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Hello everyone,
I am tracking my expenses and income via QuickBooks. I have done this for my husband’s handyman business, so I am familiar with bookkeeping via QuickBooks. My question is, for good reporting what should I list under the chart of accounts?
Income
Expenses
What other things would be included?
Do you really need to separate out Cleaning Fees under Income? It’s not as if you get a separate payment.
Isn’t “Maintenance” really Labor? You’ll have marginal amounts of Maintenance labor, and lots of Cleaning labor. Maintenance is the occasional doorknob replacement, plumbing, electric outlet repair, etc. Cleaning you’ll be doing a couple times a week or more – washing linens, making beds, dusting and moping, cleaning showers and mirrors, and resetting all the amenities.
To me Furniture is a Capital Expense, not an Ongoing Expense. Other capital expenses would be new linen set, throw rugs, curtains, etc. things you only buy quarterly at best.
Capital expenses are NOT items that only last for three months. That is an expense and can be written off the year that the expense is incurred. Additionally, anything under $2,000 is generally an operating expense as well.
Not if we hire a handyman for the repairs. Plus, why wouldn’t we want to know how much we spent in repairs for our listing?
Furniture would be separated because it would depreciate… right? I would include curtains and throw rugs in that mix, but I think linens would be separate. Linens would be a variable expense, and not a fixed.
This is just to see how much we spent on cleaning supplies and housekeeping services and how much we recouped from cleaning fees. This is helpful to see if we need to increase cleaning fees, decrease them, or roll them into the nightly rate.
Thank you for your feedback @KenH, I appreciate it!
Thank you @smtucker. Are you an accountant or just familiar with accounting principles? Would you break out linens, cleaning supplies separately, or just use operating expenses as the catch-all account?
I am not an accountant, however, I have run a number of businesses that use very micro-accounting and I was an auditor for about 12 years.
I know this is an old forum question but there is a new bookkeeping business just started up specifically for hosts of vacation rentals, airbnb’s, etc. It’s called “Vacation Rental Bookkeeping.” You can hire your own personal bookkeeper for about the same price per month as the average rental gets for one or two night of bookings.They get paid month-to-month and all you have to do is get them the info they need at the beginning (cc, bank accounts) and then follow up by sending them pictures of your receipts with your phone. They’ll even catch your books up for you! The reports they make are super handy too - they can track practically anything you want to have tracked and have a lot of knowledge in the vacation rental industry so they can lend an ear if you need advice. They even work directly with your CPA or tax preparer to make sure they are getting exactly what is needed and you will end up saving time, money and knowing exactly how much money you have all the time (minus security deposits and all that). Check them out. www.vacationrentalbookkeeping.com
I realize this is an old thread but to reply to the issue of it being necessary to separate rental income and cleaning fee income - yes absolutely keep those separate unless you want to pay sales taxes on the cleaning fees.
FYI I am an accountant and have multiple properties that I manage the accounting for.
Also for the “labor” issue make absolutely sure that prior to giving any if your contract labor vendors a dime to obtain a W9 form. No W9 no pay… period. I stress that to all of my clients - even the ones that say “well we only paid him/her 150 and the reporting threshold is 600” and yes that’s true however you have no idea in January for example when you pay that 150 if you will or won’t pay them up to and over the 600 dollars. I’ve seen it happen more times than I can remember where a client failed to get a W9 and at the end of the year when they are chasing that vendor down the vendor then refuses to give it to them. And that means that anyone they paid over 600 without a W9 gets put to owner draw and the owner ends up not being able to take the business deduction. If you refuse to pay without a W9 obtained you at least have some leverage at that point.
Here’s how I breakdown my items…
Income:
Direct Costs:
I choose to regard my furnishings as expenses and write them off at the time of purchase, rather than regard them as fixed assets on a depreciation schedule. I choose to do it this way because I’m not in the furniture business and I really just want to know the performance of my company from an accommodation standpoint. I know some accountants may disagree with this. If you plan to get a loan, or sell your business, you may be better off to hold your furnishings as assets rather than write them off.
I like to divide the income Accommodation Fare from the Cleaning fee so that I know the performance form an accommodation standpoint. And yes, it’s nice to know how much I’m collecting from Cleaning fees separately so that I have a maximum number when I want to determine a cleaning budget. And the same goes for resolution adjustments, I want to keep that separate so that I can better understand the actual performance of my business based on accommodation fare. I use BNBTALLY to help parse out each of these income line items so it’s easy to get this in my Quickbooks Online and report my P&L. Therefore, it’s not too much of a hassle for me.
If you own the building you can be guided by Quickbook’s taxable categories. I actively run my STR rooms, so I do my taxes for that on Schedule C, but there’s also all of the rental real estate deductions to go through, like depreciation and mortgage interest.
If you use the tax deductible categories in your Chart of Accounts Quickbooks will prepare a file that you can import into TurboTax.