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Quickbooks for Short Term Rentals
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Quickbooks for Short Term Rentals

If you’re a short-term rental owner, there’s an app for that. Quickbooks is the perfect solution to help you manage your books and keep track of payments from guests. It’s easy to use, and what’s more, it’s FREE!

Quickbooks for Short Term Rentals makes it super simple to get started. You can import your previous year’s income and expenses from your bank account with just a few clicks. Then, using the simple dashboard, you can create invoices and receipts for each booking—and even send them to your guests automatically!

Quickbooks for Short Term Rentals

QuickBooks Enterprise Income Tracker


QuickBooks Enterprise is QuickBook’s most advanced offering and includes in-depth financial management.
It’s crucial to keep in mind that there isn’t a specific QuickBooks edition created for the real estate or property management industries. You’ll need to be adaptable and potentially make a few tweaks and alterations to the application in order to get it to function the way a property owner would like.

For example, in QuickBooks you’ll be able to create and manage two company files:

Rental property company: For collecting rent, paying bills, and managing the property for the owner
Property management company: A file for receiving income for managing properties
As a result, you will be able to set up renters, vendors, accounts, and products, record security deposits, track rent income, record expenses for each property, and pay the property owners while still maintaining the separation of the firms’ transactions. You may set up property owners as clients, create accounts and goods, and track property management revenue from the property management perspective.

It is advisable that you look into a more sophisticated system if your property management company manages a number of large properties or various complexes. It can be preferable for a licensed property manager to find a trust accounting system. These facts are constant regardless of the accounting software used to conduct property management accounting:

Once rent is received from the tenants, it needs to be disbursed to the property owners. This money should be kept in its own account and separate from any account that is used to pay expenses.
Any money also received from the owners for the work you’ve done (your management fee) should be put into your own account.
How Do I Record Transactions For A Property Management Company In QuickBooks?
QuickBooks lacks this type of straightforward account management and is why it can be difficult to manage multiple properties using QuickBooks. However, QuickBooks does post instructions on their own website about how to record transactions for a property management company:

Create A Company File For A Rental Property Company
This is where you track transactions for each property being managed and record rent income and expenses.

Set up tenants and vendors: Set up properties as customers, tenants as customers or jobs of properties, and owners as vendors.
Set up accounts and items: Set up checking accounts as assets, security deposits as liabilities, rent income and common area maintenance expenses (CAM) as income, and property management expenses and property owner payments as expenses.
Record security deposits: Use a liability account for a security deposit.
Track rent income: Record rent income as invoices if you receive payments at a later date or as sales receipts if you receive payments right away.
Record expenses for each property: Record property expenses such as property maintenance, utilities, and repairs. Record them as bills if paid at a later date or checks if vendors are paid right away.
Pay property owners: Use profit and loss reports to calculate how much to transfer to property owner’s accounts. Write checks for the payment and mark it as a vendor payment.
Create A Company File For A Property Management Company
A rental property business will also want to track their own business transactions, such as the income and expenses incurred from managing the properties on behalf of the owners.

Set up property owners as customers
Set up accounts and items: Set up checking accounts, furniture, and equipment costs as assets, payroll liabilities as a liability, income as income, and insurance and utilities as expenses
Record income: Record management income from property owners as invoices if paid at a later date or as sales receipts if you receive payments right away.
Limitations of Using QuickBooks for Property Management
QuickBooks may offer some of the most widely used accounting solutions for small businesses, but this comes at the expense of not offering industry-specific capabilities when it comes to managing rentals.

As described in the previous section, while it’s possible to set up QuickBooks in a manner capable of handling rental property accounting, it’s not as straightforward as it could be with industry-specific software. A business will need to have an above-average understanding of the ins and outs of the software in order to set it up correctly, and this will also create a bigger learning curve for your employees.

When you create invoice payments for rent collection, tenants do not have a client portal they can log into to view their monthly rent statement and make a payment. This also means they do not have the ability to set up autopay. Furthermore, tenants won’t have the ability to do non-financial-related tasks, such as view their lease terms or submit a maintenance request (work order).

For the property managers, they’ll be without abilities such as sending mass emails to tenants (such as announcements), tenant screening, eSigning lease documents, or viewing tenant work orders. It may be hard to go away from an accounting program that you’ve used for years, but many find it much more reasonable to have all of those functionalities in one place.

QuickBooks may handle its best traits incredible well (such as tracking transactions and monitoring cash flow), but QuickBooks may fall short for a property manager who isn’t patient enough to deal with these limitations, for someone who desires more than just financial features, or for someone desiring a software built exclusively for them.

Quickbooks for Commercial Real Estate

Reasons Commercial Real Estate Owners Need QuickBooks

Payroll is only one of the many add-on choices available with QuickBooks. These add-ons are available in the QuickBooks marketplace to help you with a variety of business management tasks. Numerous daily transactions with tenants are documented because stand-alone property management systems are primarily designed to benefit property managers and tenants. However, they fall short of giving you a comprehensive commercial perspective.

These systems’ owner statements only include information on rental income, expenses, and owner withdrawals. Most real estate owners require additional accounting services, such as managing loans, payroll, and overhead expenses. As a result, owners often use a standalone property management system in addition to QuickBooks. Double-entry of data is necessary in these fragmented systems in order to view performance holistically.

Because of STRATAFOLIO’s seamless interface with QuickBooks, you won’t need to enter the same data twice to receive a comprehensive perspective of your business.

Ease of Invoicing/Posting Payments in QuickBooks 

How to make an invoice is one of the first features that QuickBooks users learn. The QuickBooks system’s main functionality—basic invoicing followed by payment receipts—allows for a great deal of flexibility and customization. However, tracking becomes difficult very quickly when you have dozens of renters (or more!) who have lease rate increases. And, a location that many owners overlook, costing them money. This is made simple by STRATAFOLIO’s capabilities, such as the built-in invoicing reminders and lease escalation tracking. With the help of our program’s Bulk Invoicing feature, you may bill all of your renters at once with their most recent CAM costs and lease rates. Even if the renters are in several QuickBooks files, STRATAFOLIO makes it easy to invoice and collect payments.

Your Team Can Access Their Data from Anywhere

In QuickBooks Desktop, the multi-user mode enables you to grant access to other team members and your accountant. It’s even simpler to access with QuickBooks Online. Since STRATAFOLIO is cloud-based, you won’t ever need to be concerned about losing access to crucial papers. Anywhere you have an internet connection, you have access to your data. Multiple user access levels are available in STRATAFOLIO to suit the needs of your entire company. The number of users who can be added is unrestricted.

Automatically Updated 

There is never a need to upgrade to a new version if you use QuickBooks Online with STRATAFOLIO because the program updates automatically. You won’t have to worry about losing crucial data or making software changes in the middle of the year that can mess up your taxes because you’ll always have the newest versions of QuickBooks and STRATAFOLIO.

QuickBooks – Built for Growth

Your firm can expand while maintaining the records you need for each asset you possess by using QuickBooks’ classes function or making a new company file. It’s as easy as adding another class or QuickBooks company file to add more assets to your portfolio in QuickBooks. It is as simple as adding another structure in STRATAFOLIO. You can have an unlimited amount of Assets and Tenants in any system, allowing you to develop and grow your company.

Available, Knowledgeable QuickBooks Experts

A standard in accounting is QuickBooks. The majority of seasoned accountants are familiar with the program. Additionally, a sizable network of proficient bookkeepers with QuickBooks knowledge exists. When you need assistance, our certified QuickBooks specialists at STRATAFOLIO are here to help. QuickBooks is a reliable corporation with easily accessible support resources, and it is user-friendly for all skill levels. STRATAFOLIO and QuickBooks Online both offer the highest level of protection. Your files are therefore always secure, negating the need for backups. Most people still use QuickBooks as their accounting software of choice. And, according to more than 18,000 customer evaluations on Capterra, has received a 4.5 out of 5 star rating.

Comprehensive View of All Your Properties

When using QuickBooks with STRATAFOLIO, all accounting and financial operations are handled by a single system. As a result, your commercial real estate business is more efficient and investors are more confident in you. Property managers typically use QuickBooks for overhead and payroll while keeping track of costs and income in a different system. However, using STRATAFOLIO, you can easily view your whole cash flow across all QuickBooks accounts.

With the help of STRATAFOLIO and QuickBooks, you can manage both your real estate transactions and business overhead expenditures using a single accounting tool. You have several options for running reports when reporting. Create reports using the account, class, or month. Alternatively, you could use customized report options or save a favorite. A better comprehensive perspective of their portfolios is needed by real estate investors. In contrast to standalone property management systems that are unable to handle loans, salaries, and overhead, STRATAFOLIO’s Owner Dashboard offers a graphic representation of the accounting data of a full business, by entity, or even per building. Running QuickBooks alongside STRATAFOLIO gives you access to an integrated asset management and full accounting solution.

How to Record Rental Income in Quickbooks Online

Select “New Customer/Job” from the “Customer Center” after it is open. To access the customer input screen, select “New Customer.” As the contact details for the consumer, enter the name and address of the property. Include other pertinent information about the property in the custom data fields, such as the terms of payment, preferred method of payment, and reserve reserved for repairs. To save your new customer and dismiss the window, click “OK.” If you need to set up other properties, click “Next.”

To set up the specific tenants for each property, choose “New Job” from the “New Customer/Job” option. Enter the tenant’s contact information, including name, phone number, and mailing address. Use the tenant’s contact information rather than the address of the rental property itself; QuickBooks will use this information to create your monthly rental bills. If you’re done adding new tenants, click “OK,” otherwise click “Next” to add more.

To start inputting your rent receipts, select “Receive Payments” from the “Customers” option. From the drop-down menu under “Accounts,” select the cash receipt account. The “Customer:Job” drop-down list should allow you to select the right tenant. Enter the monthly rent payment amount. If you are entering rent for just one tenant, click “OK” to keep the receipt. Select “Group with other undeposited money” to proceed to the next cash receipt entry if you have rent from multiple tenants.

Why is recording rental income in QuickBooks so complicated?

Although receiving and depositing rent should be very simple in QuickBooks, recording rental income shouldn’t be too difficult.

It can be challenging to set up a rental property in QuickBooks, which is possibly why the organization offers a Live Bookkeeping professional to assist with the setup for $50 for a single session in addition to tailored bookkeeping support for a surcharge.

To ensure that accounts are first set up properly, it might be worthwhile to pay a little bit more than the standard QuickBooks price. At this stage of the game, utilizing QuickBooks incorrectly could result in inaccurate financial reports, errors on a tax return, or falsely accusing a tenant of paying their rent late.

Because it wasn’t designed for the real estate sector, QuickBooks might be challenging to use for rental property.

The universal accounting program QuickBooks aspires to be all things to all users. ZDNet reported that in 2019, QuickBooks Online had 3.2 million U.S. members and 1.3 million subscribers abroad. Although the organization doesn’t specify the proportion of subscribers who own rental properties, many of them run small businesses and are independent contractors.

Some property owners are migrating to the free Stessa software, which was created by real estate investors, for real estate investors, because QuickBooks can be difficult to use for rental property firms.

How to Classify Rent Income on the General Ledger

Rental income is the cash a company receives from leasing property or another kind of asset within a given accounting period. A record of accounting known as the general ledger is arranged by account, such as cash or rental income. Depending on when your small business collects rent from your renter, you should classify rental income in the general ledger under a certain type of account. These examples should assist you understand received rent and which type of account it belongs in if you’re unclear.

Upfront Payment vs. Delayed Payment

According to Entrepreneur, a company must record income in the period in which it is earned regardless of when payment is received. The rent is not yet considered income when it is paid in full; you only need to declare the income once it has been earned. If a tenant is occupying your property at the end of an accounting period but you have not yet received rent, you must record the rent income nonetheless to allocate it to the appropriate period. Here are some examples of debit and credit.

Recording an Upfront Payment

Record a debit to the cash account for the amount received and a credit to the unearned rent account for the same amount to record an upfront rent payment in the general ledger. Cash is an asset, and the debit increases it. According to Accounting Tools, the credit raises unearned rent, which is a liability or something you owe. Assume, for illustration, that your tenant will pay your small business $2,000 in rent on February 1st. Add $2,000 to the unearned rent account and debit $2,000 from the cash account.

Income Earned From Upfront Payment

You must record the portion of the advance payment that you received as rental income in your general ledger at the end of each month. Create a debit for one month’s worth of rent in the unearned rent account and a credit for that same amount in the rent income account. Unearned rent is reduced by the debt. Rent revenue is increased by the credit. Debit $2,000 for unearned rent and credit $2,000 for rental income at the end of the month using the example from earlier.

Earning Rent Before Collecting Payment

Rent income earned but to be collected later should be recorded by debiting the percentage earned from the rent receivable account and crediting the rent income account with the equal amount. The debit grows the account for receivables, an asset that represents the money your tenant owes you. Assume, for illustration, that a tenant pays your small business $4,000 for the previous month’s rent on the fifth of every month. In your general ledger, debit $4,000 for rent receivable and credit $4,000 for rent income at the end of the month.

Collecting Rent Already Earned

Debit the cash account for the amount received in rent payments that have already been recorded as income, and credit the rent receivables account for the same amount. The tenant’s rent obligation is reduced by the credit to reflect this. To properly record the receipt of rent in the journal, debit $4,000 from cash and credit $4,000 from rent receivable on the fifth day of the month.

Conclusion

QuickBooks for Short Term Rentals makes it easy to manage short term rentals.

Whether you’re renting out your home for a few weeks or a few months, QuickBooks for Short Term Rentals helps you keep track of your income and expenses, so you can get back to enjoying the experience of hosting.

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