Vrbo Property Management Accounting using QuickBooks

Why should you read this guide?

This is a guide about Vrbo property management accounting and automation for those who use QuickBooks accounting software. Vrbo property management is an increasingly lucrative industry. Additionally, for short-term rentals, many jurisdictions do not require licensing or strict trust accounting rules for managing short-term stays on behalf of owners. In this guide, we present an alternative accounting method for those in Vrbo property management who do not use a trust account. In this case, rather than using a trust account, all funds are directly collected from Vrbo and declared as income by the property management company. From there, a portion is paid out to owners as a direct cost.

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Although this method of accounting may not be considered the most conventional, it is widely used for two main reasons. First, it’s vastly simpler than trust accounting as it only requires a third of the data entry and training necessary to maintain. Second, the property manager can claim a higher income, which is useful for requesting a business loan. Therefore, if there’s no trust accounting requirements in your jurisdiction, you may want to consider this straight-forward accounting method.

DISCLAIMER: If you are operating in a jurisdiction that has legal requirements for Vrbo property managers to use a trust account, the accounting method discussed in this guide is not for you. There are plenty of jurisdictions that consider property managers as custodians with a fiduciary responsibility to the property owner, which requires a more comprehensive trust accounting method.

NOTE: In this guide, we only cover income accounting, not costs. For a guide about Vrbo costs and chart of accounts to consider, check out this guide instead: Vrbo Costs and Chart of Accounts to Consider

Table of Contents

What you’ll get from this guide:

1. A QuickBooks template for this method of Vrbo Property Management
2. Learn how to automate Vrbo property management accounting with Bnbtally
3. Execute common transaction workflows in QuickBooks
4. Generate monthly owner statements and reports for your clients

Cash Flow Diagram

Who should not read this guide?

There are other business models that may be more suitable in your particular scenario, which are covered better in the following guides:

• Trust Accounting for Vrbo Property Managers in QuickBooks
• Vrbo Co-Host Accounting in QuickBooks
• Vrbo Arbitrage Accounting in QuickBooks
• Vrbo Investment Property Accounting in QuickBooks
• All Vrbo templates for QuickBooks
• Vacation Rental Accounting & Bookkeeping: A Comprehensive Guide

Vrbo Property Management: QuickBooks Chart of Accounts

We will now describe our chart of accounts template in great detail. With this chart of accounts template, you can create a highly organized system to keep track and manage all Vrbo revenue.

Account Codes

No.	Account	Type
24000	Rental Liability	Liability
24110	Rental Liability: Vrbo Owner Funds Payable	Liability
24210	Rental Liability: Vrbo Taxes Payable	Liability
42000	Rental Revenue	Revenue
42310	Rental Revenue: Vrbo Income – Accommodation Fare	Revenue
42320	Rental Revenue: Vrbo Income – Cleaning Fee	Revenue
42330	Rental Revenue: Vrbo Income – Other Fees Collected	Revenue
42610	Rental Revenue: Vrbo Refunds	Revenue
51000	Rental Costs	Cost of Service
51110	Rental Costs: Vrbo Base Commission Fee	Cost of Service
51120	Rental Costs: Vrbo Payment Processor Fee	Cost of Service
51210	Rental Costs: Vrbo Amounts Due to Owner	Cost of Service

NOTE: In this guide, we only cover income accounting, not costs. For a guide about Vrbo costs and chart of accounts to consider, check out this guide instead: Vrbo Costs and Chart of Accounts to Consider

Detailed Explanation of Accounts

Each account charted is precisely defined below. This accounting method is for Vrbo Property Management businesses that do not use a trust account to manage funds. Rather, the property manager’s operations account is used to collect Vrbo funds and pay out to owners. As such, you’ll notice that amounts paid to owners are considered a cost to the business. This is also balanced by an Owner Funds Payable account. Read below to learn more about any particular account.

Accounts not included in this template

For the scope of this guide, we’re mainly focused on Vrbo 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:

• 11100 – Vrbo Payment Clearing Account – This account is used to apply payments to Vrbo invoices upon the day the Vrbo reservation payout is posted. Payouts can take 2-6 days (or longer) to arrive in the bank account after posted from Vrbo. Monies owed are held in this clearing account until the payouts are received in the bank. This account also helps to automate the reconciliation process.
• 1XXXX – Operations Bank Account – This is your business operations bank account set up with your financial institution. It’s a cash asset account to facilitate your Vrbo property management company’s day-to-day business operations.
• 4XXXX – Billable Expenses Income – This is a general account for capturing income received for the payment of billable expenses by owners, which may include a markup.
• 7XXXX – Billable Expenses – This is a general account for tracking billable expenses for any owners.

How to Automate Vrbo Property Management Accounting

Vrbo accounting can be automated using Bnbtally (by Tallylytics), which allows the Vrbo Property Management company to reconcile all reservations in great detail and allocate payments to owners on-the fly. A reservation made through Vrbo is automatically retrieved and processed given the accounting rules set in the Bnbtally (by Tallylytics) software. We’ll discuss this feature further along with how it works using the chart of accounts discussed above.

Bnbtally Listing Presets

Once you connect your Vrbo and QuickBooks account, Bnbtally (by Tallylytics) will guide you through setting up the accounting rules for each listing. When selecting “edit” on a particular property page, Bnbtally (by Tallylytics) will provide preset options with easy access to pre-made templates that are tailored specifically towards several types of businesses in the industry. After selecting your particular business model for Vrbo Property Management, the presets below can be broken down into two main groups: Lines 1-6 and Lines 7-12.

Explanation of Preset Lines

To learn more about each preset group, click on the corresponding dropdown.

Set Invoice Customer & Class Categories

In your Bnbtally (by Tallylytics) listings, we recommend to set the owner as the customer for each invoice. We also recommend creating two classes in QuickBooks: one parent class for the owner and another sub-class for the listing. See below example:

Automate Additional Bills & Invoices (Optional)

With Bnbtally (by Tallylytics), you’re also able to automate the creation of additional bills and invoices for each reservation. Consider the following:

• Create a bill to set payouts payable to the property owner for each reservation.
• Create a bill to set amounts payable to a tax authority for each reservation.
• Create a bill to set amounts payable to a cleaning service for turnover of each reservation.
• Create additional invoice to set amounts receivable by any third party for each reservation.

Vrbo Property Management: Common Transaction Workflows in QuickBooks

In Vrbo Property Management, there’s several other kinds of transactions in QuickBooks which you’ll need to build into your accounting process with owners and various other parties. We’ll list the common workflows in this section.

Paying Owners

To identify how much is owed to an owner, one can look at the balance sheet and filter for each class category under the owner. The amount that needs to be paid pertains specifically under “24110 – Rental Liability: Vrbo Owner Funds Payable”.

Paying Expenses on Behalf of Owners

There may be situations in which you’ll need to purchase items for the owner’s properties, but the funds come from your operations bank account. This happens when there’s something that needs an immediate fix when a guest checks in – perhaps a smaller maintenance issue. If your contract with the owner allows, you can make the purchase for these items directly from your operations bank account and subtract the paid amount from what’s owed to the owner under “51210 – Rental Costs: Vrbo Amounts Due to Owner”. See example below:

Remitting Custom Taxes

The Taxes Collected line item in Bnbtally (by Tallylytics) will catch any taxes collected by Vrbo – our presets are designed for this purpose. You can then pay the local tax authority on your own terms following the below example:

Monthly Owner Statements & Reports for Vrbo Property Management

Now that we’ve got our data automatically pulled from Vrbo and precisely synced into QuickBooks, the next time you need statements or reports for your business, it’s easy to produce beautiful copies for both owner and internal stakeholders each month.

Monthly Owner Statement by Listing

The detailed transaction report below provides a snapshot of what the owner has earned for each listing for the month. This statement can be sent to owners every month, with details grouped by listing, so that they know how their earnings compare for each listing. The example below is an owner statement for Kim Randall, who has two listings:

Profit & Loss by Customer

This report is specifically for the Vrbo property manager. This gives a perspective of how much you – as a company – profit or lose on a per listing basis. It gives a clear idea on which kinds of owners you should seek in the future, and which owners you should consider dropping or renegotiating with as an Vrbo property management company. This report is found under QuickBooks “Reports” as “Profit and Loss by Customer”:

Conclusion

Processing the correct numbers to pay each owner requires the highest of integrity and a streamlined accounting process. Many jurisdictions do not require trust accounting, which is why many Vrbo property management companies choose to use the method of accounting discussed in this guide. This accounting method is far simpler to implement than trust accounting, plus all Vrbo revenues are claimed as income to the property management company, which makes it easier to obtain a business loan.

Regardless, this accounting method provides a great deal of transparency to owners. But more importantly, it provides you – the Vrbo property management company – a great deal of transparency into the success of your business. We hope that you’ve received great value from this guide as you build your firm. To begin automating your Vrbo accounting, check the link below:

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:

• Trust Accounting for Vrbo Property Managers in QuickBooks
• Vrbo Co-Host Accounting in QuickBooks
• Vrbo Arbitrage Accounting in QuickBooks
• Vrbo Investment Property Accounting in QuickBooks
• All Vrbo templates for QuickBooks
• Vacation Rental Accounting & Bookkeeping: A Comprehensive Guide