As a real estate agent, you wear a lot of hats. You manage clients, negotiate deals, prepare paperwork, show homes, post listings, coordinate contractors, and even find time to market yourself. You are a business owner who is solely responsible for its success. While you may embrace the daily hustle of being an agent, part of running a successful business is the less-glamorous task of keeping track of your cash flow and expenses as you go along.

Having your books in order is important for several reasons, including the obvious need to assess and understand the financial health of your business and make adjustments as needed. Knowing where you stand financially can help you stay out of debt by avoiding pitfalls like investing too much in non-essential expenses or spending money that should be earmarked for tax payments. In general, keeping your finances accurate and up-to-date will keep your business thriving and lower your chances of an audit from the Internal Revenue Service.

And while it may seem daunting, even those lacking formal accounting experience can easily avoid the tax-season scramble by committing to tracking their financial records throughout the year. Let’s simplify the process!

What You Need To Track

The categories you are tracking may change depending on your area(s) of focus within real estate and how you manage your business, but as long as you can account for money spent (expenses) and money earned (income) you will be in a good place come April 15. Here are some common types of transactions and activities that you should be sure to log along the way:

  • Commission Income: Any fees earned in making a sale or closing a deal.
  • Real estate fees and dues: MLS fees (setup/ongoing), license fees, brokerage fees, business insurance, etc.
  • Education expenses: Classes, conferences, trade shows, etc.
  • Office expenses: All office supplies used for work and/or brokerage office fees
  • Marketing expenses: Websites, business cards, advertisements, etc.
  • Workers: Payments to those who provide your business with a service, such as contractors, marketers, or coaches
  • Vehicle mileage: Track your miles while you are on the road for work. 

How You Should Track

One of the best things you can do for your business’ finances is to establish a business bank account to serve as the hub for your real estate transactions. All income and expenses should go through this account to help reduce the confusion of separating business and personal cash flow.

Once this account is established, you will also be able to link it to an accounting app (suggestions provided below) that would pull in your transactions as they occur. Most apps then allow you to categorize your transactions to help you get a clearer picture of how your money is being used within your business. Here are some of the most-recommended apps and software for this purpose: 

  • QuickBooks – QuickBooks offers a variety of options depending on your needs. QuickBooks Self-Employed is recommended if you operate mostly as an independent contractor without employees, whereas QuickBooks Online offers more robust accounting tools for larger operations. We love that mileage tracking is built into the QuickBooks mobile apps for easy integration into your end-of-year deductions.
  • FreshBooks – FreshBooks touts itself as the all-in-one small business invoicing and accounting solution. As a cloud-based service, you can access FreshBooks from your desktop or phone, and they aim to combine ease-of-use with powerful (and sufficient) data that can be handed over to your accountant if needed.
  • Realtyzam – Realtyzam is easy-to-use accounting software built with real estate agents and their unique expense-tracking needs in mind. One of the unique features in Realtyzam is the ability to run reports that include real-estate-specific information, such as your average commission, buyer and seller conversion rates, and which lead sources generate most of your sales.

While we recommend utilizing an accounting app for their ongoing automation and data reporting, this can also be done manually if that’s your preference. A few suggestions if you go this route:

  • Set time on your calendar to dedicate to your finances on a regular and recurring basis.
  • Create a spreadsheet to house all of your necessary data, and use tabs to differentiate various categories of your business transactions (i.e. – Income, marketing & advertising, office expenses, etc.). Provide brief and clear notes alongside your transactions if they need additional clarification or context.
  • Keep track of your receipts with an app like Evernote or Shoeboxed. This will allow you to store and provide proof of your transactions if needed.

Working with an Accountant

Regardless of how you track your own financial data, it may be worth working with an accountant who specializes in the real estate industry as tax day approaches. While you may feel comfortable doing taxes yourself with a program like TurboTax, working directly with a professional who truly understands the intricacies of the real estate business is your best option for maximizing your deductions and ensuring a comprehensive submission of your tax documents. Even if you do choose to work with an accountant, diligently tracking your finances throughout the year will alleviate stress and confusion during tax season, and will reduce the amount of time your accountant needs to spend piecing your financial puzzle together – ultimately saving you money.


Make tax time easier on yourself by establishing a process, committing to maintaining your books (online and off) regularly throughout the year, and diligently recording where your money is going. When this important facet of your business is taken care of you can take steps to ensure that your real estate operations are healthy and devote more time and energy to serving your clients.