CMO The Neat Company
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3 Ways to Streamline Real Estate Clients' Accounts

Jan 16th 2019
CMO The Neat Company
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help real estate clients prepare for tax season
help real estate clients prepare for tax season

As an accountant, sometimes it may seem you spend approximately 10 percent of your time preparing taxes and the remaining 90 organizing receipts, invoices and paperwork that your clients hand to you in a disorganized pile. If you service clients in the real estate industry, you may spend even more time sorting through stacks of shoeboxes to organize and categorize records of the many tax-deductible purchases your clients make throughout the year.

With the majority of their time spent on the road traveling to open houses, client meetings and print shops, real estate professionals tend to make more tax-deductible purchases than those in other industries, which means they can be among the most time-consuming accounts you serve.

Not only is it tedious, but the time you spend organizing receipts can also be a drain on your accounting practice’s revenue. Instead of taking on more clients with your high-value skills in tax preparation, you may be forced to push receipts for open house signs around your desk.

If you’re dreading another tax season spent organizing disheveled paperwork on behalf of your real estate clients, now may be a good time to consider recommending they start using cloud-based accounting software. This can help you cut down on the hours you spend preparing your real estate clients for tax season in these three ways: 

  1. Enable Your Clients to Record and Share Expenses Immediately

Some cloud-based accounting software applications allow your clients to snap a photo of a receipt as soon as they leave the printer shop with a stack of flyers, which means you don’t have to wait until the end of the month or quarter to learn about that expense.

  1. Categorize Expenses Based on Type of Purchase and Whether It is Eligible for a Tax Deduction

The IRS permits deductions for certain ordinary and necessary business expenses but forbids deductions from others (such as gifts over $25 or improvements made to a rental property). That’s why one of the most important ways you can ensure your clients maximize their deductions and reduce the risk of an audit is with cloud-based accounting software that allows you to categorize each purchase as it happens instead of waiting until later, when your client might forget whether that gas receipt was to travel to an open house or to visit family.

  1. Spend Less Time Pushing Paper and More Time Growing Your Business

As an accountant, you can offer high-value services to your client, and if you eliminate the hours you spend organizing and categorizing receipts, you can take on more, grow your business and offer a more seamless experience to your customers at tax time and throughout the year.

To select a cloud-based accounting tool that will help you keep track of the receipts for marketing mailers, open house signs, fuel costs, hardware and supplies for ordinary and necessary expenses and more, look for something that both allows real-time capture of receipts and advanced categorization of different types of expenses. Consider taking advantage of the free trial offered by several companies to evaluate different applications, and incorporate a training session into new client onboarding so you can be ready for tax season all year long.

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By Michael Abrams
Jan 19th 2019 19:16

While I agree that helping the client get organized is mutually beneficial, I don't have a problem charging a client $75/hour for bookkeeping to straighten out their records. The fee is high enough to get them to think about being more organized and high enough for it to be worthwhile to me.

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Replying to Michael Abrams:
By skinnyvinny
Jan 21st 2019 23:04

I agree. As long as a client doesn't complain about the fees I have to charge for the time I have to spend sorting records, I have no problem with so-called "slobs".

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