Why Real Estates Are Losing Money By Not Hiring Accountants
Understand the Intricacies of Financials With Our Accountants for Real Estate
The real estate industry has many details and can be quite hard with all the minor details. Since you’re dealing with properties, land titles, stamp taxes, and a whole lot more documents, you’re bound to miss a thing or two.
Often times real estate agents fail to keep records and monitor their cash flow properly. This results in expenses being understated and resulting in you paying more taxes. Sometimes it can even get you in really bad trouble.
That’s why you need a chartered accountant to help you with real estate accounting.
But where do you find a trustworthy accountant, you say?
Well, we’re here. Pearl Lemon Accountants can provide you with top-quality accounting services.
Talk with us over the phone so that we can answer your questions.
Real Estate Is Intertwined With Accounting
Many factors, including the specifics of the real estate activity under management, need sound accounting practices for real estate brokers.
Whether you’re involved in a modest real estate transaction or a multimillion-dollar contract negotiation for a huge corporation, setting up your books correctly is essential. After all, if you fail to seal the accounting legalities of a property, your deal is off the table.
Accounting for real estate is important for several reasons.
- Ability to take a bird’s-eye view of one’s own financial condition;
- A look at how your company has expanded throughout the years;
- Possibility of keeping tabs on your finances and keeping an eye out for warning signs;
- Having an easy system in place to generate tax returns annually; and
- Examining your outgoing expenditures to ensure on-time payment is essential.
The weeds of bureaucracy make it easy to lose oneself in financial data. Real estate agents should prioritise good accounting practices, despite the temptation to create excuses or avoid tedious money management responsibilities.
Real estate accounting’s ultimate purpose is to provide business owners with an accurate depiction of their company’s financial health at all times so that they may make educated, profitable decisions with respect to their company’s resources.
This doesn’t necessitate an in-depth understanding of all aspects of financial management. Still, it does call for openness to new information and the ability to adapt quickly to shifting circumstances.
Real Estate Accountants Keep You Within Legalities
As we have seen, real estate accounting is crucial in a number of settings.
Whether you’re selling inexpensive homes as a hobby or providing property management services that bring in millions, you’ll benefit from a solid accounting background. They may vary in size, but their fundamental routines remain the same.
Whether your business is just starting out or has already achieved substantial success, the following items are among the most crucial to monitor.
Commission-Based Wages and Salaries
Agents in this industry make money through commissions on property deals they facilitate. Real estate professionals must carefully record, monitor, and report all cash flows from these sources since they represent the principal source of revenue.
Instead of using several systems to keep track of different types of compensation, it is recommended that you just utilise the accounting software you already use.
Office Expenses
In addition to the standard office supplies and equipment required for your job duties, you may have to utilise other administrative tools and equipment. An example of a larger expense would be renting office space, renting event space, or paying for recurring services such as cleaning and maintenance. Increasing numbers of real estate professionals are operating in the mobile format, which may make these costs cheaper than expected.
Affiliation Costs and Contributions
A real estate agent’s commission may be split between them and their brokerage or business as a percentage, depending on their employment position. This amount is considered an expense. Membership dues to national trade groups and associations are another expense frequently incurred by those working in real estate and may be deducted.
Education Expenses
Renewing a real estate licence and participating in required continuing education courses are both financial commitments. Don’t forget to incorporate these expenses into your annual budget to avoid future problems.
Advertising Costs
Advertising and marketing are the methods you use to inform people about your products and services. The following expenses can be incurred when you market your property online:
- Event sponsorships
- Print and newspaper advertisements
- Website design and development
- Business cards
- Social media management
- Online and digital advertisements
Travel Expenses
To sell a property, speak with a client, or monitor a network of properties, you must travel from property to property. You may also eat or drink coffee on your way to your prospective client. Ensure that these numbers are included in your real estate accounting procedures.
Work With Professional Accountants for Real Estate
Our licensed accountants do more than keep books and do accounting. We can also take care of your taxes, which means we can do the following:
Organise Your Taxes
Our professional chartered accountants and tax advisors will arrange the tax credits, deductions, business expenses, and exemptions you qualify for. Our experienced tax experts will ensure that your company’s tax return and bill are filed on time and follow HMRC rules.
Tax Planning On A Global Scale
No matter your international tax situation, we can help you pay as little tax as possible in the UK and abroad.
How much tax you have to pay in a foreign country will depend on how you set up your personal and business life there. We’ll come up with a unique plan to help you pay less in taxes all over the world.
Our certified public accountants and tax professionals can help you or your business avoid paying too much tax in the UK or elsewhere.
Services for Payroll
With payroll services from Pearl Lemon Accountants, you can put your workers to work on more profitable tasks and stop worrying about management accounts, payroll, pensions, and compliance.
It’s good to know that your company’s payroll follows the laws and rules, which are constantly changing.
We know a lot about how outsourcing payroll works and the different parts of it. We’re not a computerised solution or accounting software, so your paycheck gets the care that’s made for you.
HMRC Tax Investigation Assistance
If you’re unsure if you can handle a tax investigation or audit on your own, you should get help as soon as possible.
We can help if you’re having trouble with VAT, PAYE, your self-assessment tax return, income tax, corporation tax payments, or anything related to HM Revenue & Customs.
We will do everything we can to keep you from dealing with the HMRC tax inquiry.
Personal Tax Preparation
Our tax experts will help you handle your taxes so that you don’t break the law. We can help you with your personal tax return and inheritance tax (if any). People in the UK can file their taxes in a way that is just for them.
This tax return service tries to help you get more money and pay less in taxes.
Make Life Easier With Pearl Lemon Accountants
Life is already complex and complicated. Why make it more complicated? Pearl Lemon Accountants not only make things simpler and more manageable, but we also make sure you increase your profits.
We have a lot more in store for you, though, because these are just a few of our services.
We’d love to answer your questions directly, so why don’t we sit down and have a chat?
Book a call with us today.
FAQs
Do accountants for real estate need to be Certified Public Accountants?
No, you don’t need to be a CPA to work as a property accountant unless you have to file documents with the Securities and Exchange Commission or want to start your own business. But getting this certification could still be helpful since it will show employers that you are committed to the job.
What is real estate bookkeeping?
In real estate bookkeeping, a person enters financial information about a company into a computer system. To keep track of how your business is doing and how it makes and spends its money, you will need a bookkeeper who will enter all the data into a financial program. A certain level of record-keeping is necessary for every financial transaction undertaken by a business to be recorded– and this is what bookkeeping does.
Do accountants for real estate handle delinquent accounts and collections?
Some companies may have their property accountants deal with overdue accounts and even work with lawyers to evict tenants and collect overdue accounts. It depends on whether the company rents out homes or only sells and buys homes.
When you're thinking about starting a building company or your career as a builder, an innovative financial strategy is essential, rooted in accounting basics.
If you have an effective financial plan, you can reduce your administrative duties so they do not overshadow your customer relationships and ability to work independently. You can use accounting basics to reduce your company's costs, increase your profitability, and minimise your tax liability when you establish this strategy early in your company's lifecycle.
So if you want to build up your business's account, you need an accountant by your side.
We can be that accountant for you. Contact Pearl Lemon Accountants today!