Financial Planning: Do You Need an Adviser?
There are plenty of tools that can help you manage your business expenses, but you may find that nothing beats hiring a professional.
October 30, 2015
You can’t ignore the numbers. They paint the picture of whether your business is profitable, how well it’s growing, and where you should invest in the future. Every real estate professional needs a system for organizing and managing financial details, and while there’s a lot of software out there that can track expenses and offer accounting services at the click of a button, the best tool may not be technological.
You want a solution that won’t take too much time away from your real job: selling real estate. Some accounting programs are simple, standalone solutions, but depending on how complicated your expense reports are, they may not cover everything you need. Other solutions are fully integrated real estate management suites, and they could take a long time to master. You may be better off handing the financial details of your business over to an expert.
More to Know About Financial Planning
What Your Tools Should Do
When shopping around for accounting solutions for your business, make sure they won’t be too time-consuming to learn.
Products on the Market
From standard to real estate–specific options, these are your best options.
Mike Parker, CRS, GRI, a sales associate with Huff Realty in Florence, Ky., says he made the move early in his career to hire professional help for managing his business finances. “When you start making money, one of the first people you should think about bringing on board is a bookkeeper,” he says. Parker pays about $12,000 a year for these services, which he says is “money well spent.” One invaluable tip his bookkeeper gave him was to simplify expense tracking by using a credit card exclusively for real estate purchases and activity. “It makes it easy for accounting. All we have to do is log into my account, and everything I’ve spent for the week or month is right there,” Parker says.
Outsourcing his recordkeeping, Parker has more time to concentrate on listings, sales, and prospecting. But he still takes an active role in financial planning. He sits down with his financial adviser regularly to compare his business’ past performance to present activity and plan for the future. “If you want to grow, you need to know what you’ve done,” he says.
If you’d rather take the lead in planning your business finances, you could use an accounting program to keep everything in order but lean on a finance professional for additional support and insight. Cheryl Ritchie, ABR, GRI, associate broker at RE/MAX Leading Edge in Annapolis, Md., uses QuickBooks to keep her expense records updated, but she meets with a financial adviser once a month — at $60 an hour — to make sure she didn’t miss anything.
“My brain is wired for real estate,” Ritchie says. “My adviser gives me another layer of accountability and has taught me how to resolve problems and get more from the software.” Her adviser has helped her set up accounts and income and expense categories in QuickBooks and learn shortcuts to operate program features easily. Ritchie’s adviser has even analyzed the reports she generates, such as expenses versus budget, to help her better learn where to invest in her business in the future.
Even if you decide to use technology to take care of all your accounting yourself, the right solution should be an investment that pays for itself, ensuring no financial detail is missed while allowing you to focus more on income-generating activities.