The 8 Best Real Estate Accounting Software Tools (2023 Updated!)

Real Estate Accounting 101: 60-Second Primer

Real estate accounting software is a comprehensive, all-in-one financial logging, management, and auditing solution that can help you scale your business. In the real estate sector, you want to keep track of your books and expenses so that you can easily manage your taxes and plan for any down times in the industry. Most online systems come with invoicing, expense management, reporting, cash-flow monitoring, and client management features.

Real estate accounting involves the financial management and record-keeping of real estate transactions. It helps track income, expenses, and profitability. Here’s a quick primer:

1. Income: Real estate accounting involves recording rental income, lease payments, and other sources of revenue related to property ownership.
2. Expenses: It includes tracking expenses such as property taxes, insurance, repairs, maintenance, utilities, and property management fees.
3. Depreciation: Depreciation is the gradual decrease in the value of a property over time. It’s an important concept in real estate accounting for tax purposes.
4. Cash Flow: Real estate accountants calculate cash flow by subtracting expenses from income. Positive cash flow indicates profitability.
5. Financial Statements: Accountants prepare financial statements, including income statements, balance sheets, and cash flow statements, to provide a snapshot of a property’s financial health.
6. Tax Deductions: Real estate accounting tools help identify tax deductions, such as mortgage interest and property taxes, which can reduce taxable income.
7. Capitalization Rate: The cap rate is used to evaluate the potential return on an investment property. It’s calculated by dividing the property’s net operating income by its value.
8. 1031 Exchange: Accountants assist with 1031 exchanges, which allow investors to defer capital gains taxes by reinvesting proceeds from the sale of one property into another.

Most of the best accounting software for real estate agents is available as a web-only solution, with the back-end deployed in the cloud for backup. This makes it easy for users to access their day to day financial data from any device on the go. Agents can also invoice, add expenses, or view important reports without having to log on to their desktop or laptop. Real estate accounting software helps agents save a lot of time and money while improving productivity levels. The goal is to provide a digital interface that performs most of your financial transactions. It’s also best to find a system that automates some of the most routine accounting chores like reconciliation and transaction matching.

For real estate agents and brokers, you can sometimes find free accounting software options that will have the basic features you need to keep your finances in order. These are good options to get started with as you work to grow your business, and then you can easily upgrade to a paid plan as you need to.

What to Look for in Accounting Software for Real Estate

There is a wide range of accounting software for real estate out there to help you fulfill all of your bookkeeping needs. Some come with more perks than the rest, but here are some basic features you should look for before committing:

Payroll and accounting management systems

Payroll software is a comprehensive solution that addresses your business’s accounting requirements. It combines payroll management with essential accounting tasks, offering a range of features and reports.

With payroll software, you can efficiently handle accounts receivable and accounts payable, track expenses, accurately calculate employee salaries, generate cash flow reports, and set up reminders for late payments. Moreover, certain software providers allow customization to accommodate industry-specific needs, enhancing the software’s suitability for your business.

Enterprise resource planning systems

ERP systems are comprehensive software solutions that integrate various systems involved in financial planning, inventory management, accounting, distribution, finance, marketing, HR, and more. These systems offer a range of accounting tools and reports, along with additional features like inventory control and point-of-sale functionality.

In addition, ERP software often includes a customer relationship management module, enhancing customer interactions and streamlining sales processes. These systems are particularly beneficial for large companies with multiple departments and geographically dispersed teams. They are also well-suited for organizations that require detailed accounting records across complex systems, as they help streamline processes vertically throughout the entire organization.

Billing & invoicing systems

This type of accounting software covers the day-to-day tasks involved with check writing and updating customers about payments due. Billing and invoicing systems help maintain accurate accounting figures and are used to generate professional-looking invoices or bills to the end recipient. These tools keep track of your company’s financial activity so that you’re ready for auditing.

Property management accounting software

Property management accounting software is a specialized software solution designed to streamline and automate financial processes specifically tailored for property management companies. It enables efficient tracking, organization, and management of financial transactions, such as rent collection, vendor payments, expense tracking, and budgeting. This software provides tools for generating comprehensive financial reports, facilitating real-time visibility into income and expenses, and assisting with tasks like lease management and reconciliation. By integrating various accounting functions into a single platform, property management accounting software improves accuracy, reduces manual errors, enhances financial control, and simplifies the overall financial management of properties and portfolios.

Real Estate Bookkeeping Mistakes Software Won’t Save You From

While software can be a valuable tool for real estate bookkeeping, there are certain mistakes that it won’t be able to save you from. Here are some common bookkeeping mistakes that software alone can’t prevent:

1. Data Entry Errors: Even with software, manually entering data can lead to mistakes like transposing numbers or omitting crucial information. It’s important to double-check your entries for accuracy. This usually applies with data imported from PDF invoices, or scanned documents. Whether you input this data manually one-by-one or try to upload a list, things can go wrong. Even the smallest typo in a number, name, or vendor can mess up an invoice. This can cause you to lose at least 20-30 mins if you have to go back to correct each field. That’s time you don’t want to have to worry about upfront. A small typo likely won’t cause a big wave, however, the wrong amount extracted from the invoice usually leads to incorrect tax being paid.
2. Misclassification of Transactions: Software relies on proper categorization of transactions, but if you misclassify expenses or income, it can affect your financial reports and tax filings. Understanding proper categorization is essential.
3. Failure to Reconcile Accounts: While software can automate bank reconciliations, it still requires regular oversight to ensure accuracy. Neglecting to reconcile accounts can lead to discrepancies and errors in your financial records.
4. Lack of Knowledge or Training: Software is only as effective as the user’s understanding. Without proper knowledge or training, you may not utilize all the features correctly or misinterpret the data generated.
5. Ignoring Regulatory Compliance: Software can assist with compliance, but it’s crucial to stay informed about real estate-specific regulations and tax laws. Failing to comply can result in penalties or legal issues.
6. System Failures: While these are few and far and between, it’s important to note that no amount of preparation will prepare you for a system failure. If the software isn’t backed up properly, one big company mistake could completely diminish your bookkeeping. Make sure you effectively back up all of your information, and keep it somewhere safe and secure. That way you have the information ready to pull in in a crunch of the accounting software is starting to glitch.

To avoid these mistakes, it’s important to combine software with good bookkeeping practices, such as regularly reviewing your records, seeking professional advice when needed, and investing in ongoing education to stay up-to-date with industry standards and regulations.

Advice From The Pros on Accounting Software for Realtors

Chris Heller, a member of the Agent Advice Editorial Board, and a long time leader in the real estate industry says that bookkeeping is the most important part of building a successful team. Finding the right accounting software for Realtors, and keeping up with finances is the first step in making sure you can plan ahead and grow your business.

“Years ago, I was working with a very talented team in California. Each agent played their own role in ensuring the smooth operation of my growing business. Among them was Emily, an experienced accountant with a keen eye for numbers and a passion for accuracy.

One day, the real estate team encountered a major accounting challenge. Due to an oversight, a significant financial discrepancy was discovered in the records of a recently closed deal. The mistake threatened not only the agency’s reputation but also the trust of our clients.

Emily took it upon herself to investigate the issue. She meticulously reviewed all the transaction documents, cross-referenced financial records, and double-checked every entry. It became clear to her that the error was a result of manual data entry and a lack of standardized processes.

Determined to prevent such mistakes in the future, Emily researched modern accounting solutions specifically designed for real estate businesses. She discovered a comprehensive real estate accounting software that offered automated workflows, integration with other systems, and real-time financial reporting.

Convinced that this software could revolutionize their accounting practices, Emily presented her findings to the me and my management team. We recognized the importance of investing in technology to enhance efficiency and mitigate potential errors. The decision was made to implement the new accounting software.

With the software in place, our team experienced a remarkable transformation in our day-to-day operations. The software streamlined everu processes, eliminating the need for manual data entry and reducing the risk of human error. It provided us with real-time visibility into financial data, enabling them to track expenses, commissions, and overall profitability with ease.

As the months went by, the team as a whole noticed significant improvements in our accounting practices. Financial reconciliations were done in a fraction of the time, and accurate reports could be generated at the click of a button. The newfound efficiency allowed Emily and our team to focus on more strategic tasks, such as financial analysis and planning, ultimately benefiting the agency’s bottom line.

Word spread within the real estate industry about the agency’s commitment to accurate and reliable accounting practices. Clients and partners praised their professionalism and trustworthiness, resulting in increased business opportunities and referrals.

Emily’s proactive approach to addressing the accounting challenge and her advocacy for implementing modern technology earned her recognition and respect within the team. She became known as the go-to person for financial insights and guidance, and her expertise played a pivotal role in the team’s continued success.”

Our Methodology:

Our in-house real estate experts spent hundreds of hours researching, scoring, and ranking the top real estate accounting software companies on the market.  We looked at everything from pricing and ease of use to the specific real estate industry features that are available. We’ve ranked and rated each accounting tool on 5 different factors to come up with the very best real estate accounting software companies. The short version of factors considered are: 

1. Cost: Not all real estate accounting tools are created equal, so it’s important to look at what’s included with your purchase. Some software companies charge upwards of $300/month for outdated spreadsheet templates, which is why we take into account the price of the service and compare it to the features and extra resources provided to help each agent succeed.
2. Features & user friendliness: Different accounting services come with different feature sets, some more important for teams than solo agents. Additionally, agents don’t have a lot of extra time to learn a complicated accounting system, so the more it just works with their natural workflow, the better. That’s why we’ve rated the tools that are easier for agents to navigate without a tech team higher than the ones that are more complicated to use.
3. Payroll & taxes: When tax season rolls around real estate agents are often very stressed out making sure they have all of their write-offs available. Some accounting tools can keep track of this information all year long – making filing taxes a breeze. Many teams are also looking to keep track of their bottom line while paying their team members in an efficient way. It’s much easier if there is one tool that can handle all of an agent’s accounting needs in one place. That’s why this was a big factor we considered when coming up with our real estate accounting software rankings.
4. Customer support: Many real estate agents don’t have the time to fix technical glitches and/or don’t have access to a tech team, so customer support is very important. Whether you might need help setting up integrations or just to get the software up and running, customer support plays a big role in finding your ideal software—especially when it comes to a real estate accounting service that you’ll be using on a daily basis.
5. Overall performance: At the end of the day, all accounting investments need to have a good ROI. Our experts looked for how the features meet the specific needs of real estate agents and teams.