Hosts hoping to select the best accounting software for Airbnb have come to the right place. Business accounting is a crucial part of Airbnb property management, and the right vacation rental accounting software can help Airbnb hosts easily keep track of their income, expenses, and overall finances. The average Airbnb host isn’t an accountant, and they need an intuitive piece of software that will help make their rental the best Airbnb possible. This article will go over the basic definitions of bookkeeping and accounting and what to look for in Airbnb management software. It’ll also provide 12 great recommendations for the best accounting software for vacation rentals.
- 1 What Are Bookkeeping and Accounting?
- 2 Why Are Bookkeeping and Accounting Important for Vacation Rental Businesses?
- 3 The Basics of Bookkeeping and Accounting for Airbnb
- 4 Helpful Features to Look For in Accounting Software
- 5 Top 12 Best Accounting Software for Airbnb
- 6 FAQs (Frequently Asked Questions)
- 7 List Your Vacation Rental on RentalTrader
What Are Bookkeeping and Accounting?
The terms “bookkeeping” and “accounting” are frequently used interchangeably, although they technically have different definitions. Bookkeeping refers to the recording of financial transactions, and it’s part of the accounting process. Meanwhile, accounting is the general practice of managing a business’s finances.
Why Are Bookkeeping and Accounting Important for Vacation Rental Businesses?
Bookkeeping and accounting are essential parts of any business, and the vacation rental industry is no different! Without bookkeeping and accounting, vacation rental owners will have a hard time managing their finances and determining how much they’ve earned. Bookkeeping and accounting are also important for tax purposes and general business growth and development, so they’re an essential part of the best accounting software for Airbnb.
The Basics of Bookkeeping and Accounting for Airbnb
Here are a few simple steps for hosts wondering how to get started with Airbnb bookkeeping and accounting.
1. Open a Bank Account Specifically for the Business
First, vacation rental owners must open a bank account that is specifically for their vacation rental business. Trying to keep vacation rental transactions separate from personal transactions within a single bank account can be quite a challenge.
2. Consider Hiring a Skilled and Reliable Accountant
Vacation rental owners may want to consider hiring an accountant to take care of the business’s finances. This might not be an option for every vacation rental host since keeping an accountant on retainer is a notable expense. Still, those who have larger vacation rental businesses or aim to scale their businesses can absolutely benefit from hiring a skilled accountant to keep their finances in order.
3. Choose the Right Accounting Software and PMS
Rather than hiring an accountant, many vacation rental owners choose to keep track of their finances themselves by using accounting software and property management systems. Learn more about the best accounting software for Airbnb below, and check out this article comparing ten of the most popular property management systems for more information on the best PMS.
4. Automate Income and Expense Filing
Manually inputting all income and expenses can be a time-consuming hassle, but luckily, accounting software and property management systems make things simpler by enabling automation. Although some hosts are hesitant to automate and prefer to do everything themselves, automation is key for anyone who plans to grow their businesses and doesn’t want to expend unnecessary time and energy on repetitive tasks.
Helpful Features to Look For in Accounting Software
What should hosts look for while choosing the best accounting software for Airbnb? Here are several helpful features.
Profit and Loss Reports
Profit and loss reports show vacation rental owners the profitability of their business at a glance. They provide a summary of profits, losses, expenses, and revenues during a given time period.
A tax preparation feature helps vacation rental business owners prepare to file their taxes. It tracks income and expenses to allow for the estimation of quarterly taxes as well.
A feature that’s especially helpful for vacation rental owners, payment logs help track which guests have made payments for their bookings.
Invoice Details and Status Reports
Invoice status reports let vacation rental hosts know which guests have viewed and paid invoices. Invoice details generally allow hosts to sort and filter their invoices using various criteria.
Expense reports are a necessary part of accounting software that show vacation rental business owners how much they’re spending and what they’re spending on.
Double-entry accounting is a useful feature that tracks each transaction as two separate entries (a debit and a credit) and helps to improve accuracy.
Top 12 Best Accounting Software for Airbnb
Quickbooks is considered the #1 accounting software for small businesses, which makes it a great choice as the best accounting software for Airbnb. Pricing starts as low as $12.50 per month (or $90/month for the most advanced version). The most popular plan has tons of features and allows users to track income and expenses, invoice and accept payments, maximize tax deductions, run comprehensive reports, and so much more.
Topnotepad’s claim to fame is that it is feature-rich, yet simple. Topnotepad has quotations, invoicing, payments, expenses, accounting, and reporting. It’s intuitive and affordable, and vacation rental hosts can try it out for free for a week. After that, pricing begins at $12.50 per month.
Freshbooks is accounting software built for business owners, their clients, and accountants. It has easy-to-use features including invoicing, expenses, time tracking, projects, payments, reporting, accounting, and a mobile app. Freshbooks can be used for free for the first 30 days, and after the trial period has ended, prices start at $4.50 per month, with the most popular plan costing $7.50/month and the most comprehensive plan costing $15/month.
The amazing thing about Instabooks is that it’s totally free accounting software for United States small businesses. It has numerous features and tools, such as invoicing, a sales tax calculator, payments, an expense tracker, a bill manager, bank reconciliation, financial reporting, and more. It’s clear to see why Instabooks made it onto the list of the best accounting software for Airbnb hosts.
Created for small businesses, Xero has flexible bank reconciliation, invoices, and sales tax features. Users can try Xero for free for 30 days, and the most affordable plan is only $12 per month. The most popular plan is $34/month, and the most advanced plan costs $65/month. Xero’s most frequently-chosen plan comes with the ability to send invoices and quotes, enter bills, reconcile bank transactions, capture bills and receipts, bulk reconcile transactions, and create a short-term cash flow and business snapshot.
Wave Accounting markets itself as “accounting software that works as hard as you do.” It’s easy, free, and intuitive software, and users can get started in seconds. Notable features include unlimited bank and credit card connections, income and expense tracking, instant updates for invoicing, payroll and payments data, customizable invoicing, and exportable accounting reports.
AppFolio is cloud-based property management software with powerful accounting features such as smart bill entry, automated AP, flexible real-time reporting, performance insights, loan tracking, online payments, and more. AppFolio’s pricing starts at $1.40 per unit per month and requires a minimum monthly fee of $280.
8. Rentec Direct
Rentec Direct is another property management system that doubles as one of the best accounting software for Airbnb hosts. Its complete accounting system includes full bank, property, and tenant accounting features with general ledger accounting. Pricing begins at $35/month for one property, and the first two weeks are free.
Buildium is a property management system with built-in accounting software. It allows users to follow every transaction, manage accounts payable, and reconcile bank accounts automatically. Buildium comes with a 14-day free trial and then starts at $50 per month.
10. Property Matrix
Property Matrix has numerous accounting features that are perfect for vacation rental hosts. These include online payments, check scanning, check printing, separate sets of books, line items, automation, owner statements, transaction history, custom reports, and so much more. Pricing begins at $400 per month, with the most popular plan costing $475/month and the most advanced plan costing $1200/month.
Stessa focuses on “rental property finances made simple,” and users can easily track rental performance, automate income and expense tracking, and manage and grow their portfolio from one location. The amazing thing about Stessa is that it’s 100% free and allows users to run unlimited monthly reports on their properties, making it a contender for the best accounting software for Airbnb.
12. MRI Software
MRI is “property management software that works for you.” It has accurate, timely financial reporting that can be integrated with property management. There’s a general ledger, accounts payable, corporate accounts receivable, fixed asset accounting, vendor pay, AP automation, lease accounting, debt management, and much more. Pricing must be requested.
FAQs (Frequently Asked Questions)
What is the difference between accounting and bookkeeping?
Bookkeeping is technically a part of the accounting process. It’s an administrative task in which financial transactions are recorded. Accounting, however, is a more subjective matter. It provides insights on the business’s overall financial health that are based on the bookkeeping information.
Who needs accounting software?
Anyone who is running a business should have accounting software. It makes it much simpler to keep track of transactions, invoices, expenses, and revenue. Without accounting software, there’s a much larger margin for error.
How much does accounting software cost?
Many free options are available, but more comprehensive accounting software can cost as much as $1000 per month. The cost of accounting software can vary quite a bit, and there are many different choices available at multiple price points, so there’s something out there for everyone.
List Your Vacation Rental on RentalTrader
Finding the best accounting software for Airbnb is only part of having a successful vacation rental property; identifying the best places to list your property is just as important! That’s why you need to check out RentalTrader, the listing site that aims to make the vacation rental industry more cost-effective. With free listings, easy sign-up, no guest fees, and only 4.5% booking fees for hosts, joining the RentalTrader community is a no-brainer. List your property on RentalTrader today!
If you want to know more about the best accounting software for Airbnb in 2022, consider watching this video we have prepared for you: