Working in property means dealing with large sums of money on a regular basis. That’s true whether you run an estate agency that employs commissioned sales people; manage commercial or residential property for clients; handle the accounts of a home owners’ association; or provide residential sales and rental services.
It goes without saying that if you want to run a successful real estate business, you need to take your accounting seriously and the COVID-19 crisis has reinforced the urgency of using every possible resource to help you get ahead.
- ESTABLISH A SOLID ACCOUNTING FOUNDATION
Engaging an accountant that specialises in real estate accounting will give you an immediate advantage. Gone are the days when an accountant merely ‘did your books’ and ‘filed your taxes.’ A real estate accounting specialist will understand the regulatory and financial environment in which you are operating and will help you identify the opportunities for maximising your profits while minimising potential risks to your bottom line.
In this way, they’ll be able to help you structure your business in the most tax-efficient way; give you guidance on how to reduce expenses; use online accounting software to share updates, reports and forecasts with you; provide more accurate asset valuations; and help prepare a financial plan that will minimise the risks to you in times like these. In short, the right finance professional will save you more money than they cost you.
- USE TEAM COMMUNICATIONS TO IMPROVE FORECASTS
If your team works remotely and completes tasks while they’re out, look at using online property management software for your real estate business. It will mean that your employees can work from anywhere, at any time, on any device – which is a real advantage in the property industry.Many accounting software applications can be integrated with your property management software. If your software is streamlined and in sync, you’ll be more efficient and be able to offer superior service to your clients, and you’ll have a better understanding of your potential earnings for your own forecasting and cashflow purposes.
- RAISE YOUR GAME IN THE CLOUD
Given the complex nature of real estate accounting, you need the right tool for the job. This isn’t something that can be managed using a spreadsheet. You’ll want software that’s easy to use yet capable of handling all your transactions. Online cloud accounting software packages such as Xero and Receipt Bank can help you :
- Update your accounts securely from anywhere.
- Quickly and easily share real-time financial data with your accountant.
- Automate much of the work, with scheduled payroll and direct bank feeds.
- Reduce your IT expenses because no extra servers required.
Like many aspects of business, your level of preparation influences your chances of success. Choosing the right accounting software will save you time, hassle and money as your business grows.
- KEEP YOUR DATA SAFE AND ACCESSIBLE
Real Estate, aside from stringent best-practice requirements, is one of those industries that receives intense scrutiny from government and tax officials. An audit by SARS or the Estate Agency Affairs Board (EAAB) can be a stressful time for your business – and an expensive one.
Add to that the new requirements of the Protection of Personal Information Act (POPI), now it’s even more important that you keep your records safe and accessible. Good accounting software will help you do this, with an audit trail of every transaction. This simplifies the audit process and you can immediately call up any record for inspection.
The real estate businesses that will succeed in 2020 are the ones who plan well, and take accounting seriously. With careful control of the figures, you can build a solid business that stands the test of time.
Do you need more information about the cloud accounting and payment solutions most suited to your real estate business? You can book a call or appointment so that we can talk, obligation free, about your business needs, or send us an e-mail to get the conversation going.