Payroll and Real Estate – Simply Real Estate Accounting
Whether you run a real estate agency or manage properties for clients, real estate accounting can be complex. But it doesn’t have to be that way. Re-Leased, a cloud-based property management software company shares some tips for making it easier.
Well-managed real estate accounting is vital
Working in real estate means dealing with large sums of money on a regular basis. That’s true whether you:
• run a real estate agency employing commissioned salespeople
• manage commercial or residential real estate for clients
• handle the accounts of a housing association
• run a building construction firm
• manage an investment trust
• provide residential sales and lettings services.
In all of these roles, well-managed real estate accounting can make all the difference. Mistakes could cost you (or your clients) a lot of money.
Read below how property management software can save time and ensure data is up-to-date.
Understanding the issues
The real estate industry forms a major part of the national and global economy. Accounting regulations are designed to:
• make the most of real estate’s contribution to GDP
• encourage wealth creation and distribution through investment
• try to prevent a repeat of the mistakes leading up to the global financial crisis of 2007.
The regulations in force don’t always achieve these goals – but they are the rules that you must follow. In particular, some countries now have stricter rules about:
• ownership transfer and identification
• money laundering
• valuing commercial and residential real estate
• offsetting expenses
• land, property, and inheritance taxes
• managing and accounting for clients’ funds.
With all these regulations, it’s sensible to seek assistance if you’re new to real estate accounting. Before you even start your new business. talk to us here at NT Mason & Co Ltd.
There are many rules to bear in mind, and we will help you follow them. We will also be able to:
• structure your business in the most tax-efficient way
• give you guidance on how to avoid unnecessary expenses
• use online accounting software to share updates, reports and forecasts with you.
Paying your staff
Real estate businesses often hire staff based on commission, or a percentage of the rental income they manage. Some use a combination of a fixed salary plus commission.
For agencies, in particular, it makes sense to offer salespeople commission for completed sales. This is a big incentive for them to work hard. However, commissions can make payroll more difficult, since your staff payments will fluctuate.
You can make this simpler by using accounting software that has payroll features built-in. Completed transactions can be assigned to particular staff members, with commissions calculated automatically.
Remember, commissions are subject to income tax. It’s important to keep track of the figures so you withhold the right amount of tax.
Work from anywhere with cloud-based software
If your staff work remotely or complete tasks while they’re out and about on a job, look at using online property management software for your real estate business. It will mean that your employees can work from anywhere, at any time, on any device – which is a real 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 be able to offer superior service to your clients.
Let the software do the hard work
Given the complex nature of real estate 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’s easy to use yet capable of handling all your transactions. Choose smart online cloud accounting software, because then you can:
• update your accounts securely from anywhere, even when on-site with clients
• quickly and easily share real-time financial data with your accountant or bookkeeper
• track your portfolio’s performance from anywhere, anytime – on any device
• automate much of the work, with scheduled payroll and direct bank feeds
• reduce your IT overheads – no servers required
• powerful reporting.
Like many aspects of business, your level of preparation influences your chances of success. Choosing the right 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 a real estate professional
If you want to run a successful real estate business, you must take accounting seriously. That means using every possible resource to help you get ahead.
Working with us will give you an immediate advantage. Using online accounting software is also important. Combining this with integrated property management software will streamline your accounting work and provide you with more time to 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 accounting seriously. With careful control of the figures, you can build a solid business that stands the test of time.
Talk to us today.
© 2020 by NT Mason and Co Limited.