HOW TO reconcile bank feeds of Airbnb payouts in XERO

Posted on by

How to Reconcile Airbnb Payments in Xero 

If you’re managing Airbnb properties, keeping your accounts tidy is crucial. Here’s a simple step-by-step guide to reconciling Airbnb payouts, refunds, and batch payments through Xero’s Bank Reconciliation View.

Before attempting bank reconciliation, you need to make sure all the Airbnb invoices have been uploaded, you can see options on our website either through 3rd Party app or Manually

 

If you prefer a video of step by step, please click on the thumbnail below:

 

If you prefer a step by step “click here click there” instruction, click on the thumbnail below:

reconcile aribnb payout with xero

Step 1: Open Bank Reconciliation in Xero

  1. Log into Xero:

    • Head to Xero and select your organisation.

  2. Go to Bank Accounts:

    • Click Dashboard.
    • Choose the relevant bank account that receives Airbnb payouts.
    • Click Reconcile (XX) items to open the reconciliation screen.

Step 2: Filter for Airbnb Transactions

  1. Use Search or Filter:

    • On the bank reconciliation page, use the Search or Filter option.
    • Type Airbnb in the search bar to show all Airbnb-related transactions.

  2. Identify Transaction Types:

    • Look for Airbnb payouts, refunds, and any service fees.

Step 3: Match Single Payments (One-to-One Matching)

If Airbnb has sent individual payouts for each reservation:

  1. Find the Matching Invoice:

    • Xero may suggest a match automatically (which will show in green).
    • If not, click Find & Match to search for the correct invoice.

  2. Check and Confirm:

    • Make sure the invoice amount matches the Airbnb payout.
    • Click OK to reconcile.

Step 4: Match Batch Payments (One-to-Many Matching)

If Airbnb has combined multiple reservations into one payout:

  1. Click Find & Match:

    • Locate the bank transaction in the Reconcile tab.
    • Click Find & Match.

  2. Select Multiple Invoices:

    • Use the search bar to find and select all relevant invoices.
    • Ensure the total matches the Airbnb payout amount.

  3. Confirm and Reconcile:

    • Click OK once everything adds up.

Step 5: Handle Refunds and Deductions

If you’ve had to refund a guest or received a chargeback, you have two options:

Option 1: Allocate Credit Note to one of the batch invoices

  1. Go to Business > Invoices or search under magnifying glass the value
  2. Open the relevant Credit Note.
  3. Apply the credit to the relevant batch of invoices this will show one of the invoice.

Option 2: Refund “cash” to Credit Note

  1. Go to Business > Invoices or search under magnifying glass the value
  2. Open the relevant Credit Note
  3. Make a cash refund with correct date and to the correct bank account
  4. During Bank Reconciliation – select Show spent money
  5. You can go back to step 4 to match and batch and the correct amount of all invoices and refunds will match to the payout figure

Step 6: Review and Finalise

  1. Double-Check Totals:
    • Ensure all Airbnb-related transactions (payouts, refunds, and fees) match your bank statement.
  2. Complete the Reconciliation:
    • Click OK to finalise the reconciliation.

Done!

You’ve successfully reconciled Airbnb payments in Xero! Keeping everything matched ensures that your accounts stay clean and your Airbnb income is accurately reflected.

Need help with automating Airbnb-Xero integrations? Get in touch to find out how we can make it even easier!

When reconciling Airbnb payouts in Xero (or any accounting system), it’s crucial to properly account for the collected rental income and Airbnb fees separately. Here’s why you might struggle with reconciliation and why it’s important to break down these amounts correctly:

 

Reasons Why You Can’t Reconcile Airbnb Payouts Easily

  1. Payouts Don’t Match Booking Totals
    Airbnb deposits a net amount into your bank account (rental income minus fees), which doesn’t match the total gross rental amount shown on invoices. This discrepancy creates difficulty in matching payments directly to sales invoices.
  2. Multiple Bookings in One Payout
    Airbnb combines multiple reservations into a single payout, often covering different properties or guest stays. Without splitting these amounts, reconciling them to individual invoices becomes impossible.
  3. Timing Differences
    • Payouts may be delayed, leading to income received in one period while the booking occurred in another.
    • Deposits and refunds may be handled separately by Airbnb, causing timing mismatches.
  4. Refunds and Adjustments
    Partial refunds or adjustments are often bundled in payouts, which complicates matching them to sales.
  5. Service Fees Are Deducted
    Airbnb deducts service fees (host and guest) before making payouts. If these fees aren’t recorded separately, the figures won’t align with sales invoices.

Why It’s Important to Account for Fees and Rental Income Separately

  1. Accurate Income Reporting
    • Recording gross rental income ensures that you’re reporting the correct turnover, which is especially important if the property business is VAT-registered or approaching the threshold.
    • Deducting Airbnb fees as an expense separately maintains clean and accurate accounts.
  2. VAT Compliance and Tax Reporting
    • Proper classification of income and expenses helps ensure VAT is correctly accounted for, particularly when VAT is applicable on Airbnb fees (if registered under TOMS or UK VAT).
    • Misreporting figures can result in incorrect tax returns, leading to penalties or overpayment.
  3. Tracking Property Profitability
    • If managing multiple properties, recording income and expenses separately per property allows you to track the profitability of each unit.
    • Grouping all income into one pot makes it impossible to assess which property is performing best.
  4. Reconciliation Becomes Easier
    • When sales invoices are created for each reservation or batch of reservations, reconciling payments is straightforward.
    • Airbnb fees can be posted to a separate nominal code, making it easy to identify and track deductions.
  5. Avoiding Errors with Refunds and Adjustments
    • Refunds often require careful handling to ensure they are deducted from the correct reservation income.
    • Recording separate invoices or credits helps keep audit trails clean.

Best Practices for Airbnb Reconciliation

  • Import Reservations Using a Tool
    Use tools like Tallybreeze, Hospitable, or other integrations to automatically push Airbnb reservation details (fees and income) to Xero.
  • Create Separate Sales Invoices for Each Property
    Break down invoices by property and reflect the gross amount, deducting the Airbnb fees via a separate line item or invoice.
  • Use Clearing Accounts for Payouts
    Post Airbnb payouts to a clearing account and match income and fees separately before reconciling to the bank.

Would you like a step-by-step guide to set up this process in Xero tailored to your business, contact us?