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Real Estate Accounting Software

Real estate is a vast business that consists of many financial transactions involving large sums. It involves managing multiple properties, rent, taxes, mortgages, etc. That’s where a robust real estate accounting software like Refrens becomes a friend to many agencies across the globe. Starting from the root of it all, why use accounting software like Refrens for your real estate business in the first place?

Business Necessity

First of all, all businesses, irrespective of their industry, need accounting software like Refrens to manage their chart of accounts, update their ledgers, and stay on top of their finances. This is how they will be able to draw analytical reports that give them insights into their business. Be it revenue collected from sales and rents over the year, total money blocked in escrow, or expenses incurred in the renovation, repairing, management, etc. – with accounting software, you get a holistic picture. This will help you make decisions on your financial processes and create upcoming budgets.

GST Compliance

With real estate accounting management software like Refrens, GST and other tax compliance become easy.

• 1% of tax is levied on under-construction properties under the affordable housing scheme, and 5% GST is levied on other under-construction properties. An accounting software like Refrens can keep a record of all such properties, automatically configure tax, and calculate the tax amount. When the payment is received, it can help deduct TDS and automatically update your TDS reports to keep them updated.

• Residential properties are nil-rated, but commercial properties attract 12% GST on complete, ready-to-move properties. Since a real estate agency needs to manage multiple properties, a real estate accounting software like Refrens can keep track of those properties along with their type (residential or commercial) and configure taxes accordingly. It can also automatically update your GST reports, keeping you on top of your finances.

• Work contracts for ongoing services attract 18% GST. Work contracts typically include services like construction, renovations, repairing, etc. Real estate agencies need to record expenses with 18% GST on the same. An accounting software like Refrens has inbuilt expense management capabilities that configure and calculate taxes on all these expenses, ensuring that your agency’s GST report is updated. Moreover, a GST-compliant real estate accounting software like Refrens automatically fetches your GSTR-2B from the GST portal. You can use this report to reconcile your GSTR-2B with your purchases and expenses to ensure a seamless claim on your ITC.

• ITC can be claimed on raw materials like cement, steel, etc., if bought at full rate. With Refrens, you can reconcile your expenses and purchases with the auto-generated GSTR-2B report and ensure a seamless ITC claim on your purchases.

• For work contracts exceeding INR 2.5 lakh, TDS under GST is applicable at 2%. While settling the payments of your employees that exceed INR 2.5 lakh, Refrens can help you calculate 2% TDS (as per regulations) and settle payments accordingly.

• RCM needs to be applied for transactions done with unregistered people or businesses. A real estate accounting software like Refrens ensures easy application of the reverse charge mechanism while dealing with unregistered businesses, keeping track of your taxes and regulating your tax report. This gives you a clear picture of the tax to be paid at the end of each month or year.

• GSTR-1, GSTR-2B, GSTR-3B, and GSTR-9C need to be filed regularly. GST returns are to be filed monthly and annually. These reports are based on your sales and purchases. GST-based real estate accounting software like Refrens automatically creates, updates, and reconciles these reports, and even files them for you to ensure easy GST compliance and unhindered business operations.

• 10% TDS is deducted on rent paid on commercial properties. As discussed before, an accounting software like Refrens can streamline tax deductions automatically, keeping your transactions error-free and simple.

The above were a few GST regulations that a real estate agency needs to comply with. An accounting software like Refrens makes it so much easier and more efficient.

Tracking Multiple Properties

A real estate company deals with numerous properties. Some are for residential purposes, while others are commercial. Moreover, they are either sold or rented out. The agency also needs to track all the expenses levied on each property, including the purchase of completed or WIP properties, construction, renovation, interior designing, etc. They also need to track and manage company costs, employee costs, and stamp duties. Recording and tracking all these transactions necessitates the need for an accounting software like Refrens for real estate agents.

Multi-Currency Transactions

It is not uncommon for real estate agents to sell or rent out properties to NRIs. These require dealing in more than one currency along with managing the exchange rate and varied tax regulations. A real estate accounting software like Refrens can ease this process by helping you create multi-currency accounting documents with correct forex rates.