How it runs for real estate agents and brokerages
Your accountant applies each receipt to the right transaction on the day it lands, records any difference with its reason and clears unapplied cash weekly through our ReconBot workflow. Earnest money receipts go to the trust ledger, never to revenue. Aging by agent and counterparty stays accurate for follow-up.
What is cash application?
Cash application means matching money received from customers to the invoices it pays and recording that in the accounting system. It covers bank receipts, checks, lockbox files, card payouts and remittance advices, including partial payments, deductions and payments with no reference. Done well, the aging is accurate and no customer is chased for an invoice they already paid.
What we handle for real estate agents and brokerages
- Commission wires applied to specific closings, net of wire fees
- Referral fee receipts matched to the invoiced closing
- Agent card and ACH payments applied across open fee statements
- Earnest money receipts posted to the trust ledger by transaction
- Unapplied cash cleared weekly with the reason logged
The KPI that matters here
Unapplied receipts older than 5 business days held at zero every week.
Real estate compliance notes
1099-NEC for agents and referral partners
Brokerages report commissions paid to licensed agents on Form 1099-NEC because agents who meet the IRC section 3508 tests are statutory nonemployees. Referral fees paid to other brokerages and payments to unincorporated vendors are reported the same way once they reach the annual threshold. We keep W-9s and cumulative totals current so the forms are prepared for your review and filing by the January deadline.
Commission splits and disbursement records
Each closing is documented from the settlement statement through the commission disbursement authorization to the agent payment, so the split, cap progress, franchise royalty and any referral fee are traceable. Many state commissions require these records to be retained for several years. We file the documents with the entry in LedgerDesk.
Earnest money and trust accounts
Most state real estate commissions require earnest money to be held in a separate trust account, never commingled with operating funds, with a transaction-level ledger and a monthly reconciliation. Some states require interest-bearing accounts or set deadlines for deposit and disbursement. We maintain the ledger and reconciliation; the broker signs and remains responsible under the license.
Client money in the UK, Canada and Australia
UK letting and estate agents must belong to a Client Money Protection scheme and keep client money in a separate account. Canadian and Australian agencies operate under provincial or state trust-account rules with regular reconciliation and audit requirements. We prepare the ledgers and reconciliations in the format the regulator or auditor expects.
Real estate software we work in
- QuickBooks Online
- Xero
- Gusto
- Bill.com
- Stripe
- Brokermint
- SkySlope
- dotloop
- Lone Wolf Back Office
- All 50 platforms
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Frequently asked questions
How do you apply one wire that covers several closings?
The accountant identifies the closings from the title company's remittance or the settlement statements dated that day, applies the wire across the matching commission receivables and records any wire fee or credit as a separate line. If the remittance is missing, the title company is contacted under your brand the same day rather than leaving the deposit unallocated.
What happens if a commission arrives short?
The difference is recorded against the closing with the reason, commonly a wire fee, a home-warranty charge or a credit shown on the final settlement statement. If the shortfall is a title company error, the accountant contacts them under your brand and tracks the correction. The agent's disbursement is prepared from the confirmed amount.
Do you apply earnest money the same way?
No, earnest money is never applied to revenue. Each deposit is posted to the trust ledger against its transaction, and disbursement at closing or refund is recorded there. The trust account is reconciled three ways monthly. Only the brokerage's commission, once disbursed at closing, enters the operating books as revenue.
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