Vacation rental bookkeeping tips

When you manage your own vacation rental, the amount of paperwork can seem endless.

Digging through those folders packed with receipts, contracts, spreadsheets, and records can feel daunting–especially when tax time nears.

Tax season or not, it’s never too late to evaluate your processes for tracking your Airbnb and Vrbo business expenses and income, plus decide on ways to streamline and improve them for next year. If you’re drowning in paperwork—rest assured it can get easier. Here are some simple and quick-to-implement solutions to help you keep your books up to date without the hassle.

1. Put bookkeeping on your calendar

Keeping track of your expenses doesn’t have to be complex. Consider spending 30 minutes or so on bookkeeping every month. Or, break the work into even smaller pieces by setting aside dedicated time each day or week to update your records. Find what works for you and set up your own routine.

2. Use a dedicated credit card

Stick to the same credit card for all of your business expenses, then try to pay off the balance each month. This works even if you have multiple vacation rental properties. When you review your bookkeeping, you simply have to assign the purchases to the right property and let your spreadsheet calculate your totals.

3. Access your accounting from anywhere

If you’re not already using a cloud-based accounting software system—such as Quickbooks Online, Mint, or Xero—consider making the move. Since the software is web-based, you can access it and record your expenses from anywhere. Link your credit card and bank account so that expenses feed right into your account, where they will be tracked and categorized automatically. Then, you’ll be able to create expense reports with just a click.

4. Jot down notes for every purchase

When possible, write relevant notes on the backs of your receipts so that you know exactly which expense categories they relate to. Meals and entertainment, travel, vehicle, and home office expenses are among the main choices. For instance, if you have a receipt from a business meal, write down who was present and the purpose of the meeting. This kind of paper trail is important, as it will help support your case in the event of a tax audit (credit card statements are not sufficient).

5. Digitize your receipts

Buried under an unwieldy stack of receipts and bills? There are numerous cloud-based apps to store your paperwork as digital files instead, such as HubDoc. You can simply take photos of any paperwork with your smartphone and even forward email invoices right from your inbox. If you’re working with an accountant or a bookkeeper, this eases their workload, as they can access your bills and receipts without having to pick up a shoebox from your office.

6. Set up recurring purchases or subscriptions

After organizing your short-term rental expenses, you may start to see a spending pattern. You can then plan out your spending with recurring payments on sites like Amazon. If you set up purchases at the beginning of each month—such as bulk orders of paper towels and laundry detergent—you’ll know roughly how much you’re going to spend each month before the year even starts.

7. Don’t forget about contractors and vendors

If you pay a contractor to do work on your vacation rental—and the cost is more than $600—you’ll owe them a 1099 at the end of the year. This is easily managed in programs like Quickbooks Online. Not only can you track how much you paid each contractor, but you can also prepare and file your 1099s from within the software.

8. Hire a good accountant

Sure, you can go the DIY route and handle all your own bookkeeping. But hiring a professional accountant—especially one who is familiar with the laws related to the vacation rental industry and related expenses—will save you time and money. However, you’ll still need to keep good records of your expenses to make the best use of their time.

9. Work with a vacation rental property manager to streamline finances

As a full-service vacation rental management company, Vacasa automatically tracks your annual earnings, supplies tax forms and owner statements, and provides end-of-year tax and expense reporting—all available in a simple online account.

Staying on top of your vacation rental expenses—then allocating and organizing them correctly—can help keep your business running like a well-oiled machine. But the pile of receipts may soon become daunting, so it’s important to use tips like these to streamline your bookkeeping (and save your sanity).