As a real estate agent, your goal is to help connect as many buyers and sellers of properties as you can to maximize your revenues. If you thought closing a sale was where your job ended, you are on the wrong track. Every sale that you complete needs to be accounted for as per the guidelines laid down by the Internal Revenue Service (IRS).
If you don’t have a professional accountant, it’s time you hired one because incomplete or no accounting books could be disastrous for your business. If you want to know how to go about hiring a professional accounting firm, here are some valuable tips:
The pandemic has been a game-changer, and you need to have a digital presence to survive. A property buyer or seller will prefer a virtual inspection compared to an in-person site visit. Gone are the days of visiting the client physically; it’s now Zoom or Skype calls. Your site will possibly have a secured payment gateway to enable clients to pay your commissions.
While choosing an accounting firm, technology is a deciding factor. Ideally, the firm should facilitate cloud-based accounting and use software that easily integrates with your systems infrastructure. Ensure that the accounting firm has experience with the latest accounting software that provides you with the information you need as a business owner. Cloud-based software also ensures access to accounting information whenever you want it. You can log in to check the information using your mobile phone with app-based software.
The latest software will also help maintain client and vendor records so that you are up-to-date with your accounts receivables and accounts payable. You can also get information about your cash flows in real-time and plan your payments and collections accordingly.
When it comes to specialization, there are accounting firms that have sector or industry-specific experience. There are two levels of filters that you need to apply, the first one being the industry and the second one company-specific needs. You need to shortlist accounting firms with real estate experience.
Do your homework and spend time or consider fellow realtors for choosing accounting firms in real estate. These firms will know best accounting practices for real estate firms and ensure you comply with all accounting regulations as per IRS guidelines.
The number of years of experience also counts. The firm should have at least 10 to 15 years of experience, or the founders should have that many years of experience before they started the firm. If the firm is less than five years old, check promoter experience.
OHI is heavily focused on Real Estate as they are the largest business verticals, accounting for a majority of its business. They currently serve four of the largest US based developers and property management companies, working for 75000+ units.
Tax Planning needs to be done at the beginning of the financial year and not at the last minute when filing your returns. The accounting firm you choose needs to provide tax planning strategies to help minimize the tax outgo and ensure higher post-tax profits.
The firm will chalk out the tax-saving plan at the beginning of the year so that when you file returns, all the supporting documents for claiming tax benefits are ready with you. It will also save you the stress of a last-minute search for tax-saving documents.
Apart from guiding you on accounting regulations so that you get IRS-compliant accounting records, the accounting firm should also provide advice on effective business strategies for higher profits.
They should be able to analyze your books of accounts and find out how the business can be operated more efficiently and profitably. Check for advisory services in the real estate business before you finalize the accounting firm.
The experience of existing clients is your best bet when it comes to assessing the quality of your accounting firm. Find out what the clients have to say about the services of the firm in terms of quality and efficiency.
Most well-known accounting firms have the reviews of their clients on their websites, so a good starting point for you would be to check their websites for such reviews. Only when you are sure about the experience of the firm’s clients appoint the firm for your business.
The accounting firm should be dealing with small, medium, and large clients to help you with your current accounting needs and help in your future accounting requirements. As you scale up your business, your accounting firm should also have the expertise in handling your additional responsibilities.
Check the services provided by the accounting firm so that you can create a long-term relationship with them.
The right accounting firm can make a positive difference to your real estate firm. Your accounts will be maintained as per proper accounting rules relating to your industry, and you will get advice on how to plan your taxes as well. You can focus on improving the existing customer experience and acquire new clients.
OHI is a fifteen-year-old real estate services company working with 50+ commercial and residential real estate developers, funds and property management companies across USA. Our deep expertise in real estate accounting, financial analysis, lease administration and asset management has helped clients cut associated costs by 40-50%. We now provide these services to a portfolio of 75000 units across clients.
We invite you to experience finance and accounting outsourcing through us.