Vacation Rental Accounting: Case Study 1

Client Profile:

A full-service short-term rental management company from Ontario, California. The company manages 25 vacation rental properties in Palm Springs & Indio.

Overview:
Despite being operationally successful, the client faced challenges in converting higher revenue into improved profitability due to accounting inefficiencies. VRSapients was tasked with the mission of ensuring accurate transaction recording in QuickBooks, ultimately aiming to send timely monthly owner statements to property owners..

Challenges:

Compliance with trust accounting best practices to satisfy property owners.

Difficulties in managing receipts for property supplies, resulting in undercharging homeowners.

Challenges in accounting for refunds to guests after sharing initial revenue with owners, impacting profits.

Solutions:

Restructured QuickBooks Online setup, separating property management financials from trust operation financials using the “Classes” feature in QuickBooks Online.

Advised the client to maintain separate bank and credit card accounts for property management and trust operations.

Implemented a shared Google Drive folder system to store receipts for each property, ensuring proper recording in QuickBooks under the respective property.

Established a process to accurately account for refunds to guests during owner statement preparation.

Results:

The client achieved timely owner statement delivery, strengthening relations with property owners.

Proper charging of owners for expenses incurred by the property management company on their behalf.

Detailed standard operating procedures (SOPs) were put in place to maintain transactional details for each property in the designated Google Drive folder.

 

Through the successful implementation of solutions, VRSapients enabled the client to enhance financial management, achieve accuracy in accounting, and maintain a positive rapport with property owners.