
Streamline Your Process with an Accounting Checklist for Vacation Rentals
The end of the year is an important time for vacation rental owners to review financials, close out books, review financial data for profitability or loss insights, and prepare for a successful tax season. Staying organized with year-end accounting ensures you have accurate records while gaining insights to optimize your rental's profitability and business growth in the new year.
Here’s your checklist to wrap up last year’s books and pave the way for a profitable new year. From finalizing your accounts to crafting goals and a solid plan to achieve them, set the stage for success in the year ahead!
Reconcile Your Bank and Credit Card Accounts
The first step to closing your books for the year is reconciling all financial accounts used for your vacation rental.
Match Transactions
Review your bank and credit card statements for any discrepancies or unrecorded transactions.
Identify Errors
Look for double entries, missed payments, or unauthorized charges that need to be resolved before closing the books.
Uncashed Checks
Follow up on any uncashed checks or pending refunds to ensure they're accounted for properly.
Reconciling your accounts ensures that your financial records accurately reflect your true income and expenses.
Review Income and Revenue Sources
Vacation rental income isn’t always straightforward. It can include rental fees, cleaning service income, security deposit forfeitures, and more. Here’s what to review:
Compare Bookings to Deposits
Double-check that all bookings processed through platforms like Airbnb, Vrbo, and your direct website match your bank deposits.
Separate Taxable Income
If local or state taxes were collected, ensure they’ve been labeled correctly for tax reporting purposes.
Account for Offers, Discounts, and Refunds
Review all promotional campaigns, discounts, and refunds offered throughout the year to ensure they have been accurately recorded and accounted for in your records.
Thoroughly verifying income prevents underreporting, which can trigger red flags for tax audits.
Categorize and Review Expenses
Every expense associated with your vacation rental needs to be properly categorized for bookkeeping and tax deductions. Make sure you include the following categories to get the full financial picture of your property business.
Operating Costs
Include utilities, cleaning fees, management software subscriptions, and service fees paid to rental platforms.
Repairs and Maintenance
Account for costs to address wear and tear or unanticipated repairs (e.g., replacing appliances or plumbing fixes).
Marketing Expenses
Track all your investments in promotions, professional photography, or social media ads.
Professional Services
Did you hire an accountant, legal advisor, or handyman? Ensure those invoices are recorded.
Mileage and Travel
If you traveled to your rental property for inspections, meetings, or repairs—or attended any industry conferences, log reimbursable mileage accurately. Add thorough details to your expense sheet, including clear notes to proactively address potential issues and ensure proper documentation is in place.
Organized expense data makes it easier to identify deductible costs during tax filing, ultimately saving you money.
Prepare for Tax Season
Tax season can be overwhelming without proper preparation. Here’s how to stay ahead of the game after closing your books for 2024.
Collect Forms from Platforms
Gather 1099-K forms from Airbnb, Vrbo, or other platforms where you're paid.
Review Investment Costs
Include big-ticket purchases such as furniture, HVAC systems, or kitchen appliances.
Depreciation Schedules
Work with your accountant to ensure these are accounted for properly in your tax filings.
Hire a Tax Professional
Work with an accountant familiar with vacation rental properties if you're unsure about classifications or deductions.
Having your records ready well before tax deadlines ensures you avoid penalties and file confidently.
Set Goals for 2025
Year-end accounting is about more than just closing the books—it’s an opportunity to set the stage for next year’s business success.
Identify Financial Trends
Review your income and expenses to identify trends—high and low booking seasons, unexpected costs, etc.
Budget for Improvements
Plan for upgrades that could increase the value of your rental, attract more guests or streamline operations.
Refresh Marketing Strategies
Review the ROI on your marketing expenses and decide if you need a new approach to maximize booking capacity.
By analyzing your numbers now, you’ll enter the new year with a clear idea of how to enhance your vacation rental business.
Are You Struggling to Wrap up Your Books? Let’s Talk.
Get In Touch to Schedule a One-on-one Consultation Today!
Download Your Free Year-End Accounting Checklist
Feeling a little overwhelmed? Don’t worry—here’s a convenient Year-End Accounting Checklist tailored to vacation rentals. Download it below to ensure no steps are missed in wrapping up 2024 and preparing for 2025.