How to Track Commission Income in QuickBooks as a Broker

If you run a brokerage, commission income rarely moves in a straight line. Payments come in at different times, splits vary by deal, and money often passes through your account before it ever really belongs to the business. Add in referral fees, overrides, and shared commissions, and it does not take long for the numbers to feel confusing.

Many brokers come to us saying the same thing. Their bank balance looks fine, but they cannot clearly answer how much commission the business actually earned, how much is still owed to agents or loan officers, or which parts of the operation are truly profitable. The issue is usually not QuickBooks itself. It is that the system is not set up to match how commission income actually flows through a brokerage.

With the right structure, QuickBooks can give you a clear picture of commission income across real estate, mortgage, and insurance businesses. You can see gross commissions, track payouts accurately, and understand what the brokerage keeps after splits and expenses. This guide walks through a practical way to do exactly that.

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Start With a Clean Structure in QuickBooks

Before recording any commission activity, it helps to make sure your Chart of Accounts reflects how your brokerage earns and pays money. This foundation is what allows your reports to tell a clear and reliable story.

At a minimum, most brokerages should have the following accounts set up:

Commission Income
This account is used to record the full commission earned on a transaction before any splits or payouts. Keeping this separate from other income sources like consulting fees or service charges makes it much easier to analyze performance.

Commission Expense
This account tracks what you pay out to agents, loan officers, or producers. When commission payouts are mixed into general expenses, it becomes difficult to understand how much it actually costs to generate revenue.

Separating these two accounts allows you to see gross commission income, total payouts, and net results clearly on your Profit and Loss report.

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Set Up Agents and Producers Correctly

Most brokers, agents, and producers are paid as independent contractors. In QuickBooks, this means they should be set up as vendors.

Each person you pay commissions to should have their own vendor profile. This helps you track amounts owed, review payment history, and maintain clean records as your team grows. Even if you pay someone quickly after a deal closes, having a vendor profile creates consistency and reduces confusion later.

Clear vendor setup also makes it easier to answer questions when someone asks about a past commission or when you need to review activity across multiple deals.

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Record the Gross Commission First

When a deal closes or a policy is written and the brokerage earns a commission, the first step is always to record the full amount earned. This is true whether you are a real estate broker, a mortgage broker, or an insurance agency.

If the commission payment is received immediately, you can use a Sales Receipt. If the payment will arrive later, use an Invoice.

Either option works. The important part is that the transaction records the total commission before any splits or deductions. This ensures your income reporting reflects the true scale of your brokerage’s activity.

If a transaction includes multiple revenue components, such as referral income or administrative fees, list them as separate line items. This adds clarity and makes your reports more useful over time.

Once this step is complete, QuickBooks shows the full commission income generated by the deal.

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Record What You Owe to Agents or Producers

After the commission income is recorded, the next step is to document what portion is owed to the agent, loan officer, or producer.

The cleanest way to do this is by creating a Bill in QuickBooks.

Select the agent as the vendor and enter the amount owed using your Commission Expense account. For example, if your brokerage earned $15,000 in commission and the producer receives 65%, you would enter a bill for $9,750.

Using a Bill instead of jumping straight to a payment gives you visibility into what you owe and when it is due. It also creates a consistent workflow across transactions, even when payouts happen quickly.

This step is especially helpful as volume increases or when multiple commissions are outstanding at the same time.

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Pay the Commission and Close the Loop

When it is time to pay the agent or producer, record the payment and apply it to the Bill you created. This clears the payable and keeps your accounts accurate.

Adding a short memo, such as a property address, loan number, or policy reference, makes it easy to trace the payment later if questions come up.

At this point, the full commission cycle is reflected in your books. Income is recorded, expenses are documented, and cash movement is accurate. Your reports now show what the brokerage earned, what was paid out, and what remains as net income.

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Track Performance by Agent, Team, or Office

For brokerages that want deeper insight, QuickBooks offers Class or Location tracking. This allows you to tag transactions by agent, team, branch, or business line.

When both commission income and commission expenses are assigned the same class, you can see profitability by individual producer or group. This is especially useful for brokerages with multiple offices or mixed commission structures.

Running a Profit and Loss by Class report gives you a clear breakdown of income, expenses, and net results for each category. You can click into the numbers to review specific transactions and identify trends over time.

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Common Commission Tracking Mistakes to Avoid

One of the most common mistakes we see is recording only the net commission after payouts. This understates revenue and hides the true scale of the business.

Another issue is combining commission payouts with unrelated expenses. This makes it harder to understand margins and assess performance.

Skipping the Bill step is another frequent problem. Even when agents are paid quickly, entering a Bill creates clarity around obligations and prevents duplicate or missed payments.

Small process changes like these can make a significant difference in how reliable your financials are.

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When It Makes Sense to Get Help

Commission tracking becomes more complex as a brokerage grows. More agents, more deals, and more payout variations increase the risk of messy books and unclear reporting.

If your QuickBooks reports do not give you confidence, or if commission tracking feels inconsistent from deal to deal, it may be time to bring in support.

At Bookkeeping for Brokers, we specialize in bookkeeping and CFO services for commission-based businesses across real estate, mortgage, and insurance. We help brokers set up QuickBooks systems that reflect how their business actually operates, so the numbers finally make sense.

If you want help cleaning up your commission tracking or building a system you can trust, book a call with us, our team is here to help.

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