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The last ten years have seen an increase of more than 200% in market capitalization in the United States of America. This is so much turnover in a single country meaning that people have to deal with a lot of regulations and other financial complexities for the market to be maintained.
That being said, all businesses should invest in financial professionals to help and guide them in their legal and financial requirements. One industry that can leave people confused is the real estate industry.
To start with, taxes are complicated in the real estate industry. A slight mistake in tax remittance can lead to grave consequences for real estate brokers and agents. This is something that has made CPAs very important. But what is a CPA?
What is a CPA?
A CPA (Certified Public Accountant) is a professional accountant who is tasked with providing financial consultancy to individuals and businesses. In countries such as the US, CPAs belong to a professional body, such as the American Institute of Public Accountants.
Some states in the US and a few countries around the globe do not allow people to be called accountants if they are not CPAs. CPAs’ job description is wide. Some services they provide include financial accounting, estate planning, corporate governance, corporate finance, attestation and assurance services, financial planning, financial analysis, governmental accounting, tax planning and preparation, financial reporting, and income tax, among others.
Looking at all these services, a real estate agent needs a CPA that they can trust. These are sensitive services that require a professional.
Why Every Real Estate Agent Should Have a CPA They Trust
Preparation and Filing of Taxes
Preparing and filing taxes is one of the most difficult things for real estate agents. Apart from CPAs, you are not likely going to find someone else who enjoys it. CPAs take and look at every single transaction that real estate agents have completed in a year and then file them appropriately.
This is a requirement in most countries and real estate businesses have to be tax compliant. This means that you have to document all your financial activity throughout the year – another task that requires a lot of vigilance.
Again, CPAs can help with this. They make sure that real estate agents have recorded their financial activities as required and guide them on how to do it. This is a sensitive area, meaning that real estate agents need a CPA they can trust.
Taking Real Estate Financial Records
Apart from the preparation and filing of taxes, real estate agents need to understand the health of their agencies especially when it comes to finances. They need to generate and understand things like balance sheets, retained earnings statements, and profit and loss statements, among others.
With these documents, a real estate agent can get insights into the performance of their agency at any time. However, real estate agents are professionals in their field, meaning that they cannot generate or understand these documents on their own.
They, therefore, need CPAs to handle these tasks for them. A CPA will not only generate these documents for a real estate agent, but they will also explain what the documents mean. This is private information, meaning that agents need a CPA they can trust.
Insights into Saving Money and Making Right Decisions
Sometimes, real estate agents want to understand the impacts the decisions they make have on their agencies and business in general. Even though some of them might follow their gut feelings, this does not always pay.
They need CPAs that they can trust to help them make the right decisions. For instance, when taking a loan, they need the help of CPAs who use business loan calculators such as the one at KeeperTax to understand all payments, interest rates, and any other information that the agents might need to consider before taking the loan.
In addition, CPAs work with and understand numbers. This means that when helping agents make business decisions, their advice is based on the numbers, something that makes it accurate compared to agents having to follow their gut feelings.
Broadening Professional Network
As discussed above, CPAs are professionals who belong to a professional body. They also work and interact with other professionals in their line of duty. For instance, let us assume that you have found yourself in a legal situation that needs a lawyer.
You also have a CPA who you trust and who handles your financial needs. Did you know that this CPA can get you one of the best lawyers in their circle and even negotiate the rates for you?
Well, CPAs work with other professionals such as insurance agents, lawyers, and notaries, among others. You will be able to join this network if you have a CPA who you can trust.
CPAs play a vital role in the life of real estate agents. They are also instrumental in the success of a real estate business. As you can see above, it is always good to make sure that you have one that you can trust.
