Take Your Airbnb Business To Another Level By Incorporating Accounting Software
Updated: Jan 23
If you don’t want to handwrite everything in one of those general ledger books from the 1950s, you may consider digitizing your operation. We’re talking a little bit beyond digital spreadsheets as well, and utilizing robust and sophisticated accounting software to manage your Airbnb business.
The best part is that sophistication doesn't mean complex for you, but actually helps make accounting seamless and painful, so when you hand it over to your accountant at the end of the year for tax filing, they will thank you, and not chase you for those random receipts.
There are many accounting solutions for the Airbnb business, but some are much better than others, due to the fact that they may have fantastic benefits on their backend but aren't overwhelming when you start using them, giving you a manageable learning curve.
For those that are starting out, Wave offers such a light interface to get your Airbnb or vacation rental business looking much more professional than giving someone a PayPal.me link. First, let's factor in all of the expenses that you have while running a business. It will connect with your existing bank and credit card accounts and pull the transactions of your business, into a centralized place where you can start classifying your expenses while adding the necessary receipts.
It helps take in your revenues as well and tidies all these transactions into a nice end of the year tax document to simply click and email to your accountant, or better yet, give access to your accountant, so they can monitor your tracking and guide you if they see any errors. They also do a double-entry accounting, which will make your accountant smile, if they can.
Then comes the invoicing. Instead of spending hours creating your own invoice every single time from the ground up, Wave prepopulates a lot of information into a nice template. You can then pull the information for your customer and either print out a professional invoice for them or email it to them in PDF format.
All the while it will track all those accounting items that you forgot about because you’re running a business, such as sales tax calculations, overdue bills and invoices, profit and loss reports, and it will sync all of this up into a unified dashboard that will show your business financials and fiscal health all in one location.
This sounds amazing, right? It must be very expensive every year? Well, actually the fact of the matter is that this software is free. Their revenue model comes from offering payroll services, as well as a payment provider with competitive rates (something to consider if you are in need of either service).
Why even compare another software as a service when the above looked so good. Remember, Wave is a good place to start and stay if you want to be a small business and only run it that way. Freshbooks helps you advance to that next level and provides extended utilities beyond just invoicing and expense management. Keep in mind the features listed above are also covered in Freshbooks, so we'll talk about its additional features list.
Let's start off with its integrations, where, through a few simple clicks, you can connect several third-party applications with zero coding. These help bring connectivity to your business, and you need more than accounting to run it. Connect it directly with your Stripe account to integrate payments and all the transactions made on Stripe.
You can also accept any payment such as Visa, Mastercard, American Express, and other major credit cards and payment options. Stripe will also help protect you against fraud and those times when you need to issue a refund, without stressing about having to call a bank or payment provider.
Easily connect it with your Outlook or Gmail to important contacts and convert them into clients as well as send out invoices without switching between your email client or Freshbooks. This makes invoicing Airbnb guests a breeze. If you're using Shopify or Squarespace for a website, there are integrations as well to connect all transactions from your site directly into Freshbooks.
Then we can look at automation and notifications. Freshbooks helps keep your business finances healthy by automatically generating billing and invoices and sending them out to clients, saving you time to do something more important for your business. You can also add in your employees with limited access to manage certain projects or accounting tasks, taking the burden off your hands.
Your expenses are automatically imported and categorized based on what they were. All you need to do is snap a picture on your phone and attach it via the mobile application. This means you don’t need to collect your receipts and set up dates with yourself and you just digitize them on a periodic basis.
If you need to handle a construction renovation you can use the project's features, and add the general contractor to it, to help monitor the project, the timeline, and the overall budget and spending. After it's all done, that information stays in Freshbooks and helps with that tax write-off at the end of the year.
Reporting is beyond robust, offering expense reports, sales tax summary, profit and loss, account ageing, accounts paid, general ledger, trial balance, chart of accounts, and actually many more! As long as you're inputting the right information this is one of the top accounting solutions for the Airbnb business.
If this wasn't enough accounting software for Airbnb businesses, there's one final major tool that helps with growing your business, and that's the built-in client manager. This light CRM enables you to save and store your customers, or import them manually, or from your email contacts, and centralize them all in one location.
It also provides all the transactions and data of their stays with you, so you can start to see who are repeat clients and build out a client VIP list for you to expand and grow your business. You can have them opt-in for special communications, or a new Airbnb property you're opening somewhere else, or even offer that personalized service when they return, by simply signifying to them they are remembered.
The supporting mobile app allows you to be on the road without having to open your laptop every five minutes, where you can check the status of some items, track your mileage, and even generate invoices on the go when needed, allowing you to not keep thinking about all the accounting and bookkeeping you need to do when you return.
Regardless of which software you decide to go with, always know that you will need to pick a good accounting software for your Airbnb business because otherwise, you won't be able to focus on offering that critical customer service, or manage the operational aspect of the business if you're always drowning in a sea of paperwork and expense management.
You're already wearing many hats when running an Airbnb business, consider software such as Freshbooks to help remove one of those hats at least partially so that you can stress less, stay tax compliant, manage the financial health of your business property, and ultimately become a successful vacation rental and Airbnb property operator.