Navigating Trust Accounting for Short-Term Rentals
Find out how technology can help streamline your accounting process and ensure your trust accounting is transparent, up to date, and compliant.
In this episode of the Hospitable Hosts podcast, we are joined by Craig Saunders, Founder of BookingTrust, an online trust accounting platform designed and built in Australia to comply with Australian and New Zealand Trust Accounting requirements.
Now, BookingTrust integrates with Hospitable. So our users in Australia and New Zealand can enable this integration to streamline trust accounting and financial management, reduce manual workload, and maintain clear, compliant financial operations at scale.
In the episode, Craig shares why he built BookingTrust, what the platform does for property managers, and how it helps them ensure accurate owner accounting and be compliant at tax time. Craig explains what trust accounting is in simple words and discusses common accounting mistakes that property managers make. He also shares his thoughts on the future of short-term rental accounting.
Press Play now to learn more about how the proper trust accounting software can help hosts and property managers ensure compliance with accounting regulations and make better business decisions.
If you prefer to read the highlights, we’ve got a summary of the key takeaways below.
How Craig Came up with the Idea of BookingTrust
Craig says that back in the early 2000s, he had some long-term rental properties in Sydney and couldn't find any property manager he was pleased with. As he has been in the IT industry since the 80s and was trained as a production engineer, Craig decided to create an online application for residential property management, which was sold in 2017.
“Just fortuitously, I found out that there was a little gap in the market for short-term trust accounting, and started off writing an interface to new books at that time. And it's really progressed from there to where it is now.”
What BookingTrust Does
BookingTrust is an online software platform designed to streamline accounting processes and help STR operators manage their trust or host accounts. It integrates with PMS to keep reservation and financial data synced and ensure a seamless experience for hosts and property managers who use BookingTrust to manage their accounts to comply with strict financial and regulatory requirements.
“We interface to PMS platforms mainly because there are requirements for the level of accounting that we provide,” Craig explains. “First of all, we have the software that makes the compliance. If you look at it in terms of what Hospitable does, their job is to get as much money as possible into the account. And that's where our software takes over. Whose money is it? How do you distribute it at the end?”
BookingTrust software automates and streamlines accounting, but STR operators who lack accounting skills may opt for account management services. There is an accounting team, which can help you keep your books in order.
“You send us your statements, we prepare the disbursements, do all the reconciliations, make sure it's all compliant,” Craig says. “You don't have to be in a trust accounting environment because all we're doing really is compliance accounting. So it just means that everything's done accurately.”
Minimum Accounting Infrastructure
Craig emphasizes that having a proper accounting infrastructure is essential for all STR operators from day one. You need a property management system like Hospitable for “getting the money into the account and organizing the front office staff,” and accounting software to manage your finances efficiently and stay compliant.
“There is no doubt that when you get to 10 properties, you are starting to realize that there is a lot more work involved, and you're starting to run behind. When you get to 15 properties, you are definitely well past. This is where clients start to approach us. So you're really better off starting the infrastructure right at the start.”
Importance of Proper Accounting
Craig emphasizes that proper accounting is crucial for the success of STR property management businesses. An appropriate accounting system provides clear financial information and minimizes the risk of errors, enabling property managers to make informed business decisions.
“If you're not doing things properly, you're losing money. We know that if you forget to charge the right fees to the owner, the owner will let you know if you've charged too much, but probably won't let you know if you've charged too little. I would say that without a proper system, you're probably out $100 a month per property for things you don't collect or refunds you don't record.”
Craig also notes that proper accounting is essential for building trust with property owners, which helps keep them satisfied and loyal.
“With the accurate, efficient system, the owners get paid on time, and they get paid accurately. So it's about owner retention, which is probably the most valuable aspect of your business. If you're not paying your owners accurately and on time, they will start to doubt your ability to manage their place and may leave. But I can tell you if you pay them accurately and on time, they will be very much less inclined to find someone else.”
Tune in to the full episode of the Hospitable Hosts podcast to find out how technology can help streamline your accounting process and ensure your trust accounting is transparent, up to date, and compliant.
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Table of contents
How Craig Came up with the Idea of BookingTrust
What BookingTrust Does
Minimum Accounting Infrastructure
Importance of Proper Accounting