When it comes to keeping track of clients, listings, finances, and expanding personal business networks, professional real estate agents have a lot on their plates. Success requires not only the ability to connect, sell, and close sales, but also a working knowledge of administrative best practises. While real estate accounting principles may not be the first thing that comes to mind for many agents, they can make or break your success. Accounting in real estate paves the way for accurate reports and records throughout the buying and selling processes. It also allows agents to secure their personal financial situations and stay organised for important tax collection and compliance activities. Real estate agents cannot afford to be surprised when it comes to good, strong accounting procedures. Whether you're a new or seasoned real estate agent or property management professional, the knowledge and tools in this guide can help you: 1) Improve your understanding of the foundation and importance of good accounting. 2) Discover the distinctions between bookkeeping and accounting. 3) Adopt industry best practices for how you manage your expenses 4) Simplify your processes to free up more time for critical business activities. 5) Discover the next steps in selecting a software or platform that works for you. Why Do Real Estate Agents Require Accounting Services? Effective accounting procedures are required for real estate agents for a variety of reasons, some of which are dependent on the type of real estate activities that a person manages. Whether you work on small-scale real estate transactions or large-scale corporate contracts, having the right accounting structure is critical. Real estate accounting is essential for several reasons, including: - The ability to gain a high-level view of your own financial situation - Insight into your company's year-over-year growth - The ability to manage your cash flow and spot potential red flags - Having a streamlined process for producing annual tax returns - Examining your outgoing expenses in order to make timely payments. Contact MERU ACCOUNTING for more methodology and bookkeeping practices.

1. Bookkeeping methodology for ABC Real
estate
The purpose of this document is to make up a standard working methodology for real estate
accounting. Organization can adopt accounting policies which is suitable for them
Here is suggested bookkeeping methodology for ABC Real estate:
 Mortgage account should be set up as a ledger account and not a bank account. Manual
journals are not possible in bank account.
 Recurring invoices should be set up for monthly rental collection. ( Freshbooks can be
discarded if it is being used)
 Payment methods can be set up to facilitate the tenants to pay online.
 Invoice should be set up from here so that invoices can be printed from Xero.
 What is Director account and why it is set up in Xero.
 Budgeting can be set up in Xero.
 Conversion balance and comparative balances need to be entered.
 Fixed assets can be set up for depreciation. Can import fixed assets if they are more.
 Need to check integration with Square up and Arthur online.
 Can use fathom reports for better reporting on monthly basis.
Tracking of Income per property:
 Income should be tracked per property based on class tracking for Real Estate.
 It is advisable that a separate bank account should be maintained per property so that the
expenses are easily allocated to that property.
Regular updating of books of accounts:
 It is advisable to update books of accounts every fortnight so that receivables can be tracked
and chased in timely manner.
 Recurring invoices should be set up so that the invoices are automatically created in
accounting system and are matched with the receipts.
Common pool of expenses
 General expenses which cannot be allocated specifically to a property should be assigned on
either of below basis to each of property:
o Proportion of rental income
o Area occupied per property
o Fixed portion of allocation

2. Software for receivables management:
 Along with accounting software it is recommended to use any of below software for
bookkeeping needs:
o Buildium: Buildium is used most in real estate. It is available in cloud environment
and it has property management features as well.
o Cozy: It is a free to use software which is helpful in receivables tracking. It has
integration with Stripe.
 Below are features that should be looked into while selecting an accounting software:
o Ability to manage Apartment, apartments, commercial properties, condominiums,
cooperatives, homeowner associations, residential properties etc.
o Ability to operate on Cloud environment
o Collect rents online
o Automatic invoicing
o Listing managements
o Alerts for software
o Expense management
o Vacancy Tracking
o Maintenance task