If you are a sales agent, you may not need all the complex tools available in products like Xero. Quickbooks Self Employed is a great bookkeeping package that helps you keep personal and business expenses real estate accounting separate, and generate reports and tax forms at the end of the year. A suitable accounting system for your portfolio should take into account the unique aspects of your real estate business.
A real estate account takes responsibility for the financial aspects of the buying, selling, leasing, and renting of real estate properties. Also known as property accountants, this position also plays an important role for preparing documents for tax season. Like any other accounting practice, accounting in real estate is used for many reasons. One of the chief reasons is to provide an accurate and clear picture of the overall health of a business.
Cash Flow Improvements
Most agents assume that spending money on credit cards and with debit cards provides enough documentation to substantiate the expenses in case of an audit. However, the IRS is very strict on documentation requirements for travel and meal expenses. Because realtors do a lot of traveling, it is crucial to keep good records.
For example, if you keep a marketing agency on a monthly retainer to maintain your real estate website, you will factor this expense into your OPEX. It doesn’t matter whether you sell a dozen houses this quarter or none—you’ll still need to pay the flat marketing fee. Additional OPEX listings include https://www.bookstime.com/ rent, a lease on a work vehicle, and utilities like internet fees or your electric bill. Fortunately, you don’t need an accounting background to be successful in real estate—but you should have a general understanding to help you make the best strategic decisions for your real estate business.