February 23, 2024

Streamlining Brokerage Finances: Strategies for Year-Round Efficiency


Person reviewing finances | Streamlining Brokerage Finances Strategies for Year-Round EfficiencyPerson reviewing finances | Streamlining Brokerage Finances Strategies for Year-Round Efficiency

Effective financial management is a cornerstone to the success and sustainability of any brokerage. With the complexities of transactions, commissions, operational expenses, and the looming tax season, keeping finances in check is crucial to keeping your agents and clients happy — and preserving your sanity. As we kick off the New Year, it’s a great time to check in with yourself and your business to make sure you’re set up for success and avoiding unnecessary manual work, now or at tax time. Let’s explore some practical strategies and digital solutions to help you streamline financial processes and save you headaches all year long.

1. Implement an Integrated Accounting System

  • Automated Bookkeeping: Utilize digital accounting software designed for real estate brokerages. These systems can automatically track income and expenses, categorize transactions, and provide real-time financial insights.
  • Digital Invoicing and Payments: Shift to digital invoicing and payment systems to streamline transactions, reduce paperwork, and keep track of receivables and payables efficiently.

2. Regular Financial Reviews

  • Monthly Check-ins: Financial errors tend to multiply when you ignore them. Conduct monthly financial reviews to monitor cash flow, review budget variances, and address any discrepancies promptly.
  • Quarterly Audits: Schedule quarterly audits to assess the financial health of the brokerage, ensuring that you’re on track with annual financial goals and budget.

3. Effective Commission Management

  • Commission Tracking Software: Commissions can be tough to manage, especially if you’re working across multiple offices or more complex team or franchise structures. Implement a solid commission management software designed for real estate to accurately track and distribute commissions, reducing errors and saving time through automation.
  • Transparent Agent Statements: Provide agents with clear, detailed statements of their commissions and deductions, fostering trust and transparency within the brokerage.

Pro tip: MoxiBalance generates commission reports for agents on a self-serve basis, so you don’t have to lift a finger to ensure your agents are empowered with their earning data.

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4. Embrace Cloud-Based Solutions

  • Data Accessibility: Use cloud-based financial management systems for easy access to financial data anytime, anywhere, ensuring that you and your team can make informed decisions with the most up to date information.
  • Data Security: Cyber-attacks and online threats are on the rise. Because a brokerage’s reputation is everything, it’s critical to ensure that the cloud solutions you choose offer robust security features to protect sensitive financial data.

Read more on cybersecurity tips here>>

5. Budgeting and Forecasting

  • Annual Budgeting: Create a detailed annual budget, factoring in all potential expenses, projected income, and market trends.
  • Regular Forecasting: Update financial forecasts regularly based on current market conditions and actual financial performance to maintain a realistic view of the brokerage’s financial future.

6. Expense Tracking and Management

  • Digital Receipt Management: Utilize digital tools for tracking and managing expenses. Applications that allow you to scan and store receipts digitally can simplify record-keeping and ensure easy access come tax season.
  • Cost Analysis: Regularly review and analyze expenses to identify areas where costs can be reduced or where spending is not aligning with budget expectations.

7. Preparing for Tax Season

  • Organized Record-Keeping: Maintain organized records throughout the year, categorizing each transaction correctly. This practice minimizes the effort required to prepare for tax filings.
  • Tax Planning Strategies: Work with a tax advisor to implement strategies that can minimize tax liabilities, such as taking advantage of applicable deductions and credits.
  • Stay Updated on Tax Laws: Keep abreast of changes in tax laws that could impact your brokerage, especially those relating to real estate transactions and 1099 workers.

Read about our top Tax Season strategies here >>

8. Utilize Customer Relationship Management (CRM) Systems

  • Financial Data Integration: Use a CRM system that integrates with your financial software, allowing for seamless tracking of client transactions and related financial data.
  • Automated Reminders: Set up automated reminders for important financial deadlines, including tax deadlines, rent collection, and bill payments.

9. Training and Professional Development

  • Financial Literacy: Provide training for your team, especially those handling financial tasks, to ensure they are proficient in using the financial tools and understand best practices in financial management.
  • Build processes for any manual inputs: Your cloud-based system is only as effective as the data you put into it. Automate as much as possible, but for manual inputs like expenses, be sure to create processes that make it easy for your agents to stay on top of their data and help you better forecast cash flows.
  • Continuing Education: Stay informed about the latest financial management trends and tools through webinars, courses, and professional networking.

10. Outsourcing as a Strategy

  • Professional Services: We love technology, but if implementing an online financial system doesn’t work for you, consider outsourcing certain financial functions, such as payroll processing or bookkeeping, to external professionals. This can free up your time to focus on core business activities.
  • Technology Consultants: If you implement new software solutions to manage your finances, working with technology consultants can ensure a smooth transition and proper integration with existing systems.

Pro tip: When you get MoxiBalance for your brokerage, we’ll set you up for a successful implementation with an expert team on hand to help, as well as extended Bank Reconciliation and accounting audits. 

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For real estate brokers, efficient financial management is not just about keeping the books in order; it’s about creating a foundation for sustainable growth and success. The key to staying on top of it all (while keeping your cool) lies in regular financial monitoring, embracing technology for automation and accuracy, and staying informed about financial management best practices. With these strategies in place, your brokerage will be better positioned for financial health and resilience in an ever-changing real estate market.

Calm The Chaos

MoxiBalance is built to handle brokerage operations with ease at any size, so however you want to grow, your back-office always just works.

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