SUMMARY:
brokerWOLF combines your operational data, like transactions, with your financial data, like agent billing. This is known as integrated accounting. Integrated accounting allows you to do all of your back office and accounting functions in just one system, eliminating the need for third-party systems.
This short video shows you how to use integrated accounting in brokerWOLF and details three reports it can produce for your brokerage, including
- The amount of money agents owe your brokerage
- The profitability of an agent to your brokerage, and
- Complete details of a trust deposit that you can show an auditor.
What is integrated accounting:
brokerWOLF combines operational and financial data. This is known as integrated accounting. Integrated accounting allows you to do all of your back office transaction management, accounts payable and receivables, track trust/escrow in one program. Many of our clients use brokerWOLF’s integrated accounting to see how much money their agents are bringing in to the brokerage, run financial reports, and reduce their risk of non-compliance.
Why use integrated accounting:
Because real estate accounting is more complicated than many traditional businesses. Third-party accounting systems are designed to meet the needs of traditional businesses, but are not equipped for real estate brokerages.
In real estate, agents are both customers generating revenue—through home sales—and vendors requiring payments—through commission splits. It is different from traditional accounting where customers and vendors are separate.
As such, real estate accounting needs to integrate operational data (transactions/trades, buyers, sellers, outside brokers, vendors, etc.) with financial data (commissions, fees, payments, ledgers, financial statements, etc.). brokerWOLF combines both so that users can do all of their back office and accounting in one system, eliminating the need to export to third-party systems. Doing so is the only way to get a complete picture of your real estate business.
How to use integrated accounting:
You need to ensure you are processing everything in brokerWOLF. Accounts Payables/Receivables, Transactions/Trades, Trust/Escrow, and Agent Billing.
A/P is done in menu option 5. You can enter an invoice in menu option 5.1 and pay out an invoice in menu option 5.2. You can track the inquiry and the history of invoices created and a list of checks in menu option 5.5. All of this breaks down everything in brokerWOLF into the correct G/L.
Transactions are entered in 2.1. Enter information about the deal, people, outside broker, trust, commissions, agent info, etc. This is where you track the trust/escrow by deal and by buyer/seller.
Agent billing is crucial to using integrated accounting. In menu option 8.4.1, you can run individual charges to an agent, or you can run recurring billing (for example, a desk fee that you charge to your agents every month).
With this information entered in on a daily basis, you can now run reports that will give you a breakdown of how much money agents owe you, how much money they’re bringing in, and get a full audit trail on all of your trust/escrow deposits.
Reports you can get from integrated accounting:
Agent’s Expenses for Broker (8.6.4): This report will break down the balance of expenses that agents owe your brokerage, including the balance on their last statement, deductions, new expenses and charges, and finally, the current balance. This report gives you an immediate and clear picture of how much money agents owe your brokerage.
Agent’s Net Worth Report (8.F.2): This report shows you how much money agents are really bringing in to your office. Because you’ve combined the amounts that your agents earn vs. the amounts they owe in brokerWOLF, you can see whether their earnings outweigh their expenses and thus, whether they are profitable to your business.
Trust Sub-Ledger (3.6): This report shows you the complete details of your trust deposits. This is a great report to show to an auditor. Having just one program for your operational and financial data gives you checks and balances—as you are not entering data into multiple systems—which in turn reduces your risk of human error and data inaccuracies.
Want to use integrated accounting, but don’t know where to get started?
We’re hosting a free webinar on March 6 to show you how you can start using integrated accounting.
