Realtor bookkeeping differs from a shop's or a trade's in how the money arrives and what it is. A commission comes in once a deal closes, often months after the work, net of the brokerage split and any referral fee, and the agent's income statement has to show the gross, the splits and the net or the year-end will be wrong. Alongside it sits money that is never the agent's, earnest money and escrow held for a client, which must not touch the books as income at all. This page explains those differences and the monthly handover, and the pricing calculator on this site prices the scope.
Commission income: gross, splits and net
A closing statement shows the total commission, the brokerage's share, any referral fee paid out, and what reaches the agent. The books should record all four, because the gross is what was earned, the splits are costs, and the net is what arrived. Booking only the deposit understates income and loses the deductible splits. An agent with several closings a month gives the bookkeeper the closing statements, and each becomes a set of entries rather than one deposit.
Costs by deal and costs by year
Staging, photography, signage, lockboxes and marketing for a specific listing are costs of that deal and are worth tracking against it, because the agent then knows which listings paid. Licence renewals, association dues, MLS fees, mileage, the phone and the home office are costs of the year. A bookkeeper who tracks the first set by listing produces a report the agent can run the business on; one who lumps everything together produces a return.
Money that is never yours
Earnest money, escrow and any client funds an agent or brokerage holds are trust money, governed by state rules and the brokerage's trust accounting, and they never appear in the agent's books as income or expense. The bookkeeper's job is to keep them out, and to reconcile any pass-through so that a deposit that was a client's money is not mistaken for a commission. Mixing the two is the error that ends careers, and a bookkeeper who has worked with agents knows it.
The monthly handover
Closing statements for every deal that closed, the brokerage's commission statement, the bank and card statements, receipts for listing costs tagged with the listing, and the mileage log. With those, a bookkeeper can close the month in a few hours; without the closing statements, the commission entries are guesses. The scope sheet on this site counts the items and the hours.
Questions people ask about realtor bookkeeping
Do I need a bookkeeper if my brokerage does the accounting?
The brokerage accounts for the brokerage. Your own income, splits, costs and return are yours, and the brokerage's statement is an input to your books, not a substitute for them.
How should commission splits be recorded?
Gross commission as income, the brokerage split and any referral fee as costs, the net as what arrived. The closing statement gives all of them, and the bookkeeper enters it as one set.
Is earnest money income?
No, never. It is a client's money held in trust, and it does not belong in your books as income or expense. If it passes through an account of yours, it is a pass-through and must be reconciled out.
What records should a realtor keep?
Closing statements, commission statements, receipts for listing and business costs, the mileage log, and the bank and card statements, for the years the IRS names. Keep them by deal and by month, and the year-end is a report rather than a search.