Basic Accounting Principles for Real Estate Professionals
So what goes on in our bookkeeping department? What do these people do daily?
The bookkeeping team does what’s important to our clients is process payroll. They must record all the salaries and taxes earned and paid by every employee every pay period – including your own. The payroll department ensures that the payroll system deducts appropriate federal, state, and local taxes. The online portal for your paycheck shows these taxes. Depending on where you live, they usually include income tax, social security taxes, and employment taxes that the federal and state government collect. Other deductions include personal ones, such as retirement, vacation, sick pay, or medical benefits. It’s a critical function. Some companies have their payroll departments; others outsource it to specialists like Centerbridge.
Our bookkeeping department also records any payments or cash received from customers or clients of your business. The bookkeeping department must ensure that the money is sourced accurately and deposited in the appropriate accounts. They also help manage your business cash flow. In other words – reporting where the money goes; how much of it is kept on-hand for areas such as payroll, or how much of it goes out to pay what the business owes its banks, vendors, and other obligations.
The payables and cash disbursements team works on the other side of the accounting ledger. Your company makes many payments during the year to pay for purchases, supplies, salaries, taxes, loans, and services. The bookkeeping department enters all these payments and records the bills the business paid, how much, and what.
The bookkeeping department also keeps track of assets such as property and equipment. Asset tracking can include the office building, rental properties, furniture, computers, signs, and even minor items such as pencils and pens.
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