ESTATE ACCOUNTING
As a property manager, you probably know that there are a lot of moving parts to real estate accounting. Especially in this industry, bookkeeping tasks can be very tedious because of the large number of state regulations and myriad of transactions. That’s why organization is the key to managing real estate accounting books.
So what do you need to get started? Well, you need a standard process to collect financial information. You need to choose an accounting method. You need to create a consistent filing and tracking system. You need to know how to pay your employees and your contractors.
Who uses real estate accounting?
Real estate accounting is used for property management. When you work in real estate, you deal with large sums of money and it’s important to understand how to manage these transactions. You should familiar with real estate accounting if you run a real estate agency, manage real estate for clients, handle the accounts of a housing association, run a building construction firm, manage an investment trust etc.
THE MEASURES:
As a real estate bookkeeping can be difficult and time consuming, you must follow many state-mandated rules and handle large transactions.
By learning how to complete some real estate accounting tasks, you can reduce the number of hours an accountant spends on your books.
THE ACTIONS:
1. To help their clients or employers, real estate accountants prepare financial and reports for variety of real estate transactions, which can include property sales, rentals, leases and time-sharing. Reports may include items such as development expenses, operational cost and profits.
2. They may also provide investment analysis and planning for organizations seeking to acquire and develop property. Real estate accountants can coordinate appraisal, asset evaluation and capitalization activities.
3. Real estate accountants provide financial strategies and prepare reports on behalf of property owners and real developers. They participate in planning, investment, budget and tax reporting activities. Accounting professional generally must complete a bachelor’s degree program and be licensed in their state.
DECISIONS
1. Investing Decisions
Fundamental analysis depends heavily on a company’s balance sheet, is statement of cash flows and its income statement.
2. Lending Decisions
Financial accounting is also a key for lenders. Because financial statements outline all its assets as well as the short and long-term debt, lenders get a better sense of a company’s creditworthiness.
REFERENCES:
Sharp v. Lush (1879), Ch.D. 468, apld, Re Goldlust Estate, (1991).