hello youtube this is richard founder short-term rental secrets.com and
Airbnb super host this video is a first in all the rest of the videos that we've
talked about we're talking about increasing revenue more bookings more
guests more per night increasing revenue but there's a whole other side to
running a business and that's managing your expenses this video is a beginner's
guide to managing your bookkeeping so proper bookkeeping is really important
in order to have a pulse on your business we all focus on the revenue
side getting more people in but do we know what it costs us to satisfy those
people and even to delight them all those gift baskets and all the things
that we do for free our costs and if we're not tracking them we can't analyze
our profitability ok so tip number one is open up a special checking account to
write all of your checks and receive all of your deposits from Airbnb and home
away into that specific checking account and then get a separate credit card
where all of your expenses are going to be charged to so between dedicated
checking account and dedicated credit card all of your hosting activities are
really quick and easy to spot rolling right into number two now that you have
everything that's online your checking account in your credit card you can
connect with an online bookkeeping system you can use QuickBooks I happen
to use Xero which is spelled xer0 and they go behind the scenes in the backend
connect with your financial institution and download everything into their
online accounting software the third thing now that you've picked
your software solutions categorize your expenses through their onboarding
systems you should be able to create custom categories if they're not already
there to include things like utilities and then within utilities you can have
cable internet whatever else you know gas or electric you also want to go
ahead and create things like for labor whether you have a landscaper or a
cleaning team just start to build the software out to match your business at
this stage I really recommend meeting with your CPA like you have an idea of
what your business is generating from a revenue perspective you have an idea of
what your expenses are and what categories I think you're going to be
really surprised how much you can write off legally against your business think
about things like travel entertainment meals computer stuff there's a lot of
things and you want to sit down with your CPA and understand exactly what you
can legally deduct what's in that gray area what you're comfortable with but I
think you're going to find that this is actually a really good opportunity
for you so the last step is to analyze this all now that you have the data to
get familiar with it you know spend some time in Xero or QuickBooks or whatever
software you're using and understand what it is that it's doing look at the
reports and see what your expenses are and make an assessment is it too little
is it too much you may find you're not spending enough and gifts or you may
find that you're spending way too much and gifts the last time I did it as a
personal example I realized that I was spending a small fortune on cable TV and
Internet now in a recent video I talked about increasing the speed of internet
and I totally believe that but the costs were exorbitant so what that did was
that prompted a couple of phone calls I called Time Warner Cable in New York
City and I called CenturyLink in Colorado and in both cases I told them
I'm spending way too much money this is a rental property I don't need all these
channels but I do need faster internet and wouldn't you know it they both
connected me to like special divisions and restructure the entire thing my cost
went down my internet speed went up and that was more profit and I couldn't be
happier but I wouldn't be able to do that if I didn't know exactly what my
costs were and my expenses and have a budget with a goal of profitability so I
hope you found this video helpful I know we haven't spent nearly enough time on
the expense side and I'm going to start to do more of these videos because I
think it's critical right like focusing on the revenue side comes naturally to
us all we need to do a little bit more on like expense management so I'm going
to film some more videos on that end of it if you liked this video and you found
it helpful please go ahead and like it and share it I'd also love to hear from
you what solutions do you have do you need help getting started if you're just
getting started this is overwhelming let me know I could converse if you've got
you know a dozen properties and it's a full-time job and you need help let me
know I've got a great bookkeeper and maybe we can work you know something out
between you or make some introductions so bookkeeping is a nightmare for
anybody just leave comment below and we'll see what we can do to help out in
the meantime we'd love to see you over at our Facebook group it's growing it's
a lot of activity there's expert advice so like for instance if you're in a
different country and I'm only talking about the United States as far as our
bookkeeping and you have a specific question to say the UK and their
accounting there's very likely somebody who has that experience on our Facebook
group so come over join us contribute to the community we'd love to have you and
in the meantime if you haven't subscribed to the YouTube channel
really