Good real estate agency accountingHere are some of the accounting activities that you should be doing in your real estate agency on a regular basis:
- Maintaining up-to-date records of all income received, including commissions, fees, rental income, and other sources of revenue.
- Recording all expenses incurred, including rent, salaries, office supplies, travel expenses, and any other costs related to the business.
- Reconciling bank statements to ensure accurate recording of transactions and that no transactions have been missed. Doing this can also help you pick up errors or fraudulent transactions.
- Keeping all invoices organized to track transactions with clients, vendors, and suppliers.
- Maintaining property records, including purchase price, sales price, taxes, and related costs.
- Maintaining payroll records to track wages, benefits, taxes, and other deductions for employees.
- Preparing a profit and loss statement and analyzing it monthly.
What other records do real estate agencies keep?Real estate agencies are legally required to retain a number of records, such as agency authorities, trust accounting records, audit reports, notifications of opening or closing a trust account, and other records that have been submitted to authorities. Records related to an agent’s representative, including police records, reports, and statutory declarations that were checked during their initial employment, must also be maintained.
Why is record keeping important in real estate?Good record keeping enables your accountant to prepare accurate financial reports, such as your P&L, so that you have a clear understanding of how healthy your agency is and where you can make improvements. It also gives your accountant the information they need to advise you in key areas. For example, at creditte chartered accountant and advisors, we help our clients by providing a profit and loss for each individual real estate agent so that principals can understand which agents are most profitable and then make better management decisions. Through business tax planning we also help save our clients significant sums of money throughout the year.
What is the role of an estate agent tax accountant?An estate agent tax accountant is a professional who specializes in helping agencies manage their tax obligations. They can provide guidance on tax planning, help prepare tax returns, and provide advice on tax-related issues. A property tax accountant can also help estate agencies identify tax credits and deductions, which can minimize tax liabilities.
How long to keep tax records?Estate agencies should keep tax records for at least six years. This includes income tax returns, bank statements, invoices, receipts, and other records related to tax obligations. The reason for this is that the ATO can audit a business’s tax records for up to six years after the tax return is filed.
Why do real estate agents need accounting?Good accounting is vital for real estate agents. Whether negotiating smaller property deals or large corporate contracts, a solid accounting structure, or a property tax accountant, is essential for several reasons, including:
- Gaining a high-level perspective of your agency’s financial health
- Identifying areas in your business that are losing you money
- Identifying the profit contribution of each agent and business unit
- Monitoring year-to-year business growth
- Managing cash flow and identifying potential financial concerns
- Maintaining fiscal compliance
- Saving you tax.