Your life as an Airbnb host is a bizarre blend of hospitality, property management and so arguably, most difficult for hosts entrepreneurship. You’re doing it for the other reasons, too; you have to find nice things to tell your guests about. But life as an Airbnb host can quickly spiral out of control. Consumers love the experience but they need you to be able to track your income and expenses too. Keeping track of multiple booking platforms, keeping track of numerous expenses, and looking forward toward tax season requires a level of organization not possible using spreadsheets and shoeboxes full of receipts. That’s where specialized accounting software comes in and not just as a convenient tool, but as an integral part of your run-of-the-mill short-term rental business. The right accountancy software can make complex work easy, give you clear financial data, and save you time and money. Hosts looking to find the best accounting software for Airbnb arrive at the idea from the beginning looking for a solution that speaks the language of short-term rentals. Many general accounting programs have been developed to work with standard product companies like Apple or Google and don’t have the features a host needs. The perfect platform is like your own dedicated financial co-host.
Why Generic Accounting Software Falls Short for Airbnb Hosts
Often, when you first open an account, many new hosts make the mistake of forcing their Airbnb finances into generic, out of the box accounting software or, even more dangerously, a spreadsheet. These are better than nothing, but they are significantly non-functional for running a business on short-term rentals. The biggest issue is categorization. Generic software might have categories for Sales and Cost of Goods Sold, but it will have no built-in logic to recognize and separate an Airbnb cleaning fee from a booking Baselane payout, and neither will it have any built-in logic to differentiate a utility bill from a restocking of guest supplies. This lack of specificity creates a manual data entry nightmare. You’ll have to manually reconcile every single transaction, interpret payout statements from various platforms, and create your own chart of accounts. Not only is this work incredibly time-consuming, but it is also heavily susceptible to human errors. Just one miscategorized expense can throw off your profit calculations and create major headaches when tax time comes around. These systems cannot automatically take into account mileage driven for property-related activities which is a common deductible expense for hosts.
Essential Features to Look for in Your Airbnb Accounting Solution
When you think about which accounting software to use you should go beyond just general bookkeeping. The best accounting software for Airbnb will come with a set of features that are designed and built for your business particular model. The items on your list that are not negotiable. You should be able to sync your software with the major short-term rental platform that you’re using, AirBnB, Airbnb, etc. This is the core piece of automation that pulls all your bookable income, guest fees, and platform charges directly into your software with no manual work. This way you eliminate the risk of having data entered incorrectly, and your revenue tracking is always current and accurate. Intelligent Transaction Categorization After you have your bank accounts and credit cards linked, then you should see that the software does a little bit more than just import the transactions. When you send a payment to a specific cleaner, the system should automatically categorize it as cleaning if you purchase something at a home improvement store, as Maintenance & Repairs if you make a mortgage interest payment, as “Loan Interest”.
Streamlining Your Financial Workflow with Specialized Tools
A specialized accounting solution makes managing your finances more automated and time-efficient. Instead of spending hours each month making money, you’re automating much of the work and turning it into passive activities. As soon as someone leaves your house, you’ll be able to log in and see how much income you’ve generated, and how much expenses are being accounted for as soon as you swipe a credit card. That’s pretty cool. You don’t have to feel worried about how your business is doing — you know with certainty right now. The workflow also allows you to conduct better financial discipline. Since you’ve got all of your financial info in one place, it’s much more likely that you’ll record small expenses, and keep digital receipts for them. With so much information at your fingertips, this will help you budget efficiently, predict risk, and make money decisions based on data-driven analysis of your property. For any host that’s wondering what the best accounting software is for Airbnb, the answer is how quickly it can seamlessly build this automated, insightful financial ecosystem.
The Tangible Benefits of Automating You’re Hosting Finances
This investment in a specialized accounting system, like Baselane, pays for itself many times over. Intangible benefits include time. The hours you spend manually entering and reconciling your financial data each month can be used to improve the service you provide your guests, market your property, or simply have a better work-life balance. It’s not a fair trade. Using analytics as a way of operating the business is what separates hobbyist hosts from becoming business owners. Next, and perhaps most importantly, is the benefit of peace of mind. Tax season becomes a simple report run without the usual day and night race to gather in a year’s worth of financial data. You’ll know you’re taking all eligible deductions and have the full digital paper trail ready in case an audit occurs. All of your financial management headaches are taken away. You’ll be able to focus on the fun aspects of hosting.
Conclusion
It’s the foundation of how your short term rental business will continue to grow and succeed. Of course, there are a lot of accounting programs on the market. But you want to make sure that your solution is not just an accounting system, but a financial partner designed specifically to help you manage the business side of hosting. By creating automation, incorporating smart categorizations and reporting for the short-term rental niche, you can move your financial admin process from a stress-fuelling chore into a business boosting one. As technology in short term rental rentals continues to evolve, making use of technology to streamline operations is no longer a luxury; it has to be a necessity. Taking up a cloud-based Baselane is the final step toward mastering the business side of hosting and ensuring that the success of your Airbnb venture will stand the test of time. For those who want to find the best accounting software for Airbnb, there is one track to take to ensure your success.
