Commission Chaos: How Realtors Can Prepare to Track Earnings in 2025
As the year winds down, successful Realtors find themselves reflecting on what worked, what didn’t, and how to prepare for a more financially successful year ahead. Real estate income, often tied to unpredictable commission schedules, can feel chaotic without a solid system to track earnings and manage cash flow. The good news? With a few practical steps and the right tools, you can turn financial chaos into clarity—and start the new year with confidence.
Here’s how to prepare your finances, track commissions effectively, and set yourself up for long-term growth.
Why Tracking Earnings Matters More Than Ever
Real estate is an industry driven by variability. Deals can close in rapid succession or be spaced months apart. Without a clear understanding of your earnings, you risk overspending during peak months or scrambling to cover expenses in slower ones. Tracking commissions isn’t just about knowing what you made—it’s about leveraging that knowledge to budget, plan, and grow.
Inconsistent income cycles often lead Realtors to a reactive approach to their finances. However, proactive tracking allows you to recognize patterns, avoid costly oversights, and even identify opportunities to maximize earnings.
Year-End Tips for Realtors: Closing Out 2024 with Clarity
As the year draws to a close, taking stock of your finances is essential. Here are two actionable steps to help you close out 2024 on the right note:
Reconcile All Transactions
Before diving into the new year, ensure your books are clean and current. Match all bank and credit card transactions with your records. Look for missing commissions, duplicate charges, or forgotten expenses. If you’ve been relying on spreadsheets or even manual tracking, this is an excellent time to transition to software like QuickBooks or (hint, hint) a qualified bookkeeper who specializes in working with realtors.
Maximize Tax Deductions
December 31st is the cutoff for many tax-saving opportunities. Review your expenses to ensure you’ve accounted for deductible items like mileage, marketing, or continuing education costs. If you’ve had a profitable year, consider investing in deductible business expenses now, such as new technology or professional development, to lower your taxable income.
Tools and Strategies for Tracking Earnings in 2025
Starting the year with a solid earnings tracking system can reduce stress and give you a clearer picture of your financial health. As a QuickBooks ProAdvisor, let me offer you a few tips to help you stay on top of your finances:
Automate Income Tracking
Manually recording each commission check can be tedious and prone to errors. Tools like QuickBooks Online allow you to automate the process. By linking your bank account, deposits can be categorized automatically, saving you hours of manual entry. You can even set up rules to distinguish commission payments from other income sources, streamlining your records further.
Break Down Each Commission Check
Understanding the components of your commission checks is vital. For example, consider breaking down each payment into:
Gross Commission: The total before any deductions.
Broker Fees: What you pay your brokerage.
Marketing Costs: Staging, photography, or ad expenses tied to the deal.
Taxes: Set aside a percentage for state and federal taxes to avoid surprises during tax season.
This breakdown helps with tracking and reveals where your money is going, making it easier to identify areas where you can cut back or reinvest strategically.
Separate Business and Personal Finances
Mixing business and personal accounts is tempting, but doing so can lead to confusion and missed deductions. Open a dedicated business checking account and credit card for real estate transactions. This separation simplifies tax preparation and ensures your personal spending doesn’t muddy your business's financial picture.
Valuable Habits for Long-Term Financial Clarity
Schedule Weekly Finance Reviews
Commit to reviewing your finances every week. Use this time to reconcile transactions, review pending invoices, and update your income tracker. Regular check-ins prevent small issues from snowballing and keep your financial data accurate year-round.
Set Quarterly Financial Goals
Annual goals are great, but breaking them into quarterly milestones makes them more actionable. For example, if you aim to earn $120,000 in commissions next year, set a goal to close $30,000 in deals per quarter. Use your tracking system to monitor progress and adjust strategies as needed.
Build a Buffer Fund
Given the unpredictability of commission-based income, having a financial buffer is crucial. Aim to save 3-6 months’ worth of essential expenses. This safety net can help you weather slower months without the stress of scrambling for funds.
Common Pitfalls—and How to Avoid Them
Even with the best intentions, Realtors can fall into common financial traps. Here’s how to steer clear of them:
Neglecting Small Commissions
Focusing only on big-ticket deals is easy, but tracking smaller commissions is just as important. Over time, these smaller earnings add up and contribute to your bottom line. QuickBooks allows you to tag transactions, making it easy to group and analyze income by deal size.
Forgetting About Recurring Costs
Subscriptions and recurring charges—like your CRM software, MLS fees, or digital marketing tools—can quickly add up. Review these expenses quarterly to ensure you only pay for value-added services. Cancel or renegotiate any that don’t align with your business goals.
Delaying Tax Prep
Waiting until April to organize your financial records can result in missed deductions and unnecessary stress. Set a date in early January to manage all your tax documents, ensuring you have everything ready to hand off to your accountant or tax preparer.
Case Study: Turning Chaos into Control
When Tricia, a busy Realtor in her fifth year, started working with GrowthPoint Bookkeeping LLC a few months back, her finances were in disarray. Commissions were lumped together with personal spending, and she often scrambled to find receipts at tax time.
Tricia gained clarity by implementing QuickBooks Online and following a structured earnings tracking system. We identified over $6,000 in untracked income from smaller deals and saved an additional $2,400 by canceling ‘no value’ investments. With her finances in order, Sarah closed the year feeling confident and prepared to scale her business in 2025.
Start the New Year Strong
Accurate earnings tracking doesn’t just reduce stress—it positions you for growth. With the right tools, habits, and mindset, you can take control of your finances and thrive in an industry where every dollar counts.
Ready to bring order to your commission chaos? GrowthPoint Bookkeeping LLC specializes in helping high-achieving Realtors streamline their finances, uncover hidden profits, and focus on what they do best: closing deals. Book your free strategy session today, and let’s make 2025 your most successful year yet!
