bookkeeper will help to ensure that every transaction is accounted for and every cost recorded.
The Right Software Does the Hard Work For You
Given the complex nature of real estate and property management bookkeeping and accounting, you need to use the right tool for the job. This isn’t something that can be managed using a spreadsheet. That’s not what spreadsheets were designed to do.
You need software that is easy to use, yet capable of handling all your transactions. Choose smart, online, cloud-based bookkeeping and accounting software that will allow you to:
- update your accounts securely from anywhere, even when you’re on-site with your clients
- easily and quickly share real-time financial data with your bookkeeper and/or accountant
- track your portfolio’s performance from anywhere, any time, on any device
- automate much of the work, with scheduled payroll and direct bank feeds
- reduce your IT overhead because you no longer require servers
- produce powerful reporting
Like many aspects of business, your level of preparation influences your chances of success. Choosing the right bookkeeping and accounting software will save you time, hassle and money as your business grows. Ensure you weigh up your options before you decide. It will make all the difference to your portfolio performance.
Be What you Started Your Business to Be – a Real Estate Professional
If you want to run a successful real estate or property management business, you have to take the bookkeeping and accounting seriously. That means using every possible resource to help you get ahead. Hiring a great bookkeeper and accountant will give you an immediate advantage. Using online bookkeeping and accounting software is also important. It will allow you to work closely with your bookkeeper and accountant.
Combining this with integrated property management software will streamline your bookkeeping and accounting work, and provide you with more time to concentrate on your profit and grow your business.
Fortunes are made and lost every year in real estate. The people who succeed are the ones who plan well, and take their bookkeeping and accounting seriously. With careful control of the numbers, you can build a solid business that stands the test of time.