Learn About Low Cost Bookkeeping for Real Estate Agents
Spend your time earning money, not accounting for it.
Most independent contractor real estate agents don't have to concern themselves with that many income and expense categories in their bookkeeping. Of course, you'll always want to double check with your accountant, but most of us can get by with just six categories:
- Commission income
- Real estate fees and dues expenses
- Real estate education expense
- Office expenses
- Marketing and advertising expenses
- Vehicle mileage and costs
You can have more or break these down into sub-categories. The point is that we really don't have or a very complex accounting system, but many of us spend way too much time and effort keeping track of our expenses. Over time, there's a direct correlation between how detailed our systems are and how lax we tend to become at keeping up to date with it. Then, late in the year, we spend many late night hours trying to gather receipts and input a long list of entries.
There should be an easier way...and there is.
What You Need in a System
The ideal system should allow you to end each day with all your records up to date. It should take less than 10 minutes a day of your time. Everything should end up in a database with little or no typing required, the system should be easy enough that you miss no expenses. These two systems cover most of those bases.
There are plenty of online accounting systems out there, including the very popular QuickBooks products, but FreshBooks.com has a lot going for it.
If you're making quarterly tax payments, you'll love the way FreshBooks creates a Profit and Loss Report on demand so you can see how you're doing this quarter or for the year. There's an app for your smartphone as well so you can keep up with your expense tasks on the fly. There's simply no need to create and maintain files by month, keeping all those receipts in folders. Technology lets you effectively throw them all into one "box" that you won't have to dig through later to find what you want.
You can set up FreshBooks to integrate with your bank and credit card accounts to automatically import expenses. This saves a ton of time and effort. Also, you'll miss fewer expenses this way.
But how do you keep up with all those small receipts, many for cash payments, that you gather during the course of your workday? This is where Evernote comes in.
When you incorporate the free version of Evernote, you can use your smartphone to take a photo of the expense or receipt and have it automatically saved into an expense notebook in the Evernote cloud account. This syncs with the desktop version and Android or iPhone apps as well. Your notes and expenses are with you everywhere you go.
The beauty of Evernote is that you can upgrade it to automatically index the text that appears in the photographs. If you buy printer ink at Walmart with cash, you're not going to have to worry about keeping track of that small register receipt. Just take a photo of it with the Evernote camera. It will automatically enter it in the Expense notebook or another notebook of your choice.
Evernote will index the text within a few minutes. Let's say that you need to find proof of that expense later, maybe for broker reimbursement. You can open Evernote in any of your devices and enter "Walmart" along with the amount or any other text, such as "printer ink," to pull up the receipt.
Technology makes our business expenses easier to track and locate later. We don't make our money doing accounting. We make it working with our customers and clients. Use today's great technology tools to free up more time to make money instead of accounting for it.