For many real estate agents, the most challenging part of the job is managing cash flow. When you rely solely on commissions for income, you must prepare for the ups and downs of cash flow throughout the year. It can take time for the closing to take place, and sometimes, the deal falls through.  Even after closing, you may have to wait weeks to receive your commission.  So, to manage your cash flow and help you avoid the “valleys,” some proactive planning is wise.

The first and probably the most crucial step in managing your cash flow is to have a plan in place using a cash flow tracking system.  You will need to create a plan with which you can clearly and quickly see all pending cash inflows and outflows. There are several platforms that do this, and of course you can always use an Excel spreadsheet.

You will need to plan months in advance, so you can prepare for possible cash flow trouble.  You should look for time periods where income is tight or even negative. When you notice you are having steep peaks and valleys, you have a great option to smooth out your income.  Working with RealCommissions, receiving a commission advance will turn your pending commissions into immediate funds to access for your business.  And since the fees associated with the commission advance are business expenses, they should be tax deductible.

Leave a comment