Accounting software offers powerful tools to help you better manage your investment portfolio. How though, do you use Xero for rentals?
Keeping on top of your finances is an essential part of managing a rental property business. Landlords need to understand cash flow, track deductible expenses, and run quarterly and end-of-year financial reports. With the right tools and data, landlords can improve business practices, reduce overheads, maximize profits and scale their business.
However, using the wrong tools can cause additional headaches, taking up more time than necessary and preventing business growth. Should you choose small business accounting software like Xero, industry-specific software like Landlord Studio, or is there a way to get the best of both worlds?
We take a look at the pros and cons of Xero for rentals, and the benefits of using the Landlord Studio integration with Xero.
Many landlords and real estate investors use Xero to track their rental property accounts because it offers the comprehensive accounting they need. However, it also has a few weaknesses for use by landlords.
Xero is ultimately an excellent accounting platform for small businesses, but it isn’t designed for real estate investors and this causes a few issues. To become proficient using this software and mitigate these weaknesses requires overcoming a steep learning curve. You might never get the additional time-saving property management functionality that you would get with a property management-specific software.
So, what’s the solution?
The ideal solution is to merge a property management software like Landlord Studio with Xero. This allows you to take advantage of the property management specific features and easy-to-use income and expen see tracking of Landlord Studio whilst simultaneously leveraging the advanced accounting and reporting functionality of Xero.
Upload this free chart of accounts designed for real estate investors to Xero to quickly and efficiently complete your Xero set-up.
The best way to use Xero for rentals is via the Landlord Studio integration. Here’s how to get set up.
Step 1: Set up your Xero account
You can download and Import our free Chart of Accounts designed specifically for the real estate industry.
Get the Free Chart of Accounts Template
Set up bank accounts and tracking categories.
Step 2: Log into Landlord Studio and go to “Integrations”
Step 3: Map transaction categories to your chart of accounts
If you used our free chart of accounts you can see our recommended transaction category mapping here.
Step 4: Map bank accounts and tracking categories
All data entered into the Landlord Studio system will automatically be pushed and synchronized with your Xero account. This is a one-way integration meaning edits made in Xero won’t appear in Landlord Studio.
We recommend managing your day-to-day income and expense tracking on Landlord Studio and taking advantage of the comprehensive financial and tax reporting in Xero at the end of the year.
By pairing Xero with Landlord Studio you get the best of both worlds.
When you connect your Xero account, all of your financial data is automatically synchronized. This enables you to avoid double handling of data, reducing errors and saving you time. It also allows you to give your accountant access to the advanced customizable Xero reporting functionality, perfect for tax time and advanced financial planning.
And you can simultaneously take advantage of the easy-to-use income and expense tracking and property management tools of Landlord Studio.
Landlord Studio’s property management-specific tools and features are designed to save you time and money in the day-to-day operation of your rentals. The app, available on iOS and Android, makes tracking expenses in real-time a simple and enjoyable task.
You can digitize receipts at the point of sale, and use our bank feed feature to reconcile transactions as they happen. And use the online rent collection tool to ensure on-time rent payments every month, fill your rentals faster with great tenants with rental listings and tenant screening, and stay on top of important operational tasks.