Working with a bookkeeper gives Airbnb hosts timely, accurate reports for informed decisions
We are delighted to introduce Linda Tarshahani, co-owner of Educated Bookkeeping, a talented bookkeeper with a proven track record of empowering small business owners to take control of their finances. Together with her partner Kelsey Gleason, Linda provides invaluable support in financial management to entrepreneurs across a variety of sectors.
In this interview, Linda will share her expertise and advice on managing finances for Airbnb and short-term rental investments. Join us as we explore Linda and Kelsey’s professional journeys and uncover their top tips for successful financial management in the world of short-term rentals. Let's begin!
Linda, please tell us about yourself and your work in virtual bookkeeping. How did you decide to focus on helping small business owners?
My business partner Kelsey and I met as public school teachers back in 2010. We taught all levels of high school math and found commonalities in our work ethic and approach to our classrooms. We both reached a point in our careers where our growth opportunities were tapped out so we began looking at alternative careers that would build on what we loved best about teaching but offered us a new challenge. We both actually hold business degrees, not education or math degrees and thought that working in accounting would make a lot of sense given our background and analytical mindset. We decided bookkeeping was a better fit for us than tax preparation because it focused on the day to day accounting work and allowed us the opportunity to build relationships with our clients.
We found we really enjoyed having the opportunity to help small business owners reach their goals through a better understanding of their financials which definitely mirrored the opportunities we had in the classroom, helping our former students reach their educational goals.
How can Airbnb hosts benefit from working with your virtual bookkeeping services? What does your typical process involve, and how can hosts get started with your support?
The biggest benefit for any business owner including Airbnb hosts working with a bookkeeper is the opportunity to have timely and accurate reports to make informed business decisions. Is the host in a position to purchase additional property? Are the expected margins for a rental being achieved. Are the fees a host is incurring to advertise a listing providing a viable return on investment? Without complete and accurate financials, an Airbnb host can only guess at these answers. A great bookkeeper will be available to sit down with a host, analyze the financial reports, explain the story that they tell and answer those questions and more.
We begin with all potential clients by completing a complementary diagnostic review of their accounting file. We use that information to create a proposal for services moving forward. If accepted, we move the new client to our onboarding process. After onboarding a new client and gaining access to all the necessary platforms we will move a client into our weekly rotation.
We work in every client’s books weekly regardless of the size of the business. This allows us to stay on top of our work and provide timely information. We close all of our client’s books by the 8th of the following month, send them questions through our secure portal and send the updated financial reports by the 15th of the following month. For clients that would like to meet to review the reports, we typically schedule those meetings during the second half of the month. If a host is interested in getting started with our firm or learning more about our services they can visit our website and complete the Contact Us form or reach out via email.
What accounting tools or software do you recommend for hosts to manage their finances more efficiently?
As a firm we work exclusively with Quickbooks Online. With its market saturation it tends to integrate with more platforms and is typically easier for us to collaborate with CPAs. Other popular accounting softwares are Xero and Wave, although Wave has limited reporting options and integrations.
“Vacation rental CRMs are an ever growing and changing field but currently Hostaway and Guesty sit at the top of the list. Both can integrate with Quickbooks Online but require Zapier in order to make the connection. If a host is looking for help with integrations, we can absolutely help with that set-up.”
What advice do you have for hosts who are just starting out with their first short-term rental investment in terms of financial management?
Our biggest piece of advice is to make sure you are keeping the income and expenses tied to your rental separate from your personal accounts. You need to have dedicated bank and credit card accounts associated with your rental regardless of the business entity type you choose. Mixing business and personal makes a mess of your accounting and makes it incredibly difficult to accurately determine whether your business is profitable or not and how to improve the business’s financial situation.
Our second piece of advice is to not make financial management the last item on your to do list. When beginning any new business venture, we all tend to focus on the revenue generating tasks first. However, at the end of the year as tax season comes along, it isn’t uncommon for new business owners to experience the panic associated with compiling a year's worth of data for their CPA. While firms like ours can help with catching up the accounting so taxes can be filed, if a host is wanting to manage the accounting themselves, they should plan on setting aside an hour or two each week to keep their records up to date.
How can Airbnb hosts stay on top of tax obligations and deductions related to their rental properties? What tips do you have for year-round tax planning?
Updated, timely and accurate financials will help Airbnb hosts stay on top tax obligations especially if sales tax is filed monthly or your managing properties in multiple states. Keeping separate bank and credit card accounts for your rental business will help you make sure that every deduction is accounted for come tax filing time.
Tax planning should be coordinated with your CPA who will be able to consider not just your business’s financial position but also your personal financial position and how the two will affect each other. You should be meeting with your CPA quarterly to stay on top of tax planning strategies that can reduce your tax liability at the end of the year. However, those meetings can only be effective if updated and accurate information is provided to your CPA so staying on top of the day to day accounting is a must if a host is going to maximize their tax planning strategies.
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