Make operations more efficient
Within a real estate company, the key functions are generally, marketing and customer relationship management. But, accounting for real estate owners should be just as important, a lot of transactions and huge fees are involved in it. In such a scenario, outsourcing is the best option.
The TOP issues within the real estate industry
1. Knowledge of rules and regulations
Each and every year rules and regulations are being altered for real estate businesses. This is absolutely necessary for business owners be to aware of all changes in rules and regulations. Fortunately our accountants are up to date on all the changes taking place in a variety of industries and locations. This can mean staying in compliance when it comes to payroll and payroll process. Most payroll is setup as hourly or fixed. This differs with real estate business, which is linked with commission of agents. This is necessary for businesses to comply with Federal and State laws. This can also relate to property management software's your company utilizes. There are many useful management software programs that can track income and expense, but these software programs are not fully suitable for accounting and bookkeeping purposes.
2. Errors/Mistakes in Accounting/Bookkeeping:
In a real estate business, there are a variety of costs which must be properly classified to ensure the maintenance of proper financial records. Typically, this factor is ignored. The most common errors we have experienced while doing accounting and bookkeeping for our Real estate client. Incorrect classification or expense/income. This can really put problems on your books, especially if you are reconciling the account for the year and filing your taxes. Another typical issue is the separation of business and personal related transactions. Some business owners make the mistake of keeping the same accounts for personal and business purpose. This makes an evaluation of profits and expenses difficult. A very common issue we've come across is lack of proper record keeping. It's imperative to keep business related documents for an specific time period, but some documents you should keep forever. Click here to check what documents you need to hang on to. Lastly, when you set up your chart of accounts, in your industry there are expenses that are necessary to be categorized properly. If your chart of accounts isn't set up properly, this can cause financial problems throughout the years. We know the ends and outs of real estate accounting and how to make sure your company is set for success.
3. System for recording entries
There are several ways to record transactions in your books. If you can afford one, you might hire an accountant or bookkeeper who offers real estate accounting services; however, most professionals with smaller operations use accounting software for making accounting entries. Compared to using spreadsheets for your accounting, accounting software is designed to simplify, organize, and easily showcase all of your company's transactions. Additionally, many accounting software programs are cloud-based. This means that you can access, update, and modify your information from anywhere with an internet connection. But you have to be cautious and continually make sure that you are updating your accountants with correct information and records.
4. E-commerce & Logistics
The U.S. Department of Commerce estimates that $123.7 billion of retail sales were completed through online platforms in 2018 Q1, accounting for nearly 30% of all retail commerce net of automobile and gasoline sales. As retailers cope with this changing landscape, several big name stores have announced waves of store closures, while others open new locations. Commercial real estate will be directly impacted by these shifts in retail strategy. These ongoing changes are the direct reason that contingencies need to be in place during times of developmental and property delay. The real estate industry is forever fluctuating, having the right accountant who can advise you on how to prepare for slow seasons is imperative to your company's success.