For a real estate agent the best use of your time is working, not doing your books. We are well aware that the last thing you want to do on a Sunday evening after an open home is to complete your accounts.

One of the biggest benefits of being self-employed is the ability to deduct expenses from your income. Therefore, it’s important that you have a system that makes it easy to record all of those incidental expenses. This will have a big impact on your net income for the year.

Easy invoicing and keeping track of who owes you what is paramount. It’s also important to have a good relationship with your accountant so you claim the maximum but stay within the limits, as you’ll be selling a house over a coffee, attending training courses and conferences.

1. Setting up your organisation

To get your consulting company started in Xero there are a few simple things you need to set up first.

• Enter your company details including your Company name and GST number (if applicable) into the Organisation Settings screen.
• Set up your invoices by uploading your logo and entering your contact details in the Invoice Settings screen. We suggest adding your bank details to the Terms and Payment advice to encourage your clients to pay you electronically.
• Invite any other people you wish to access the financial data for your company eg. your accountant.

• Set up your Chart of Accounts in Xero by importing your existing Chart of Accounts or use the Default Real Estate Agents’ Chart of Accounts Template attached here for you.

  Download: Real Estate Agents Chart of Accounts (CSV)

  Download the Real Estate Agents Chart of Accounts template (CSV file) to your computer. You can then upload it into Xero to replace the default Chart of Accounts set. It is important that it remains a CSV file and isn’t changed into an XLS or any other file type.

2. Adding in your bank details

Xero can automatically import your bank statements overnight. Each morning you can quickly process the new transactions, including rents received and expenses incurred.

• Add your bank account(s) including your bank account number.
• Set up your automatic bank feeds so that all your rent payments will be brought in daily. Xero provides you with a form that you send in, which gives authority to enable the bank feeds.
• Enter your bank account balance in the Set Starting Balances screen. The balance you should enter is the closing balance as at the day before you start using Xero.

These are the normal activities you would do every few days in Xero.

1. Process your cash transactions and reconcile your bank account

• You can log in to Xero where you can see any payments that have been received or if expenses have been incurred.
• Receipts can be reconciled directly to your outstanding AR invoice with a single click.
• Expenses incurred directly from the business bank account only need to be classified once. After that Xero will remember your prior classification for you.

2. Keeping track of expenses you paid out of your own pocket

• For expenses paid by yourself on behalf of your business you can use the Xero expense claim functionality. This allows you to enter receipts for purchases wherever or whenever you want. We suggest you write the Xero receipt number on the back of your paper receipt for easy reference.
• We recommend doing a small amount every day as it will eliminate the dreaded three hour catch up on a Sunday night.

3. Commission invoicing (Xero to Xero)

If you’re like us, invoicing is the thing you most look forward to. You could use the Xero to Xero option between you and the real estate company you work for. Note the branch that is paying you will be required to be running Xero, if so then please follow the steps below.

• First off ensure that the branch has your Xero Network Key – to give them this information click on the settings menu and select Xero Network. Click on the Send Key option, and type in the email address of the administrator of the branch. Once they receive the email, they need to update your supplier details in their Xero account by entering your Xero Key into their organisation.
• The branch can then create a payable invoice with your commission details in Xero which they then simply send via the Xero Network. Your accounts receivable invoice with your commission details will now appear as a draft accounts receivable invoice in Xero.
• Select the draft invoice check that it is all coded correctly and click Approve.
• Once you receive a payment from the branch it will automatically match up to the invoice that you have just approved.

4. Commission invoicing

If your branch is not on Xero they must follow the steps below to generate your income statements.

• Make sure your invoices are set up to go under the Settings / Invoice Settings menu option.
• Simply create a new invoice from Accounts Receivable or the 'Add Receivable Invoice' button on the Xero Dashboard.
• Enter your client's name and the date of the invoice.
• Xero allows you to enter in meaningful Descriptions that can be several sentences in length. In our experience being as specific as possible about the work you have done speeds up payment.
• To add an extra line to split your invoice details out, click Add Line.
• The fastest way to send an invoice is to hit the 'Approve / Approve & Print / Email' option. You can then enter the email address of the contact and a short note if required, click Send and Xero will send out a nicely formatted PDF on your behalf.
• The invoice is now in the system and when the money is received it can be receipted with a single click when you process the bank transactions. We would suggest that when you receive payments, you transfer some of that money into a savings account for tax. This means that you always have the cash on hand to pay GST and provisional tax. Your accountant should be able to advise the amount which will differ depending on your business. (An example might be the GST amount + 30% of the non-GST amount).
• You can keep track of outstanding invoices on the Accounts Receivable dashboard, or by running the Aged Receivables report. To chase up outstanding invoices we suggest resending the invoice with a reminder message.

5. GST Returns and Tax

Once all your transactions are in you can easily generate a GST Report in Xero.

• We suggest you send a note to your accountant to review your GST Return, and ensure that expenses are classified correctly and that you are maximising your deductions.
• Your accountant can view the GST Audit Report to quickly review your transactions.
• Once you are happy with the GST return, click on publish to save this report in case it is required to view again the in future.
• Your accountant can also view your provisional tax situation. Often consulting companies have significantly varying income levels from year to year so it is important that you have this under control to avoid penalties and to maximise your cash flow.

6. End of year

End of Year reporting is fast and easy with Xero.

• Ensure that all your transactions have been loaded into Xero.
• Give access to your accountant who can quickly review your position. They can add in additional items like depreciation, home office expenses etc.
• Your accountant can complete all the usual end of year activities and work with you on a plan for the following financial year.