Are you starting a real estate business? Or maybe you’re an established firm looking for better ways to manage your numbers. Whatever the case, our easy guide can get you started on building or improving your accounting software or system, so you can keep track of real estate transactions with ease.
Who needs a real estate accounting system?
Let’s start from the beginning.
Broadly, a real estate accounting system is relevant for:
- Real estate brokers and agencies providing sales or letting services
- Management companies for residential or commercial properties
- Construction or property development firms
- Investment trusts that hold properties in their investment portfolio
What does a real estate accounting system do?
An accounting system keeps track of your real estate activities and financial transactions. The information captured within the system can help you run your business and work out, amongst other things:
- How well your business is doing and whether it’s growing
- The amount of money you’ve made
- How much tax and other charges you should pay
- Whether you’ve got enough cash to pay staff and bills
- Which business areas are performing well and which can be improved
So how do you build a sound accounting system for your business from the ground up?
The Chart of Accounts for real estate brokers is a good place to start.
Set up your Chart of Accounts
A Chart of Accounts is essentially a list of general ledger accounts where you record financial transactions. You can look at it as an organisational tool designed to help you break down transactions into: