How to Track Agent Commissions in QuickBooks for Real Estate Firms

If you run a real estate brokerage, you already know that commission money never sits still for long. Between closings, agent splits, brokerage fees, and all the little charges that pile into a transaction, it can feel like money is constantly moving in and out of your accounts. Keeping track of where it all goes can get messy fast, especially if your books aren’t set up in a way that reflects how your brokerage actually operates day to day.

That’s where having the right QuickBooks structure makes all the difference. When your system is set up right, you can see exactly how much your brokerage earned on a closing, what each agent is owed, and how much your business keeps after splits and expenses.

In this guide, we’ll walk through a simple, practical way to track agent commissions in QuickBooks. The goal is to help you build a workflow that mirrors how your brokerage really works, so you can stay on top of cash flow, pay agents accurately, and understand your profitability with confidence.

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Start With A Clean Structure

Before you begin recording closings or payouts, it helps to have a solid foundation in your Chart of Accounts. Think of this as the framework that tells QuickBooks how to organize your income and expenses so your reports tell a clear story. 

You’ll need to add two accounts that align with how commissions actually move through your business:

• Commission Income account: This is where you’ll record the full commission your brokerage earns on each transaction. Keeping it separate from your other income streams makes it easier to see how your core business is performing.
• ‍Agent Commission Expense account: This tracks what you pay out to agents. If you combine these expenses with general contractor payments or payroll, it becomes much harder to see how much of your commission income stays with the brokerage.

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Set Up Your Agents as Vendors

Since most real estate agents are independent contractors, they should be set up as vendors in QuickBooks. This allows you to record their commission payouts, track amounts owed, and prepare 1099s at year-end, if required.

Each agent should have their own vendor profile with their name, contact details, and tax identification. 

Having clear vendor profiles also helps when you need to look up a payout quickly or if an agent has questions about a past closing.

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Record The Gross Commission From Each Closing

Once a property closes and your brokerage receives the commission, the first step is to record the full amount of income earned. This number becomes the starting point for your reporting and ensures that your books reflect the true revenue generated by the transaction.

• If the payment comes in immediately, you can create a Sales Receipt. 
• If the payment will arrive later, use an Invoice instead. 

Either option works fine. The key is to use your Commission Income item and enter the total commission amount before any splits are taken out.

If the transaction includes additional income sources like referral fees or transaction fees, you can list them as separate lines. This gives you better visibility into where your revenue comes from and helps your reports stay clear and accurate.

With the income recorded, you now have a full picture of the brokerage’s earnings before agent payouts.

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Record What You Owe The Agent

Now that the commission income is in your books, the next step is to record the agent’s portion of the payout. This helps you keep track of what is owed and ensures that your expenses reflect the true cost of earning each closing.

The cleanest way to do this is by creating a Bill:

• Select the agent as the vendor, then enter the amount they are owed using your Agent Commission Expense item.
• For example, if your brokerage earned $12,000 on a deal and the agent’s split is 70%, you would enter $8,400 as the payable amount.

Creating a Bill instead of jumping directly to a Check or Expense allows you to manage your outstanding obligations more clearly. It gives you visibility into upcoming payouts and helps you avoid missed or duplicate payments.

This method also keeps your commission workflow consistent from one closing to the next.

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Pay The Agent and Close The Loop

Once it is time to pay the agent, you can use the Write Check or Expense function.

Select the agent as the vendor, enter the payment details, and link the payment to the Bill you created. This closes it out and keeps your accounts payable accurate.

It helps to add a short memo or description so you can easily reference which property the payout relates to. That way, if questions ever come up, the information is right there on the transaction.

With the bill paid, the commission is fully recorded across income, expense, and cash flow. Your books now show exactly what your brokerage earned, what was paid out, and what remains as net income.

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Track Performance By Agent, Team, Or Office

If you want to take your reporting a step further, QuickBooks allows you to use Classes to tag transactions by agent, team, or office. When you assign a class to both the commission income and the agent payout, you create a clear path for evaluating profitability.

This is especially helpful for growing brokerages that want to understand which agents or branches are generating strong returns and which might need additional support.

Once classes are in place, running a Profit and Loss by Class report gives you a clean breakdown of income, expenses, and net results for each category. 

You can even drill into the details by clicking on each number, which makes it easy to review past closings or investigate unusual results.

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A Few Common Mistakes To Watch Out For

Real estate brokerages often run into the same challenges when tracking commissions. One of the most common is recording only the net amount after splits instead of the full commission income. This understates your revenue and makes your reports less meaningful.

Another issue is mixing agent payouts with other expenses, which makes it harder to see how much you’re actually spending on commissions.

Finally, skipping the Bill step can create confusion around what you owe and when it is due. Even if you pay agents quickly, entering a Bill keeps your records clean and consistent.

By keeping these small habits in check, you set yourself up for clearer reporting and fewer headaches during reconciliation.

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When to Bring in a Bookkeeping Specialist

Commission tracking is one of the most important parts of your financial workflow, and it becomes more complex as your brokerage grows. If your books feel disorganized or your reports don’t give you a clear picture of performance, it may be time to bring in a professional.

At Bookkeeping for Brokers, we work specifically with real estate brokerages to set up QuickBooks in a way that reflects how they actually operate so their financials finally make sense.

If you want a cleaner, more reliable system for tracking commissions or need help untangling your current setup, our team is here to support you.

Reach out anytime, and we’ll help you get your books running smoothly again.