Skip to content

How to do real estate accounting

Written by

Last editedOct 20222 min read

First we cover a couple of general accounting principles which must be adhered to, then there are some specific aspects of real estate accounting in greater detail in the next sections. The general principles are:

  • organising and securing all data and documentation

  • separating business and personal finances

Organise and secure all data and documentation

First and foremost, always keep your data and documentation safe and accessible. Obviously it helps to have your documents organised for your own purposes, but it is also important in case you become subject to an audit. Real estate businesses are sometimes targeted for audit by government tax inspectors, who examine the accounts in fine detail in search of any anomalies.

Keeping digital records of every transaction via real estate accounting software is probably the easiest and most reliable way of preparing for an audit. It also helps you reconcile any contracts, expense receipts and other important documents with your own book.

Separate business and personal finances

Always keep your business and personal finances separate. This is sound advice in any situation, and especially so if you use an LLC for your real estate property management business. This doesn't just mean day-to-day monies and cash flow, but also savings. Business savings and personal savings are entirely different and must never be confused.

Pay for your personal expenses only with your personal credit card, and pay for business expenses only ever with your business credit card.

Ensure compliance

There are many rules and regulations to understand and abide by in real estate accounting, and it is absolutely vital that you do so. You would be well advised to seek expert advice from a professional accountant in order to fully understand each aspect of compliance. This is true even if you knowhow to do real estate accounting and plan on taking care of it all by yourself.

When seeking expert advice, find an accounting firm that specialises in real estate accounting, as they are better placed to give you the information you need immediately. They can also advise you on how to structure your business in the most tax-efficient way and even how to avoid unnecessary expenses.

Real estate accounting software

In this digital age, the best way to keep your data organised and secure and your business compliant with all regulations is to use real estate accounting software. This has multiple advantages to make real estate accounting much easier.

For example, if you have a team who either work remotely or need to complete tasks offsite, online property management software suitable for a real estate business keeps everything on track. Offsite employees can input data from wherever they are and from their preferred device.

There are many options when selecting real estate accounting software, so decide what features you need before you choose. It must be easy enough to use and yet powerful enough to handle all of your transactions. It also needs to be smart online cloud accounting software so you can update your accounts securely from anywhere. Choose the software that lets you quickly and easily share real-time financial data with relevant parties.

It is a big help if the software lets you automate many of the tasks, such as direct debit payments or scheduled payrolls. Xero real estate accounting software does all this and more, allowing you to easily keep track of your financial status to more accurately evaluate the financial situation of the properties you’re managing.

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.

Over 85,000 businesses use GoCardless to get paid on time. Learn more about how you can improve payment processing at your business today.

Get StartedLearn More
Interested in automating the way you get paid? GoCardless can help
Interested in automating the way you get paid? GoCardless can help

Interested in automating the way you get paid? GoCardless can help

Contact sales

Try a better way to collect payments, with GoCardless. It's free to get started.

Try a better way to collect payments

Learn moreSign up