You may never get around to filing your accounts with the government because you wind up drowning in piles of receipts, spreadsheets, bank statements, and wondering where all that potential income went. The truth is, manual bookkeeping not only deprives you of spending time you should be doing, it also drives down your profit margin. Simply put, automating your financial management can change the way you think about everything you earn from a rental. By automating your bookkeeping, you can turn your financial bookkeeping from a drag on your shoulders into the engine that will drive your profits upward.
The Hidden Costs of Manual Bookkeeping for Airbnb Hosts
First I’d like to dig into what manual accounting is costing you. When you use spreadsheets, or paper ledgers, for example, you aren’t just spending a few hours a month on additional risk and opportunity costs. Human error is inevitable, and any “missing decimal point” or accidental receipt can result in inaccurate analysis of your profit or, worse, insidious errors on your taxes. More importantly, the hours you spend manually categorizing expenses, and reconciling transactions are hours you’re not spending growing your business, improving your listing or enjoying your life. This wasted capital directly drags down your bottom line. That’s not even the biggest impact, though. With no real time data, you’re running blind. You can’t make sense of dynamic pricing, new amenities, or cost-cutting measures because there’s no visual depiction of where your financial health is right now.
How Automated Accounting Tools Transform Your Financial Workflow
Automated accounting software for airbnb is specifically built to handle the very specific needs of managing short-term rentals. These types of tools connect directly to your Airbnb account, to your bank accounts (or even your credit cards), and provide you with a seamless stream of account and financial data.
The Critical Need for Security in Your Financial Operations
When you’re moving your sensitive financial account information to a third-party platform for your accounting, security must be a no-brainer. You really do need something robust and reliable to protect that data. A trustworthy automated accounting tool invests heavily in bank-level encryption and secure data protocols to protect your information. That means that your login information and financial information are encrypted while you send and store it. Any unauthorized parties won’t be able to get at that information. Measure whether or not the software offers security capabilities.
If you’re going to leave your business behind on your own personal computer, even just remotely, use a dedicated platform for accounting. You won’t put your confidential financial information on your PC or in dozens of email inboxes. It can be hacked and potentially compromised by scammers. So make sure you’re ensuring that you need security in the core software platform.
Key features to look for accounting
The best accounting software for Airbnb should have direct integration with the different booking systems (you might be using Vrbo) so all your reservation data syncs automatically. It should also have automated expense tracking and categorization so you don’t have to spend time writing things down in front of you or copy and pasting them out. One of the primary features you will need is receipt capture: just take a picture of your receipt on your phone, and that data will be read by the software and match it to whatever transaction it is matching. There are a lot of other reporting features that you might be able to use. There are profit and loss statements, expenses breakdowns and occupancy analytics to generate in under an hour. Next you may be looking for tax preparation support: you can find out what expenses you can deduct and create schedules for your accountant.
A Deep Dive into a Purpose-Built Solution
Hosting apps, like, are thriving in the wake of this trend. As you might have heard, it is not a software program that you have to use when it comes to making payments for rental properties. Rather, it’s a platform that is built specifically by real estate investors and managers. What sets them apart is that when it comes to accounting, they also include banking services. They have an array of high-income checking accounts specially geared for landlords. That means that you can keep track of all of your income and expenses within one place, which further minimizes the stress of running out reports and statements. The secret here is that Baselane gives you a 360-degree picture of your home in real-time, which means that you can pull out all your reports and numbers much quicker. By centralized financial management, you lower the risk that you’ll have the headaches of multiple apps and statements.
From Data to Dollars: Making Smarter Business Decisions
The biggest goal of automation of your accounting process is not just to have your books in order—it’s to make more money. With automation tools you can maintain complete control over the data you track. The tools are only going to help you go beyond problem-solving into the optimization of making profit. And you can create reports to see how much money you spent on a newly installed kitchen.
Conclusion
The biggest goal of automation of your accounting process is not just to have your books in order, it’s to make more money. With automation tools you can maintain complete control over the data you track. The tools are only going to help you go beyond problem-solving into the optimization of making profit. And you can create reports to see how much money you spent on a newly installed kitchen.