Managing real estate accounting is an essential function to further your company’s success. It allows you to track your cash inflows and outflows, evaluate your financial performance and maximize your tax benefits. Good accounting practices give you tools for effective business analysis, helping you stay ahead and move your real estate business forward.
At Marshall Jones, we understand how crucial accounting is for the real estate industry. To help provide resources for your success, we’ve put together these real estate accounting tips with some valuable ideas on managing your financial records.
1. Remember the Balance Sheet
While your income statement is important, make sure you give attention to your real estate balance sheet as well. Take the time to reconcile every balance and account with the supporting documents and schedules, so you have consistent, quality data on your transactions and accounts. Having an accurate record can save you time and effort later on if you or another party needs to access the information.2. Be Clear on Capitalization
2. Be Clear on Capitalization
Having the right capitalization process in place can help you move forward with your business. Go beyond capitalizing costs over a certain amount — it’s critical to maintain clear communication with construction and project managers and understand project progress as well. When you give careful attention to work-in-progress accounts and tenant improvements, you’ll be able to stay knowledgeable about the details of your real estate holdings. Ensure these buildouts have reached completion before you place them in service so your fixed asset schedule will be clean and accessible.3. Equity Is Important
3. Equity Is Important
Take the time to understand the real estate entity structure. After reading through your partnership agreements, special allocations and distribution tiers, make sure you have a thorough knowledge of the conditions and requirements. Keeping track of this data can help you handle operations and transactions more efficiently and make things easier for your owners and tax accountants. With in-depth insight regarding your equity situation, you’ll be able to take ownership of your assets and empower yourself to make strategic decisions in the future. 4. Conquer the Closing Statement
4. Conquer the Closing Statement
Ensure a clean start and finish to a property’s books by creating an accurate and comprehensive closing statement. If the task seems overwhelming at first, take it line by line and make sure you’re tracking each amount on your chart of accounts. Be careful to cover all necessary information, including appraisal fees, inspection costs, property tax deposits and loan origination fees.
Get Trusted Accounting Services From Marshall Jones
At Marshall Jones, we are always standing by and ready to help at any time. Accounting can be challenging, and we’re here to help you navigate the process successfully and efficiently. We can provide services for tracking and verifying invoices, recording and organizing receipts, handling accounts receivables, billing and many other financial requirements.
Marshall Jones Certified Public Accountants And Advisors are a group of professionals dedicated to serving our customers with integrity. Whatever you may need to manage accounting at your business, we offer trusted financial services so you can have peace of mind as you pursue your business endeavors.
If you’re interested in learning more about how we can partner with you, contact us today for more information.