Vacation Rental Bookkeeping: How to Get It Right
Vacation rental bookkeeping isn’t straightforward. Find out how to make it easier using accounting software that integrates with your PMS.
When you're running a short-term rental business, it's easy to focus on enhancing guest experience, scheduling turnover cleanings, growing positive guest reviews, and taking stunning photos that help your listings stand out.
But it’s also important to accurately track your income from bookings, expenses, and any other financial activities to prepare for tax season, make informed business decisions, and stay in control. Whether you manage a single property or a few hundred, solid vacation rental bookkeeping practices are crucial for the success of your STR business.
STR hosts and property managers have to juggle multiple tasks to stay on top of things, which can be overwhelming, but investing in all-in-one vacation rental software like Hospitable can help you simplify your workflows and save time. Our STR super app can help you streamline operations and automate all repetitive daily tasks, making your business more efficient.
What Is Vacation Rental Bookkeeping?
Bookkeeping is the meticulous recording of all financial transactions related to running your vacation rental properties and categorizing them using the chart of accounts. It includes tracking income from bookings, cleaning fees, and upsells, expenses such as OTA commissions, cleaning services, and supplies, and any other financial activities.
All your business transactions should be organized into the general ledger. It’s a consolidated record of accounts in which all transactions are classified as debits (expenses) or credits (income), and each record is assigned to a chart of accounts code. The general ledger records transactions on a double-entry basis and serves as the foundation for financial statements.
Vacation rental bookkeeping is an ongoing process that provides a comprehensive view of your STR business's financial health at any given time. It helps you identify opportunities for cost savings, make better pricing and growth strategy decisions, ensure tax compliance, and take advantage of tax deductions.
Vacation Rental Bookkeeping: Why Use Accounting Software, and What Are Your Options?
Managing finances for short-term rentals is fundamentally different from traditional long-term rentals. Vacation rental bookkeeping isn’t always straightforward because of multiple income streams, complex fee structures, and frequent transactions.
If you manage one or two STR properties, you can probably keep track of your income and expenses on a spreadsheet, although manually entering data isn’t an efficient process. But most STR hosts benefit from using vacation rental accounting software that can save countless hours and ensure your books are set up correctly from day one.
When you’re scaling your STR business, proper vacation rental accounting software is a necessity because it’s not just about tracking your income and expenses. It’s about improving efficiency, staying compliant, and making wise decisions as your portfolio grows.
And if you combine accounting software with a robust property management system like Hospitable, you’ll have a unified view of all your business operations and benefit from advanced analytics & reporting features. With Hospitable, you’ll be able to see how all your properties are performing in real time from our Metrics Dashboard and make informed decisions to grow your business.
Hospitable also integrates with trusted vacation rental accounting software tools to help you automate your bookkeeping and accounting, and stay tax compliant.
QuickBooks is one of the most popular accounting platforms for small and mid-size businesses. It provides a comprehensive suite of tools and features to manage everything from invoicing and expenses to guest payments and tax preparation.
Hospitable users can connect their QuickBooks account to Hospitable, and our system will automatically sync financial data from their published owner statements to ensure that reservation financials are categorized correctly in their accounting software. QuickBooks will then populate the balance sheet and profit and loss report with our data.
Explore how to connect and use the QuickBooks integration with an interactive demo below.
Clearing is a trust accounting and automated bookkeeping platform for property managers. It allows you to connect your revenue and expense sources and track all your transactions in one place. The tool matches booking information and bank account deposits automatically, so you don’t have to worry about reconciling your accounts. It also offers comprehensive reporting features.
VRPlatform is all-in-one trust accounting software for vacation rental managers. It features a full-functioning general ledger, bank reconciliations, owner statements, advanced automations, and more, and allows you to automate all your bookkeeping and accounting processes.
Hostkit is an accounting and operations platform built in Portugal, specifically for vacation rental managers, to automate legal and fiscal obligations. The software is certified by the Portuguese Tax Authority and is fully compliant with Portuguese tax rules.
Owner Center provides STR property managers with a solution to simplify owner management. It offers owner reporting and accounting tools with customizable statements and dashboards.
Vacation Rental Bookkeeping: Tips for Hosts
Vacation rental bookkeeping software can significantly streamline your bookkeeping process, eliminating manual data entry and giving you time to focus on other important aspects of your business. But there are also some steps you should take to keep your books in order.
Create a separate bank account for business transactions. Keeping vacation rental business and personal finances separate can prevent confusion and even legal issues. Using a dedicated bank account for all transactions related to your STR business makes it easier to track your business income and expenses, simplifies tax filing, and gives you confidence in your numbers.
Track all your STR expenses in real time. Organize your expenses into categories, including cleaning and maintenance, supplies and furnishings, utilities, platform commission fees, and more, and tag each property. Categorizing expenses helps you understand where your money goes and makes reporting easier. It’s essential during tax season when you need to organize deductible expenses and claim deductions to reduce your taxable income.
Maintain separate books for each short-term rental property. Classify income and expenses appropriately for every vacation rental property you own or manage. This practice will help you understand which of your rentals are the most profitable and ensure accurate tax reporting.
Final Thought
Effective bookkeeping practices are the backbone of a successful STR business. Mastering them is a strategic advantage that will help you create the foundation for sustainable business growth. Vacation rental bookkeeping can be tricky, especially if you manage multiple properties, but you can streamline the process with reliable and efficient accounting software that integrates with your PMS.
