When using Guesty's Accounting solution, there are two accounting methods to choose from based on your compliance or jurisdiction preferences and needs. Both methods recognize revenue based on your business model settings.
- Accrual basis accounting - this is Guesty's default method where revenue is recognized when the service is provided even before the guest pays
- Cash basis accounting - a method where revenue is recognized when the service is provided only after the guest pays
Accrual basis accounting allows you to pay owners or vendors at any time, as revenue is recognized before receiving payment. Cash basis accounting only enables you to pay owners and vendors after payment is received. See how to select your accounting method below.
Note:
If a reservation is partially paid between check-in and check-out dates, we recognize the revenue up to the amount the guest has already paid. The following journal entries will be recognized:
- Net rental income (as defined in your business model)
- PMC commission
- VAT to charge the owner for the commission (if applicable)
Step by step:
Tip:
Beta navigation users, please note that the steps below refer to the navigation as seen in the Legacy mode. Read more here about locating menu items in the new navigation.
- Sign in to your Guesty account.
- In the top menu, hover over Financials.
- From the drop-down, click Accounting Setup.
- In the menu to the left, click Accounting method.
- Select Accrual basis or Cash basis.
Note:
Only team members with permission to edit accounting settings can switch between accounting methods.
