Bookkeeper for Real Estate Agents

Should I record my commission at closing or when the check hits?

Record the commission on day the check is in your bank, not the day the sale closes. That's how cash flow works. Your brokerage gets its share, then sends you yours at speed. If you book the income at closing, you'll show profit you can't spend and your P&L won't match your cash balance.

Some agents also want to keep eye on the deals that closed but haven't paid yet. That's a separate report called 'work in process.' For the books you use for taxes and spending, phot copy cash.

We also track the split. Your brokerage cut, your commission, and any referral fee to another agent have to show as separate lines. That way at tax time you know exactly what came in and what was passed along.

What expenses should I really track?

All of them, but start with the ones that eat the most of your revenue. The IRS keeps data from tax returns of real estate agency sole proprietors. Here's the typical piece of each expense category, as a share of total revenue, based on those filings:

The biggest line is 'other.' That's the catch-all for licenses, fees, memberships, E&O insurance and the other paper. If you drop every expense into that single category, you won't know the cost of a license versus your marketing. Good bookkeeping means breaking it out.

Marketing is another that deserves its own line, because your best listings often come from a lead. A typical marketing budget runs 10% of gross commission income, but that's planned, not a rule.

How do I keep from falling behind when I'm in a busy period?

Keep the books on the same cadence regardless of how many dealals you close. When you're seeing clients and writing offers, bookkeeping is always the last thing you want to do. But if you let two or three months slide, you'll end up with a two-hour phone call with your accountant at year end, trying to sort out which mile was for which house.

A bookkeeper who understands what it's for the trade will work monthly, not after the quarter. You log in at end of the month, you see exactly your commission, what you spent, and what's still to be received. That requires only an hour of your time.

And when deals do happen, your books should reflect it that month. The month after a flush month, you'll see profit spike. That's normal. But without a monthly close, you can't know if the spike is a jumping or a lull.

How do I handle the car and driving exactly?

Use the IRS standard mileage rate for a deduction. For 2025, it's $0.70 per business mile. That's the simplest way to capture car expense. You log every date, the miles, and the purpose. It's a deduction that's often bigger than your insurance, so it's worth doing right.

You have two ways to deduct your car: the standard mileage rate, or actual expenses like gas, maintenance, depreciation. Pick one and stay with if you've took standard in the first year, you can later switch to actual in later years but not the other way around. Most agents that do a lot of the same pattern end up with mileage.

A driving mile is business if there's a legitimate purpose. We'll never count your travel to office as a business mile. What we do excuse, we'll track the rest, but you need a log. Even a photo of your milometer or a calendar note is enough if it's a app.

What should my chart of accounts look like?

A chart of accounts that only has 'comes' and 'spents' isn't any. You need lines that show trip, really:

• Income: Commission-Ftraditional an Commission, Referral Income, and So on
• Expenses split: License and Dues, E&O Insurance, Marketing Comaan, Membership, Padding, Cleaning, Trang, and Stock
• For each expense category, go that split so you can compare a single cost to your revenue

The chart is the foundation of your books. Set it right on day one or when a bookkeeper comes in: we have the chart set to what your MLS and your brokeragem structure. No more 'misc' and 'other.'

Which reports tell me if my business is healthy?

Two reports each month: the profit and loss statement and the cash flow statement. The first shows your network. According to the same IRS data, the typical single owner real estate agency has about a 42% net profit margin. That's not a guarantee; it's a benchmark. Yours might be lower or higher, but you want to know yours.

The cash flow statement shows where your money is at. It helps because your commission are not regular payroll. You'll see a batch of activity for two months and then a drop. If you don't keep a cash buffer, you'll spend the quiet months in the red.

A balance sheet is also part of monthly good, but with a noncash business, the first two deliver the insight you can use to plan your next hiring step or a bigly ad budget.