Tracking the rental income and expenses of an Airbnb business takes up 25% of a host time. On top of answering the booking inquiries and housekeeping, bookkeeping ranks third most time-consuming task for an Airbnb host.
For the Airbnb management company that manages someone else's properties, the need for a bookkeeping system is inevitable. As you can read in this thread on the Airbnb forum, the Airbnb management companies are looking for bookkeeping software. The common requirements of accounting software for Airbnb are:
- to track expenses and rental income,
- to auto-generate reports for each property owner.
As the Airbnb property owner or operator, you might be looking for the easiest way to keep track of the money in and out. You realize the crucial need to have Airbnb accounting software instead of record and keep track of them manually. With the right Airbnb accounting software, you will be able to handle the cash flow with ease.
Why Can't We Use the Available Accounting Software for Airbnb Business?
Whether you are an Airbnb property owner or an operator, you might be looking for the easiest way to keep track of the money in and out. Unfortunately, since all the available accounting software does not import rental income from Airbnb, it's hard to record the rental income and to track guest deposits. As a result, many hosts resort to manual data entry for bookkeeping until companies like Softinn came up with a solution like this.
On top of that, most of the accounting software does not support the calculation of profit-sharing schemes. For an Airbnb management company that has a profit-sharing and expenses-sharing arrangement with the property owners, the attempt to implement the calculation on standard accounting software is almost impossible, if not doable.
The primary value of bookkeeping in business, for a business owner, is to analyse the reports generated for business improvement purposes. Unfortunately, it's hard to study your Airbnb business with the financial statements because of its lack of these dimensions - occupancies, the average length of stay, guest origin, seasonal sales vs off-season seals, etc. Nevertheless, that is why many hotels businesses rely on the reports available on the PMS (Property Management System) to improve their business.
Accounting Software for Airbnb Business
Accounting software is innovated to assist bookkeeping. With the right accounting software, you will have the tools that you need to track your business performance. Along with that, you will get insights into how you can improve your financial planning, generate monthly statements and reports, the revenue and expenses breakdown, etc. Let me share some of the main reports for the Airbnb business, yet easy to generate if you have the right Airbnb management software.
Track all the expenses that you have spent in a day or a month. You will see the breakdown of how much you have spent on utilities, internet, cleaning, laundry services, etc. You get the idea of whether you have used within the budget or exceed the budget. Look for a solution that supports expenses tracking by the property. You will find it handy when you're managing someone else's property.
If you are the property operator, the payout report generation will be the most crucial automation you will need because the property owners expect a monthly statement with breakdowns. Accounting software exists so that you don't have to worry about creating the reports manually. The best part is, you can also set the recurring date in advance so the system will help to generate the payout report and send it to the right person recurringly.
Profit & Loss Report
Some hosts that I spoke to do not know their business profit until the end of the month; this is risky because the chances of running on a loss are high. If you have access to this info in real-time basis, it opens up the opportunity for you to fix it; maybe you can run a promotion, or you can reduce the cost if you knew upfront. Get to know how profitable your Airbnb business is at a glance. You do not need to crack your head to pull out the report when you need it.
Airbnb Operators and Owners Profit-Sharing
Based on my research, in general, the Airbnb management companies offer three types of business models:
- profit-sharing model,
- guaranteed return model,
- sublet (or rental arbitrage) model
To support the above business models, the Airbnb accounting software needs to support the recordings of the income and recordings of expenses. Then, at the end of the month, generate a statement for the property owner and financial reports for the Airbnb host. The functions do not limit to financial reports; but it also covers the reservations, tracks guest payments, guest folios, and the contract between property operators and the owners.
Since most of the Airbnb management companies we interviewed have some sort of profit-sharing model with the property owner, we suggest looking for a solution that covers both the operation and the accounting side of the business.
Imagine if you have this all-in-one solution, to set up the Airbnb profit-sharing contract between you and the property owners. At the same time, you can also invite the property owners to view certain reports to be more transparent while doing the business. It could be something that can help to gain more confidence from the owners while signing up the contract with you.
Integration with the Standard Accounting Software
If you're using a PMS to manage your Airbnb business and standard accounting software for bookkeeping, make sure you look for a PMS supporting transaction export. To get the most out of both software, make sure your PMS allows you to export transactions by payment accounts and support transaction reconciliation. Ask for trial account before you purchase. Furthermore, make sure you set up the PMS so that all the reservations will automatically be sync to your PMS and the payments automatically be recorded to the payment accounts; this will save you tons of time later. So, you can scale your Airbnb management business without worrying about the daunting bookkeeping tasks.
Choosing the Right Airbnb Accounting Software
While you are scrolling, you might be searching for the right Airbnb accounting software to keep track of your business performance and at the same time, need to have a better bookkeeping system to handle it easily.
Softinn offers all-in-one solutions for your Airbnb Business. From reservations lists, track guest payments, sync calendars' availability and room rates if you have properties listed in more than one channel. It allows you to set up the contract between you and the owners according to your plan and needs either 50-50, 30-70, sublet, or guaranteed return. Then, it provides you the reports for you and the owners, where you can set on which date you want the system to auto sending it.
What accounting software that you are using currently? How do you track the profits and prepare the monthy statement?