Common Bookkeeping Mistakes Mortgage Brokers Make (and How to Fix Them)

If you’re a mortgage broker, you already know how fast money moves in and out of your business. Between lender payouts, loan officer commissions, and client reimbursements, your books can feel like a constant juggling act. If you don’t have a clear bookkeeping process, it’s easy for small mistakes to snowball into big financial headaches.

Good bookkeeping helps you understand your numbers so you can make smarter business decisions, guide your business with true confidence, and coach your team based on real financial insights. Not to mention, it also helps you avoid nasty tax surprises once April rolls around.

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Let’s look at some of the most common bookkeeping mistakes mortgage brokers make and how to fix them before they throw your finances off track.

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Mixing Personal And Business Finances

This one tops the list for a reason. Many brokers start out using their personal credit card or bank account for business expenses. It feels harmless at first, but it quickly creates a tangle of transactions that’s hard to unravel later.

When your personal and business finances are mixed, you lose visibility into how your brokerage is performing. It becomes difficult to track expenses accurately or show clean records for state licensing or during an audit.

The best way to fix this is to keep things separate from day one. Open a dedicated business checking account and credit card, then run every business transaction through those accounts without exception. Most accounting platforms, like QuickBooks Online, can then automatically pull and categorize transactions. You’ll thank yourself later when it’s time to run reports or file taxes.

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Not Reconciling Bank And Credit Card Accounts Regularly

When things get busy, it’s easy to push bookkeeping aside and promise to catch up later. But skipping your monthly reconciliations is like skipping oil changes, sooner or later, the engine seizes.

When your accounts are not reconciled, it means you can’t trust your financial reports. Those missing transactions, double entries or outdated balances will lead to inaccurate profit figures and unwelcome surprises come tax season.

The best way to handle this is to make reconciliation a monthly routine. Check your bank and credit card statements against your books at least once a month. Even if your accounting software can help by flagging discrepancies, you still need to review them.

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Misclassifying Income And Expenses

Mortgage brokers often have multiple revenue streams such as origination fees from broker-owner production, loan officer commissions, and sometimes secondary market gains. You also have direct costs like appraisals, credit reports, and processing fees.

If everything ends up in the same income or expense bucket, your reports stop telling the real story. You might think a branch is performing well when it’s actually losing money, or overlook rising vendor costs hidden in a catch-all miscellaneous account.

A clean, customized chart of accounts is your best defense. Start by creating clear categories for each type of income and expense so you can track profitability by revenue stream or branch. Review these categories quarterly and make sure everyone on your team, especially your bookkeeper, uses them consistently.

Learn how to set up a customized Chart of Accounts for Mortgage Brokers.

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Forgetting To Track Reimbursable Expenses

Sometimes, small reimbursable expenses slip through the cracks. Let’s say your brokerage pays for a client’s appraisal or credit report, expecting reimbursement from the lender or borrower later. If those transactions aren’t tracked properly, you might lose out on being paid back.

There’s a simple solution to this, you can create a “Reimbursable Expenses” account in your chart of accounts. Anytime your team pays for something that should be reimbursed, code it there. Then, review that account monthly to ensure reimbursements are received and cleared.

Even better, use a digital expense app that lets you snap a photo of the receipt and attach it directly to the transaction. It keeps your records clean and makes life easier during audits.

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Delaying Bookkeeping Until Tax Time

Putting bookkeeping off is one of the biggest mistakes brokers make - waiting until tax season to deal with months of backlogged transactions. By then, most details are long forgotten, receipts have gone missing, and you’re working under stress to meet deadlines.

Timely bookkeeping gives you ongoing visibility into your business so you can see how much cash you actually have on hand, whether marketing spend is paying off, and whether commissions are trending up or down.

Set aside a little time every week to review and categorize transactions. If you’re too busy closing loans, consider outsourcing your bookkeeping to a professional who specializes in mortgage brokerages. It’s far less expensive than the cost of bad data or missed opportunities.

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Overlooking Payroll And Commission Tracking

Mortgage brokerages often juggle complex commission structures; some loan officers are paid a flat percentage, others are on tiered splits or receive bonuses for certain loan types. When commissions aren’t tracked correctly, both payroll accuracy and cash flow forecasting suffer.

To avoid this, use a payroll system that integrates with your accounting software and allows you to track commissions per loan officer. Then, map out your commission structure clearly, automate calculations as much as possible, and reconcile payroll reports monthly to make sure every payout matches the originating loan record.

This not only prevents costly errors but also gives your team confidence that their commissions are accurate and timely.

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Not Keeping Proper Documentation

In the mortgage world, documentation is everything. Those lost receipts, missing invoices or vague journal entries can all create problems during audits or tax reviews.

Good documentation habits make your bookkeeping airtight. It’s good practice to store digital copies of receipts and vendor invoices in the same place you manage your accounting. Most platforms allow you to attach files directly to transactions. If you’re still working with paper, scan them monthly and back up your files to the cloud.

It helps if you think of this exercise as protecting your deductions since every missing receipt could be a missed write-off.

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You Don’t Have To Do It All Yourself

Many brokers start out managing their own books to save money, but as the business grows, the complexity multiplies. Commissions, lender payments, marketing expenses, and multiple accounts quickly become more than a part-time task.

The truth is that bookkeeping is only as good as the time and expertise you put into it. A professional who specializes in your industry can not only clean up your books but also help you spot inefficiencies and opportunities for growth.

At Bookkeeping for Brokers, we help mortgage brokers, real estate professionals, and insurance brokers set up accounting systems that make sense, from chart of accounts design to monthly reporting and CFO-level insights. 

Ready to get started?

Reach out to our team today, and let’s make your numbers work for you.

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