Hello, short-term rental managers! There’s no chance you’ve been working in this industry and haven’t heard about trust accounting software or possibly considered it for your business…
It might sound a bit scary or complex, but understanding it is key to running a successful short-term rental business. Let’s bust some common myths and set the record straight.
Misconception 1: Trust Accounting Is Only for Large Property Management Firms
Many business owners dismiss trust accounting as something only the big players need to worry about. Not true! Trust accounting is crucial for anyone managing other people’s money, no matter the size of your business. It gives you transparency, builds trust with property owners, and keeps you legally compliant. Even small-scale rental managers can see big benefits from implementing trust accounting practices – even if the law doesn’t specifically require you to use it.
Misconception 2: Trust Accounting Software Is Too Expensive
There’s a notion that trust accounting software costs a fortune. While there’s an investment involved and sometimes more processing required, the returns in reduced errors, better financial management and reliable reporting are totally worth it. Plus, there are various software options to work with different budgets.
Misconception 3: Trust Accounting Is Overly Complicated
At first glance, trust accounting might seem daunting and overly complicated – but most business owners feel that way about regular accounting, right? The good news is, you don’t have to actually do the trust accounting yourself. Just like your regular accounting and bookkeeping, you can get an expert to help you – saving you even more time AND giving you peace of mind.
Misconception 4: Trust Accounting Only Benefits the Property Owners
Some think trust accounting only helps property owners. In reality though, it protects both parties. For short-term rental managers, it offers a clear, organised financial picture, reducing errors and potential legal issues. And for property owners, it ensures transparency and confidence that their funds are managed correctly which only further strengthens your client relationships. Plus, you get professional, consistent looking owner/disbursement reports. No more ad-hoc Excel spreadsheets or Word documents (which we all know are prone to errors!).
Misconception 5: You Can Use Regular Accounting Software for Trust Accounting
Regular accounting software like Xero or QuickBooks is fantastic for all your general business recordkeeping needs but isn’t designed for trust accounting’s specialised requirements. And like anything, when you don’t use the right tools it usually takes longer and the results are never as good. For short-term rental managers, trust accounting is like a custom-built platform that has been specifically designed to be able to deal with all those unique processes your business requires. It manages multiple clients’ funds, ensures compliance with government regulations, and provides detailed transaction tracking without missing a beat.
How to Correct These Misconceptions
The best way to nip these concerns in the bud, is to take a look at the trust accounting options out there. There are heaps of different and modern apps that can work alongside other systems you may already be using in your business. Or you might find the perfect system that can combine multiple processes and create efficiencies across your whole business.
If you’re struggling to weigh up all the options and are looking for some further advice, feel free to reach out so we can share our experiences with you.
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