3 Bookkeeping Tips for Real Estate Professionals

Real estate professionals need to manage a number of things, and effective management is one of the important aspects of their job. If they aren’t able to manage their business effectively, it will not only result in a loss for business but for those as well who have invested in real estate through them.

Bookkeeping is one of the most important parts of this business, and they need to make sure that the books are properly managed. Any discrepancy in the records can result in considerable losses. There are different bookkeeping tips that can help realtors keep their business running smoothly.

Some Important Bookkeeping Tips for Realtors

We have compiled some important tips for professionals in the real estate industry. These are given as follows.

Separating Personal and Business Finances

The first thing that a realtor needs to keep in mind for better bookkeeping is to separate their personal and business finances. It is one of the basic considerations for accounting and bookkeeping professionals. If they are unable to keep track of these two separately, it might result in a mess that can’t be managed.

It is better to keep the money for each separately and keep track of it along with the expenses. A good option can be maintaining an Excel sheet that will help manage the complete details of the incoming and outgoing money. It not only saves time but will also reduce the chance of errors.

Keeping Copies of the Receipts/Documents

There is a need to maintain copies of the receipts and documents regarding money and other essentials. It is specifically important in realtor bookkeeping. If the realtor doesn’t have vital records like receipt copies and other documents, they can’t prove something in legal courts in case of possible problems.

Apart from that, they need to maintain the record for customers and business use. Thus, you need to ensure that you keep copies relevant to finances and other transactions.

Separation of personal finances and business finances has other benefits as well. It demonstrates that your business is distinct from your personal finances. It will also be clear to tax authorities, and you won’t have to face possible problems.

Categorize Expenses

There is a need to strictly manage finances in a categorized manner. The realtor needs to maintain different categories, which can be done through MS Excel sheets. It can also be done using other tools, but Excel is relatively easy to use and available on different platforms.

If you are able to categorize your income and expenses, then it is easy to calculate the taxes that would incur your business. The lower your taxable income is, the lower taxes you would have to pay. Some of the possible categories of expenses are given as follows.

• Advertising
• Insurance
• Commission
• Legal Fee
• Mortgage Interest
• Cleaning and Maintenance, etc.

Thus, when all this is combined, it will ensure that you don’t lose personal money and the matter is managed properly.

Conclusion

Bookkeeping is important for realtors. They need to do it in a professional manner by considering the priorities and then keeping the details. We have given some tips which can be of help to realtors.