Growing your portfolio, and worried about how this will impact your accounting? This Lodgify webinar is for you.
On November 5, 2024, Lodgify joined forces with Corey Reid from Clearing and property management business owner Chris Luebbers to discuss accounting best practices for new and growing property managers. We explored the new complexities that come with handling other people’s assets, recommended strategies for smoothly managing this transition, and much more.
Interested? Don’t worry—the webinar may be over, but you can still take advantage of all these insights! We’re including the full webinar recording, as well as a written recap of the presentation and Q&A session, below.
Webinar recording
Webinar recap
The webinar began with an introduction to our speakers:
- Corey Reid is the Vice President of Growth at Clearing, a trust accounting and automated bookkeeping software tailored for short-term rental property managers.
- Chris Luebbers is the owner of the vacation rental business Lake Oasis Rentals and an entrepreneur with his hand in multiple industries. He’s currently breaking into the property management industry after seeing the demand and value in the market.
Next, Lodgify content marketing specialist Miquelle Radich introduced Lodgify and its offerings, after which Corey began his presentation on insights, best practices, and infrastructural considerations for new and growing property managers navigating accounting.
Insights, best practices, and infrastructural considerations
Corey started his presentation off by reviewing the key accounting challenges for property managers and introducing the four primary operating models for short-term rental businesses, pictured below:
Corey then dove deeper into the two most common of these operating models: trust accounting and co-hosting. While trust accounting is the process of managing and tracking finances using a trust account, property managers who serve as co-hosts can often get by with an operating account alone.
The rest of Corey’s presentation focused on tips related to:
- Bookkeeping and expense management
- Managing multi-property financial reporting
- Navigating tax considerations and compliance
- Risk management for short-term rental accounting
- Future-proofing your accounting practices
PM accounting in practice: Questions for Lake Oasis Rentals
Next, we had some questions for Chris to get the property management point of view on these issues.
Chris: In terms of accounting, the challenge really lies in making sure that everything is correct. We’re a boutique-style business, so we’re going in and purchasing items for our clients. For example, last week we purchased three fake trees for a living room. Now that’s on a company credit card, and we have to worry about how to identify whose fake trees these are, charge them, and make sure it’s done in a way that they have access to and can see. Because a month from now, they’re probably going to forget they asked us to make that purchase. Fortunately, our clients have their own portal, so they can go in and see these charges.
After all, this is their home, and they want complete transparency. They want to know exactly what’s going on, who’s in their home, and all the relevant details. And by using Clearing and Lodgify, we’re able to bring light to exactly what accounting is going on, where those funds are coming from, and where they’re going.
Chris: There’s a good instance that just happened this weekend: We had to move somebody from one property to another, and those funds had to go to that second property. It happened so late in the game that we had to do it manually, with the current booking still being locked on the first property in Airbnb.
The nice part is, with Clearing, they do a good job of identifying where these things are supposed to be, putting them in the portal, and making it really streamlined so we don’t need to do those things. But then we still have the option of going in and manually adjusting when problems arise.
What advice would you give to property managers who are making this transition?
Chris: My best advice is to focus on getting yourself in the position where the tech and details are not something that encumbers you, so you’re able to focus on the high-level problems and be ready to handle them the most accurately that you can. If we’re inundated with layers of accounting and software problems, we’re stressed out and we’re not fully prepared to handle those externalities when they occur—because we all know they will.
Want to see the rest of our questions for Chris? Check out the webinar recording!
Q&A session
Next, Corey answered questions from the audience.
In a trust model, do all payments from OTAs get commingled with all of your clients?
Corey: Definitely confirm with your own jurisdiction, but most of the time people come to us with just one operating account and one trust account. And for all their different owners, the money in that trust account is commingled, and then they use our tools to be able to know the different amounts for each owner.
We do have the ability to do sub-balances in our software, so if you did want to segment that down to a per-owner level, you certainly could. But certain questions start to get asked there, such as: If your different owners have their own trust accounts or their own segmented balances, and there’s interest generated, who gets that interest?
These types of things you should probably consider talking to an expert about. But in general, most people come to us with just one trust account and all that money is going to one place.
Does Clearing replace QuickBooks, or should it be used in addition to QuickBooks?
Corey: It depends on the model. Our goal is to be a complete standalone accounting software for the short-term rental space, so that would be both the corporate and trust side. That being said, there’s always going to be experts in the space that are so familiar with QuickBooks that they’ll never change. And we’re still building out the corporate side, and some people are doing things in QuickBooks that we just don’t have yet. So, there are integration points so we can share certain aspects of the financials across the platforms.
But with different models, like co-hosting, we have people who are using our software standalone. It’s the same with trust accounting when they don’t own any of their properties. So it really comes down to which model you decide to scale with, but also what specific reporting needs you have.
Want to see the rest of the questions from the Q&A session? Check out the webinar recording!
Learn more
To learn more about Clearing, you can visit their site or request a free demo.
You can also learn more about Lake Oasis Rentals by visiting their site or following them on Instagram or Facebook.
