Keep clean records of commissions, splits, referral fees, escrow/trust funds, and marketing expenses. Track mileage and transaction-level expenses, reconcile broker splits monthly, save closing docs, and use a simple Commission Tracker + Monthly Checklist to avoid surprises at tax time. Consult your CPA for tax-specific decisions.
On the go? Listen on The Deep Dive — where we dig deeper into this topic: ‘Gross Commission First_ The Real Estate Agent’s Essential Guide to Bookkeeping, Audit-Proofing, and Maximizing Deductions’. Listen or download.
Why this matters
Real estate transactions move fast and involve multiple parties, splits, and one-time fees. Small bookkeeping mistakes — misposted commissions, lost receipts for marketing, or mixing personal and business expenses — compound into big headaches at tax time and when reconciling with your broker. Good bookkeeping gives clarity on true income, helps with cash flow planning (commissions can lag), and protects you if your broker or the IRS asks for backup.
A quick story
One agent assumed the net commission deposit was their revenue. After 6 months they found referral fees and broker splits were never recorded, and deductible marketing expenses were missing receipts. We matched commission statements to deposits, captured missing expenses, and created a monthly reconciliation routine — the agent’s reported income became accurate and quarterly estimates were corrected.
Core concepts real estate pros must track
- Gross commission vs. net deposit — Always record gross commission and separately record broker splits, referral fees, and transaction fees.
- Referral & transaction fees — Track who gets paid, when, and whether fees were reimbursed.
- Escrow/trust funds — Do not record client funds as income. Keep trust/escrow separate and reconcile often, following broker/state rules.
- Marketing & lead costs — Ad spend, staging, client gifts — keep receipts and tie expenses to campaigns when possible.
- Vehicle & mileage — Track miles for showings and meetings using an app or log; separate business vs personal use.
- 1099s & contractors — Track payments to photographers, stagers, assistants; collect W-9s and know 1099-NEC thresholds.
- Timing of income — Treat advances/draws as liabilities until earned; consult your CPA on treatment.
Step-by-step monthly workflow (30–60 minutes)
- Import bank & credit card transactions into your accounting system.
- Match commission statements to deposits: record gross commissions, then post broker splits/referral fees.
- Reconcile escrow/trust accounts with the trust ledger.
- Capture receipts for marketing, client gifts, licensing fees and attach images to transactions.
- Log mileage and update vehicle expense totals.
- Review A/R and A/P — follow up on unpaid referral invoices or vendor bills.
- Run a P&L and cash forecast to estimate the next 90 days of cash flow.
- Backup your books and provide a short summary to your tax preparer if requested.
Recommended journal entry examples
Record gross commission and splits (on closing):
• Debit: Accounts Receivable (or Bank) — Gross Commission
• Credit: Commission Income — Agent’s Gross Share
• Credit: Commission Payable — Referral / Broker Split (if paid later)
When broker remits net deposit:
• Debit: Bank — Net Deposit
• Debit: Commission Expense / Broker Split — Broker Fees
• Credit: Accounts Receivable (or clearing account)
Quick wins you can do this week
- Start a Commission Tracker (CSV) and update it after every closing.
- Create a folder Drive/Commissions/YYYY and save closing statements.
- Turn on photo receipt capture for all business card charges.
- Enable bank feeds into QuickBooks/Xero to reduce manual entry.
Commission Tracker (CSV copy — paste into Google Sheets or Excel)
Closing Date,Property,MLS#,Client,Gross Commission,Your Split %,Your Gross Commission,Broker Split,Referral Fee,Net Deposit,Deposit Date,Settlement Statement Link,Notes
2025-09-15,123 Main St,MLS12345,John Doe,15000,60,9000,4500,500,3950,2025-09-20,Drive/Commissions/MLS12345.pdf,Split to co-op 3%
Here’s a ready-to-use CSV you can open in Google Sheets or Excel.
Download the CSV — Real Estate Commissions Tracker
Monthly Bookkeeping Checklist (CSV copy)
Task,Owner,Monthly Completed (Y/N),Notes
Import bank & credit card transactions,Agent/Bookkeeper,,Include all accounts
Match commissions to deposits,Agent/Bookkeeper,,Record gross commissions & splits
Reconcile escrow/trust accounts,Agent (or Broker),,Follow broker rules
Attach receipts to expenses,Agent,,Marketing, client gifts, staging
Update mileage log,Agent,,Use app or spreadsheet
Review unpaid referral invoices,Agent/Bookkeeper,,
Run P&L and cash forecast,Agent/Owner,,
Backup accounting data,Agent/Bookkeeper,,
Here’s a ready-to-use CSV you can open in Google Sheets or Excel.
Download the CSV — Real Estate Monthly Checklist
Tools & workflow recommendations
- Accounting — QuickBooks Online or Xero.
- Commission management — Simple spreadsheet or integrate broker statements with a clearing account.
- Receipt capture — Expensify, Shoeboxed, or phone camera + Drive.
- Mileage tracking — MileIQ, Everlance, or a simple mileage log.
- Document storage — Google Drive or OneDrive with consistent folder structure.
- Automation — Bank feeds, rules for recurring deposits, and referral invoice templates.
Experience & Trustworthiness
Giesler-Tran Bookkeeping has reconciled hundreds of real estate closings for solo agents and small teams. We focus on practical setups that match broker statements to your books, reduce time spent on reconciliations, and ensure clean backup for taxes and audits.
Common questions
Q: Should I track gross or net commission?
A: Track gross first, then record splits and fees separately so you have an audit trail.
Q: How long to keep closing docs?
A: Keep settlement statements and contract-related docs at least 3–7 years; consult your CPA.
Q: Can I deduct marketing/staging?
A: Many marketing costs are deductible; keep receipts and consult your CPA for specifics.
Need help?
Want clean commission books and fewer surprises at tax time? Book a free 30-minute Commissions & Bookkeeping Review with Giesler-Tran Bookkeeping. Book here.
Giesler-Tran Bookkeeping • gieslertranbookkeeping.com • 971-200-5158