Quickbooks setup for STR

[Vincent M.]

Looking for Quickbooks experts!

I use QB desktop for my accounting for other businesses and want to set up my STR for tracking Financials. I use Ownerrez. I know O/R does not directly integrate with QBD. Not interested QBO - tried it before; not a fan. Tried Stessa and don't really feel it's granular enough for how I like to do my bookkeeping.

Can anyone share their process/workflow? 

For ABNB - Do you record gross or net rent and track/record taxes paid by ABNB? Similarly for VRBO/Direct bookings, what's your process from gross rent to taxes owed? 

is this in QB, or elsewhere?

Pretty comfortable doing any actual QBD setup, just trying to figure out what level I need to go to.

thanks everyone

*Cross-posted on FB*

[Ricky A.]

Coming from QBD/QBE as well, I totally agree with your thoughts on QBO...it ain't the same thing!  However, you may consider it for a couple of reasons.  First, any direct integrations are likely going to come to QBO first (and may never come to QBD).  Also, if you scale and want to outsource your bookkeeping, a cloud-based solution will work a lot better than a local, on-prem solution.  Of course, you can use QBD now and migrate your data over to QBO later when the time comes.  Configuration is basically the same, and usually everything will migrate seamlessly. However, be aware that you'll need the QBO Plus plan to get Classes...yes...I know...that's CRAZY but true!!!  

As for your real question, we track gross rents via a gross-to-net invoice.  For example, we create an invoice (or sales receipt) that contains two lines.  The first line is an item for gross rent that, of course, maps to a rental income account in the GL.  The second line, is a property management (or commission) item that maps to an expense account and the amount is entered as a negative on the invoice.  Therefore, the invoice is for the correct net rent amount while the correct gross rent and and expenses are also recorded.  The accounting packages are smart enough to bring the negative amount on the invoice over as a positive expense in the GL...all that debits and credits stuff from accounting class :)

I like doing it this way for a couple reasons.  First, it makes it easy to report *accurate* income and expenses on forms like 8825 and Schedule E.  Second, it gives me the ability to easily see true income versus expenses in order to make informed management decisions.

For our STRs, we used property management companies that collect and remit sales/occupancy taxes, so we don't enter any of that info into our accounting package.  We also don't track rental source (Airbnb vs VRBO vs PM's direct site) because we're not making management decisions based on that (our management decisions would be at the property manager level).  For our needs, we create a single monthly invoice for each property management company that contains all their bookings for that month, and that invoice has a revenue line and a property management fee line for each of the bookings.

If we were self-managed, I'd want to be able to make management decisions based on performance at the booking platform level.  For example, is Airbnb's yearly fee worth it for property #1?  To get this level of information, I would likely do individual gross-to-net invoices for each booking using the booking platform (Airbnb, VRBO, Direct #1, Direct #2), as the "customer."  I could then pull platform-level data by running customer-based reports.  If that didn't work for some reason (like, if I wanted to use customer for something else), I would use items that mirror the booking platforms (e.g., ABB rent vs VRBO rent), so I could pull platform-level data via item-based reports.

Regarding sales/occupancy taxes, if the booking platform collects and remits them, I personally wouldn't enter any of that info because 1) it's a pass-through that doesn't affect my books, 2) it doesn't actually touch my accounts, and 3) it creates extra work that is unnecessary but creates a source of errors and discrepancies within my accounting package.  

For platforms that require me to remit these taxes, I'm not 100% sure which route I would take.  My first thought would be to set QB up to correctly calculate these taxes.  This would give you the ability to double-check the platform's calculations plus, you'd have the QB sales tax functionality to help manage and reconcile the remittance payments. Ultimately, you and not the platform, are responsible for accurate collection and remittance, so using QB's functionality to help would probably be my preferred way of handling.  

However, if the platform calculates it and collects it, an alternate way would be to record the collected amount on the gross-to-net invoice using an item that maps to a liability account to hold those amounts until you pay them.  You would then pull a report from the booking platform with the tax liability and use those number to pay the amount(s) to the municipalities each reporting period.

HTH