Want to master STR bookkeeping and trust accounting?
This guide breaks down the flow of funds in your short-term rental business - from guest payments to owner payouts. Whether you're handling direct bookings, using Airbnb or VRBO, or managing multiple bank accounts, a clean flow of funds is essential. We'll show you how to stay compliant, track money clearly, and avoid common mistakes - plus which tools make it seamless.
What Is Flow of Funds in STR Bookkeeping?
"Flow of funds" refers to how money moves through your STR business - from guest bookings, through your trust account, to owners, vendors, and finally your operating account. Unlike typical businesses, STR managers often handle owner funds, making trust accounting legally required and operationally critical.
Step-by-Step: How Money Flows from Guests to Owners
1. Guest Booking and Payment Channels
Guest revenue comes from multiple sources:
2. Deposits to the Trust Account
Funds land in your trust account based on channel rules:
Trust accounting is key here. You may be holding funds for months before the actual stay.
3. Recording and Reconciliation with STR Software
Use STR-specific tools like VR Platform to:
This ensures you’ve received full payment before issuing owner payouts.
4. Owner Payouts from the Trust Account
Payouts should occur monthly and only from the trust account. Use tools like:
5. Handling Lodging Tax Payments
If you're collecting taxes on behalf of owners:
6. Paying Vendors and Cleaners Correctly
Property management expenses:
Owner-related expenses:
Cleaner payments:
7. End-of-Month Transfers to the Operating Account
After reconciling:
Common STR Bookkeeping Mistakes to Avoid
Best Tools for Managing STR Flow of Funds
How Keystone Bookkeepers Simplifies It All
FAQs
What is a trust account in STR bookkeeping?
A trust account holds guest funds before they are paid to owners or used for taxes. It's legally required in most jurisdictions.
How often should I reconcile my trust account?
Monthly, at minimum. You should always know how much is held for each property.
Can I pay expenses from the trust account?
Only if the expense is on behalf of an owner. Never pay company or PM expenses from the trust account.
What if I make a payment from the wrong account?
Adjust your end-of-month transfer to compensate. Accurate bookkeeping solves most issues.
Does Keystone handle vacation tax filings too?
Yes - monthly, quarterly, and annual lodging tax filings across the U.S. and Canada.