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Real Estate Accounting

Real Estate Accounting Company & Services in the Philippines

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It’s a fact that every business needs a reliable accounting expert to handle the overall finances. Particularly in the real estate industry as it requires accurate reports to determine the progress of your business operations.

If you’re looking to hire a real estate accountant, you will learn the following core elements in this article:

  • Duties and responsibilities of a real estate accountant
  • Advantages of hiring accountants in the real estate business
  • Cost comparison of real estate accountants globally
  • Expert-recommended real estate accounting services
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What is Real Estate Accounting?

Accountant Calculating

Real estate accounting refers to the financial management of real estate investments. This typically involves tracking all of the financial transactions related to buying, selling, and renting properties.

Duties related to real estate accounting will certainly empower your business to manage finances effectively and optimize tax strategies. With a real estate accountant, you can make informed decisions for the overall success of your real estate ventures.

Understanding transaction-related accounting techniques is crucial for real estate professionals. Particularly to those who are dealing with large-scale property transactions.

Accountant Calculating

Are you ready to get started and hire now?

Are you ready to get started and hire now?

Duties and Responsibilities of Real Estate Accountant

The tasks and obligations of an accountant may vary depending on the company’s specific demands. The typical job description includes the following:

  1. Financial recordkeeping – Maintaining accurate financial records and bookkeeping for real estate transactions. This includes property purchases, sales, rental income, and expenses.
  2. Financial statement preparation – Preparing financial statements such as balance sheets, income statements, and cash flow statements. This helps provide an overview of the financial health of real estate investments.
  3. Tax planning and compliance – Assisting with tax returns, deductions, and compliance for real estate transactions.
  4. Budgeting and forecasting – Developing budgets and forecasts for real estate projects, tracking performance against projections.
  5. Cash flow management – Monitoring cash flow, tracking rental income, and managing expenses.
  6. Lease accounting – Handling lease agreements and calculating lease income and expenses.
  7. Cost analysis – Analyzing costs associated with real estate investments and identifying cost-saving opportunities.
  8. Financial analysis and reporting – Analyzing real estate investments, evaluating performance, and reporting to stakeholders.
  9. Risk assessment and mitigation – Identifying risks, implementing controls, and mitigating financial risks in real estate transactions.
  10. Collaboration with stakeholders – Respond to questions and support decision-making.
  11. Compliance and regulatory requirements – Ensuring compliance with accounting principles and industry regulations for real estate transactions.
  12. Advanced Technology: Utilizing real estate software and tools to streamline financial processes.

Advantages of Accountants in the Real Estate Business

The expertise of accountants in the real estate business can bring several advantages. Their contributions offer growth and success to real estate ventures.

Here are some of the perks of having a good accountant for your real estate business:

Typically, real estate business owners are more focused on sales. This can result in a lack of attention to detail when it comes to accounting. Accountants help you make well-informed decisions with their expertise, analysis, and insights. They contribute strategic ideas to extract the most profit and minimize risks in the real estate industry.

It's risky to overlook the return on investment (ROI) in your property management business. Knowing your revenue and income numbers by heart is crucial for running a successful business, despite the excitement they bring.

There are many pressures on real estate businesses. For instance, increased operating costs such as subscription fees, software expenses, and wages.

However, the commissions you charge are decreasing. And in some markets, property prices are declining. This can lead to lower transaction percentages.

Accountants assess risks' potential impact. This helps businesses make informed choices that minimize drawbacks and maximize returns.

While you may be excited about the returns, you could be operating on a slim margin of 10% or even lower. For a profitable and robust business, you need a reliable accountant to devise strategies for a desired ROI range of 20-33%.

Accountants analyze financial data related to real estate investments, projects, and properties. They assess the financial capability of potential ventures and evaluate costs and benefits. Most importantly, they determine the ROI.

Accountants assist in creating and maintaining budgets for real estate projects or ventures. They forecast income and expenses, taking into account various factors. This includes market conditions, financing costs, and operating expenses.

Real estate transactions have complex tax implications. Accountants with real estate tax expertise offer guidance on tax planning and maximizing benefits. They assist businesses in comprehending tax implications for decisions. This involves property acquisitions, sales, or rental income.

Typically, real estate business owners are more focused on sales. This can result in a lack of attention to detail when it comes to accounting. Accountants help you make well-informed decisions with their expertise, analysis, and insights. They contribute strategic ideas to extract the most profit and minimize risks in the real estate industry.

It's risky to overlook the return on investment (ROI) in your property management business. Knowing your revenue and income numbers by heart is crucial for running a successful business, despite the excitement they bring.

There are many pressures on real estate businesses. For instance, increased operating costs such as subscription fees, software expenses, and wages.

However, the commissions you charge are decreasing. And in some markets, property prices are declining. This can lead to lower transaction percentages.

Accountants assess risks' potential impact. This helps businesses make informed choices that minimize drawbacks and maximize returns.

While you may be excited about the returns, you could be operating on a slim margin of 10% or even lower. For a profitable and robust business, you need a reliable accountant to devise strategies for a desired ROI range of 20-33%.

Accountants analyze financial data related to real estate investments, projects, and properties. They assess the financial capability of potential ventures and evaluate costs and benefits. Most importantly, they determine the ROI.

Accountants assist in creating and maintaining budgets for real estate projects or ventures. They forecast income and expenses, taking into account various factors. This includes market conditions, financing costs, and operating expenses.

Real estate transactions have complex tax implications. Accountants with real estate tax expertise offer guidance on tax planning and maximizing benefits. They assist businesses in comprehending tax implications for decisions. This involves property acquisitions, sales, or rental income.

Learn how much a Real Estate Accountant cost

How will your Real Estate Accountant Work in Partnership with your Bookkeeper?

Cost of Real Estate Accounting

An accountant can work with your bookkeeper, ensuring that everything is entered correctly based on their advice. They create a chart of accounts to make sense for the accountant. But most importantly, it will be beneficial for you as the owner.

Real estate has specific areas where an ordinary accountant may lack understanding. For example, trust accounts, commission splits, and property advertising.

We have seen instances where property advertising gets mixed up with business advertising. These aspects should be treated separately. Property marketing expenses are typically billed to the seller and can be recovered. While business advertising costs should be categorized individually.

These are important to make sure you can have clear reporting and make good decisions. To ensure effective financial management, they can collaborate by:

Cost of Real Estate Accounting

These are important to make sure you can have clear reporting and make good decisions. To ensure effective financial management, they can collaborate by:

 The bookkeeper can enter data into the accounting software to keep track of daily financial transactions. This can help maintain accurate financial records and reconcile bank statements.

The real estate accountant can utilize the data maintained by the bookkeeper. This is so that they can generate comprehensive financial reports. They analyze financial information and prepare balance sheets, income statements, and cash flow statements.

The real estate accountant and bookkeeper exchange financial information and maintain accurate records. They collaborate to resolve any discrepancies and address financial concerns. As a result, they can provide a clear picture of the business's financial position.

The bookkeeper can enter data into the accounting software to keep track of daily financial transactions. This can help maintain accurate financial records and reconcile bank statements.

The real estate accountant can utilize the data maintained by the bookkeeper. This is so that they can generate comprehensive financial reports. They analyze financial information and prepare balance sheets, income statements, and cash flow statements.

The real estate accountant and bookkeeper exchange financial information and maintain accurate records. They collaborate to resolve any discrepancies and address financial concerns. As a result, they can provide a clear picture of the business's financial position.

Can Real Estate Accountants Work Virtually?

Real Estate Accountant Thinking

Yes, a property accountant can certainly work virtually. This is particularly because most of the duties can be accomplished online. However, it’s important to ensure that you have suitable systems in place.

A good example is providing software tools for effective financial reporting. At ShoreAgents, we take care of the following:

  • A well-defined job description to find suitable accountants for your real estate business. Afterward, we will present a shortlist of candidates for you to choose from.
  • A cloud-based accounting software for accountants to properly perform their tasks. This ensures that they are functional during work hours.
  • Human resources support and legal aspects of worker employment will be handled efficiently. Through a web-accessible HR hub, ShoreAgents manage panels for logged hours, employment contracts, leave requests, & worker tardiness among others. 
  • Gaining team buy-in and helping remote team members to feel engaged at work. ShoreAgents celebrates work anniversaries, and birthdays, and encourages activity clubs & monthly games.
Real Estate Accountant Thinking

Cost Comparison of Real Estate Accountants Globally

The primary factor affecting a real estate accountant’s salary is their location. Although there are other considerations such as skillsets, experience, and specific duties. This means that if they live in high-cost-of-living areas, their wages are likely to be high as well.

As a result, several companies globally look for offshoring options. Let’s take a look at the salary comparison of an accountant.

Note that the salary amounts displayed for other countries below exclude additional costs. In comparison to the wages in the Philippines, it includes government charges, benefits, and ShoreAgents’ fees.

Countries Local Salary ShoreAgents' Salary (Philippines) Cost Difference
Australia $90,052 AUD $27,575 AUD $62,477 AUD
United States $69,069 USD $18,577 USD $50,492 USD
New Zealand $81,420 NZD $29,880 NZD $51,540 NZD
Canada $73,632 CAD $24,526 CAD $49,106 CAD
United Kingdom £39,307 GBP £15,423 GBP £23,884 GBP
Singapore $68,830 SGD $25,412 SGD $43,418 SGD
Countries

Local Salary:

$90,052 AUD

ShoreAgents’ Salary (Philippines):

$27,575 AUD

Cost Difference:

$62,477 AUD

Local Salary:

$69,069 USD

ShoreAgents’ Salary (Philippines):

$18,577 USD

Cost Difference:

$50,492 USD

Local Salary:

$81,420 NZD

ShoreAgents’ Salary (Philippines):

$29,880 NZD

Cost Difference:

$51,540 NZD