This is an accounting guide for those who own one or more Airbnb investment properties and who use QuickBooks accounting software. An Airbnb investment property is a business model where an operator purchases one or more properties and offers them on Airbnb for the purpose of building equity much faster than a traditional rental business. As such, the Airbnb investment property business model thrives in markets where Airbnb short-term income potential is far higher than local long-term rental prices. However, there are decisions to be made in your accounting process. Keeping a close eye on your numbers will make a great difference in navigating the success of your ongoing operations. In this guide, we’ll be focusing on accounting for all income received by Airbnb from an investor perspective, including how to automate Airbnb revenue accounting using QuickBooks.
NOTE: This guide only covers Airbnb revenue accounting, not costs. For a guide about Airbnb costs and chart of accounts to consider, check out this guide instead: Airbnb Costs and Chart of Accounts to Consider
Here’s what you’ll get from this guide:
There are other business models that may be more suitable in your particular scenario, which are covered better in the following guides:
Here we’ll describe our QuickBooks chart of accounts template for Airbnb income in great detail:
| No. | Account | Type |
|---|---|---|
| 24000 | Rental Liability | Liability |
| 24200 | Rental Liability: Airbnb Custom Taxes Payable | Liability |
| 42000 | Rental Revenue | Revenue |
| 42100 | Rental Revenue: Airbnb Income – Accommodation Fare | Revenue |
| 42200 | Rental Revenue: Airbnb Income – Cleaning Fee | Revenue |
| 42300 | Rental Revenue: Airbnb Income – Resolution Adjustment | Revenue |
| 42400 | Rental Revenue: Airbnb Refund – Accommodation Fare | Revenue |
| 42500 | Rental Revenue: Airbnb Refund – Cleaning Fee | Revenue |
| 42600 | Rental Revenue: Airbnb Refund – Resolution Adjustment | Revenue |
| 51000 | Rental Costs | Cost of Service |
| 51100 | Rental Costs: Airbnb Service Fee | Cost of Service |
| 61100 | Airbnb Tax Withholdings | Expense |
NOTE: In this guide, we only cover income accounting, not costs. For a guide about Airbnb costs and chart of accounts to consider, check out this guide instead: Airbnb Costs and Chart of Accounts to Consider
Click to expand and learn more about any particular account type.
Rental Liability
24000 – Rental Liability – This is a parent account with child accounts that account for rental liabilities.
24200 – Rental Liability: Airbnb Custom Taxes Payable – This represents all Custom Taxes collected from Airbnb and payable to a tax authority.
Rental Revenue
42000 – Rental Revenue – This is a parent account with child accounts that account for rental revenue.
42100 – Rental Revenue: Airbnb Income – Accommodation Fare – This account tracks the accommodation fare portion of each Airbnb reservation. The accommodation fare is equal to the number of nights multiplied by the average nightly rate of each reservation.
42200 – Rental Revenue: Airbnb Income – Cleaning Fee – This account tracks the cleaning fee portion of each Airbnb reservation.
42300 – Rental Revenue: Airbnb Income – Resolution Adjustment – This account tracks any resolution adjustments collected from Airbnb.
42400 – Rental Revenue:Airbnb Refund – Accommodation Fare – This account tracks accommodation fare refunds executed by Airbnb.
42500 – Rental Revenue: Airbnb Refund – Cleaning Fee – This account tracks cleaning fee refunds executed by Airbnb.
42600 – Rental Revenue: Airbnb Refund – Resolution Adjustment – This account tracks resolution adjustment refunds executed by Airbnb.
Rental Costs
51000 – Rental Costs – This is a parent account with child accounts that account for rental costs.
51100 – Rental Costs: Airbnb Service Fee – This account tracks service fee costs from Airbnb for each reservation, which is subtracted from the income.
61100 – Airbnb Tax Withholdings – This account tracks any taxes withheld by Airbnb for income tax obligations. This is very rare and usually due to the Airbnb account holder lacking tax identification information. Ideally, this account should not contain any balance and is seldom (if ever) used. To avoid income tax withholdings from Airbnb, be sure to update your Airbnb account with your tax identification information and verify your account.
For the scope of this guide, we’re mainly focused on Airbnb revenue recognition. It is important to point out that our template does not include many general accounts. We also make reference to some accounts not included in this particular template, which we’ll list here:
Here’s how to import the above chart of accounts template. The chart of accounts discussed in this article can be imported into QuickBooks automatically using Tallybreeze setup tools. Here’s how to access this utility…
Airbnb has the potential to turn into a major source of revenue for many property investors. With Tallybreeze (formerly Bnbtally), it’s never been easier or more convenient to automate the reconciliation of your Airbnb reservations in QuickBooks. In the following section, we’ll go over how to automate the revenue of Airbnb investment properties, including chart of account setup and preset configuration.
The Tallybreeze (formerly Bnbtally) team has created an easy-to use interface to help you manage your Airbnb listings. Once connected with QuickBooks, the system will guide users through setting up accounting rules for each listing so they can be optimized quickly and efficiently.
Explanation of Preset Lines
In this business model, everything collected from Airbnb is yours. This includes the accommodation fare, cleaning fee, Airbnb service fee (subtracted), any resolution adjustments, custom taxes (optional) and any tax withholdings (if they exist)
| Airbnb Price Item | % | Account |
|---|---|---|
| Accommodation Fare | 100% | 42100 – Rental Revenue: Airbnb Income – Accommodation Fare |
| Cleaning Fee | 100% | 42200 – Rental Revenue: Airbnb Income – Cleaning Fee |
| Airbnb Service Fee | 100% | 51100 – Rental Costs: Airbnb Service Fee |
| Resolution Adjustment | 100% | 42300 – Rental Revenue: Airbnb Income – Resolution Adjustment |
| Custom Taxes | 100% | 24200 – Rental Liability: Airbnb Custom Taxes Payable |
| Tax Withholdings | 100% | 61100 – Airbnb Tax Withholdings |
Let’s say you have Tallybreeze (formerly Bnbtally) set up for this listing using the preset settings above. Let’s say Airbnb sends a payout for a current reservation with the following itinerary price items:
Tallybreeze (formerly Bnbtally) accounts for all the income received by Airbnb, separating out each price item. The total amount to be received from Airbnb for this reservation is $2440, which is allocated to the Airbnb Payment Clearing Account to be later reconciled against the resulting bank deposit.
| Account | Debit | Credit |
|---|---|---|
| 42100 – Rental Revenue: Airbnb Income – Accommodation Fare | $2000 | |
| 42200 – Rental Revenue: Airbnb Income – Cleaning Fee | $300 | |
| 51100 – Rental Costs: Airbnb Service Fee | $60 | |
| 24200 – Rental Liability: Airbnb Custom Taxes Payable | $200 | |
| 11000 – Airbnb Payment Clearing Account (Asset) | $2440 |
On the date the reservation payout is received from Airbnb into your Operations Bank Account (3-5 days later), a bank rule in QuickBooks can automatically reconcile the amount back to the Airbnb Payment Clearing Account:
| Account | Debit | Credit |
|---|---|---|
| 1XXXX – Operations Bank Account | $2440 | |
| 11000 – Airbnb Payment Clearing Account (Asset) | $2440 |
Finally, consider setting up a general customer (e.g. “Airbnb Guests”) in your Tallybreeze (formerly Bnbtally) listing rules. Or if you prefer, you can also set the guest as the customer if you want to save your guest information in QuickBooks. It’s also a good idea to set the class category of each line item as “Investment: <Listing Address>” meaning you should create two class categories in QuickBooks for this listing, one class category is “Investment” (set as the parent class) and the other class is the sub-class that represents the specific listing address. See example below:
With Tallybreeze (formerly Bnbtally), you’re also able to automate the creation of additional bills and invoices for each reservation. Consider the following:
All of the above settings can be quickly set up using Tallybreeze’s presets for your listings. Here’s how to set up these presets…
From here, presets will be loaded as your listing accounting rules and you can edit as needed.
In this section, we explore the nuances of Airbnb investment property transactions. The most common workflows for investors are outlined below:
A common transaction workflow to identify is paying your mortgage, which includes a principal amount plus interest.
You, the Airbnb investor, are making a mortgage payment in the amount of $2000, whereas $500 of which is considered interest. This is for the property located at 212 Chantilly Way through a recurring bank transaction which happens monthly. Once the transfer is posted and complete, reconcile the outgoing transaction from the Operations Bank Account using the following entry:
| Debit | Credit | Class Category | |
|---|---|---|---|
| 1XXXX – Operations Bank Account (Asset) | $2,000 | Investment: 212 Chantilly Way | |
| 2XXXX – Mortgage Principal | $1,500 | Investment: 212 Chantilly Way | |
| 7XXXX – Mortgage Interest | $500 | Investment: 212 Chantilly Way |
Detailed instructions for QuickBooks Online
1. Create a Recurring Bill
| Vendor | Category | Description | Amount | Class |
|---|---|---|---|---|
| Mortgage Company | 2XXXX – Mortgage Principal | “Mortgage Principal Payment” | $1,500 | Investment: 212 Chantilly Way |
| Mortgage Company | 7XXXX – Mortgage Interest | “Mortgage Interest Payment” | $500 | Investment: 212 Chantilly Way |
2. Pay the Bill
Pay the Bill directly in QuickBooks or reconcile the Bill against the payment made in your bank feed.
In most regions, Airbnb collects transient occupancy taxes and remits them to local tax authorities on your behalf. If this is your case, this section doesn’t apply to you. However, many Airbnb investors opt to receive taxes from Airbnb and pay their tax authority directly, which gives them more control over their funds. In this case, if you’re using Tallybreeze (formerly Bnbtally), the Custom Taxes line item found in your presets will take care of collecting these taxes. This means all you would need to do is pay your tax authority what’s owed to them from what has been collected. We’ll go over this here:
The listing, 462 Atlas Way, is set up on Airbnb to receive custom taxes for all reservations. In Tallybreeze (formerly Bnbtally), these amounts are allocated to “24200 – Rental Liability: Airbnb Custom Taxes Payable”. After running a balance sheet report on this listing in QuickBooks, you see that $200 is owed for transient occupancy taxes.
First, you’ll need to send your payment to the tax authority either via bank transfer, ACH, check or other means. Once the transaction is posted and complete, record the outgoing transaction from the Operations Bank Account using the following entry:
| Debit | Credit | Class Category | |
|---|---|---|---|
| 1XXXX – Operations Bank Account (Asset) | $200 | Investment: 462 Atlas Way | |
| 24200 – Rental Liability: Airbnb Custom Taxes Payable | $200 | Investment: 462 Atlas Way |
Detailed instructions for QuickBooks Online
1. Check how much exists in the Custom Taxes Payable account for the property
The amount that needs to be paid to the tax authority can be found in the balance sheet. Filtering the balance sheet by the class for each listing, look up the total amount under “24200 – Rental Liability: Airbnb Custom Taxes Payable”.
2. Create Bill
| Vendor | Category | Description | Class |
|---|---|---|---|
| Tax Authority | 24200 – Rental Liability: Airbnb Custom Taxes Payable | “Taxes Paid: 11% City TOT” | Investment: 462 Atlas Way |
3. Transfer the amount from your operations bank account to the tax authority
Send the money via bank transfer, ACH, check or other means.
4. Reconcile operations bank account statement line amount with bill
Reconcile the bill with the bank feed in QuickBooks
Now that your reservation data is automatically processed from Airbnb and perfectly synced into QuickBooks, you’ll be able to produce beautiful monthly reports of your Airbnb investments. After you’ve reconciled any expenses, you can then observe the performance of each listing in detail.
This report is meant for internal purposes to view side-by-side, displaying the profitability of each listing for your Airbnb investment operations. This report is found under QuickBooks “Reports” as “Profit and Loss by Class”:
In the right climate and in the right location, Airbnb can be an amazing way to build equity quickly in your investment properties. The accounting method discussed in this article provides a great deal of transparency into the success of your Airbnb investment operations. We hope that you’ve received great value from this guide as you build up your real estate portfolio, but there are still decisions to be made. For example, how are you going to keep track of your financials? What will your accounting process be? If an Airbnb investment property is a serious consideration for you right now, then numbers are king and you’re going to need an accounting solution so that even if something goes wrong with one property, the other ones stay afloat and profitable. To begin automating Airbnb investment accounting today, check out our software here!
Finally, there are other business models that are not covered in this guide but are covered better in the following guides. Be sure to check these out:
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