The accounting for Real Estate Industries is having different type of challenges in comparison to other businesses. We experienced that daily accounting issues and operations are taking too much time and energy which are barrier for growing business revenue. Types of Real estate business are Property management, Commercial space, Residential property, Real Estate Investor and property rental business. Few challenges experienced in Real estate accounting or bookkeeping are:
- Errors/Mistakes in Accounting/Bookkeeping:
The most common errors we have experienced while doing accounting/bookkeeping for Real estate clients:
- Incorrect classification of expense/income
- Issue in separation of personal and business related transactions
- Issues in setup of payroll or classification of Payroll or Contractors payments
- Not proper reconciliation of Bank, Credit card and other accounts
- No proper record-keeping
- Chart of accounts were not properly setup
- Balances of Accounts receivable and Accounts payable were not properly reconciled
- Knowledge of rules and regulations
Every year rules and regulations are changing for real estate businesses but it is necessary for business owner to aware about all changes in rules and regulations or they can take assistance from professional accounting/bookkeeping firms.
- Payroll compliance
Mostly payroll setup on hourly or fixed salary basis but in Real estate businesses salary linked with commission of agents. It is necessary for business to comply with Federal and State laws.
- Property management software
Mostly Real estate business owner working through agents so they have to take assistance from other management software to track income and expenses. But these software are not suitable for accounting/bookkeeping.
With help of accounting/bookkeeping firms business owner can focus on the money generating portions of business like sales, marketing, and client service.