No matter whether you are a property management company, owner of a real estate agency, real estate agent, REIT or an investor group, accounting for real estate industry is challenging. Real estate bookkeeping and accounting process consume a valuable time and efforts of owners, which they can utilize in planning future strategies for the growth of their business.
Some of the real estate accounting hitches faced by entrepreneurs:
1. Understanding the industry-specific accounting regulations
It's the biggest challenge for real estate owners to keep themselves updated with changing rules and regulations that impact the valuations, ownership, taxes, and a lot more. As these regulations change yearly, so it’s important for owners to hire real estate accounting firm who are familiar with such changes and can keep you ahead of the competition.
2. Issues in Payroll Processing
Payroll process should be precise because most of the real estate agents or brokers or property managers are on a commission basis. For an agency, its little bit confusing in processing payroll every month as the staff paychecks fluctuate weekly. Real estate accounting firms have robust system or software for calculating these commissions, but without human intervention how you can ensure accuracy.
By hiring a virtual accounting firm or accountant you can easily get rid of these process and expect accuracy in the reports that too on time.
3. Difficult to track the expenses
In real estate industry, working by sitting in an office is not possible. The owners or agents or brokers all are in the field on different sites. In such cases, it is not possible to track the agent’s performance and their expenses.
Cloud-based property management software can help to keep all of your agents connected, so you'll have real-time information on transactions. The most appropriate solution is to outsource real estate accounting services and you can ensure accuracy.
4. Common bookkeeping and accounting mistakes
The most common accounting mistakes done by the real estate clients are n-separation of personal and business accounts, false classification of costs, inaccurate classification of employees, improper record keeping.
By partnering with an accounting company or outsource real estate accounting services, you can focus on core business and generate higher revenue. Call at +1 646-688-2821 or email to info@cogneesol.com for a detailed discussion.
