The real estate industry is dynamic and is driven by crucial factors such as infrastructure development, government initiatives, IT growth, etc. Amidst these ever-evolving dynamics, the key to achieving success and growth in the real estate industry is through managing real estate assets effectively. Industry experts say that following best accounting and reporting practices supports strategic decisions and protects your real estate business’s financial health.This article emphasizes the need for effective management of your real estate assets and the best practices in real estate accounting and reporting.
Best Practices in outsourced real estate accounting and Reporting
To establish an efficient and well-structured accounting system at your firm, one must ensure that they are following the principles of accounting and best practices recommended by industry experts.
We have listed down the best practices in outsourced real estate accounting and reporting for you.
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Monthly review of your accounts
The first step towards effective property management accounting is to ensure that your accounts are reviewed regularly and up-to-date. You can achieve this in two ways – employing accounting software or with the help of a professional accountant.
The advantage of hiring an outsourced real estate accounting professional for this task is that your accountant will proactively alert you in case there are any discrepancies in your reports. Your monthly report should cover all the metrics like balance sheet, general ledger, monthly income and expense statement, tenant receivables, accounts payable, etc.
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Use the right set of reporting tools
The accuracy and reliability of the reports will directly contribute to your ability to make informed decisions. Using the right set of reporting tools or software to generate trend reports will not only eliminate errors but also give you much-needed insights. All you need to do is select the right tool or software that works best for you and generate reports periodically.
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Ensure compliance with laws and regulations
As said earlier, one of the factors that contributes to the dynamics of the real estate industry is the government’s regulations and initiatives. Make sure that you are familiar with and aware of all applicable laws and regulations set up by your national and local government.
Having said that the system comes with compliance procedures already built into it, and having an outsourced real estate accounting professional, especially for this task will help you easily track the changes in regulations.
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Incorporate and practice good itemization
A best practice recommended by experts is to itemize your expenses and earnings, as they will differ. Once you start, make it a regular habit.
If you are already using accounting software for your real estate accounting, the automation functionality of your software will handle the itemization. In the case of manual accounting, you have to ensure that the itemization protocol is strictly practiced.
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Keep your business and personal accounts segregated
Last, but not the least, make sure to keep your personal account separate from your business account. Make sure that all your business transitions are routed to your business account first and the earnings can be transferred to your personal account later on.
You can do this activity on a pre-scheduled basis. Though both accounts will belong to you and be managed by you, having a separate business account will be particularly beneficial during the taxation period.
Conclusion
Ineffective asset management puts your organization at risk, especially during tax season. To secure your real estate business, streamline your accounting process effectively.
Streamlining accounting and reporting challenges large firms or those looking to scale. In such cases, partnering with an outsourced real estate accounting firm that offers tailored solutions makes sense.
If you are looking for someone who can help you with streamlining your firm’s accounting system, then you have landed in the right place! Outsourced Bookkeeping is an accounting service provider that has vast experience in accounting, taxation, and bookkeeping services. This organization is primarily based in the USA and has a wide client base in North America. Do visit the official website of Outsourced Bookkeeping company to know more about the services offered by the company.
