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  3. Business models
  4. Informative

Creating a business model

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Accounting by Guesty is a premium feature available to Pro users only. Please contact us to discuss activating it.

The business model setup is the basis for Accounting by Guesty.

Create one or more business models to define how each charge or expense is calculated and shared between your business, the owner, or vendor. Before proceeding, learn more in our business model overview article and video, and review our checklist for onboarding to Accounting.

Before you begin

Set up in Guesty
  • Verify your Guesty account information

Make sure that your company information, including address and time zone, are accurate. See details here about what information you can change yourself and when you need to contact us.

  • Add owners and assign to listings

Add your owners in Guesty to calculate how profits are shared between you and the owner, then assign an owner to each listing.

Only one owner can be assigned to each listing before you add the listing to a business model.

  • Add vendors

Add your vendors to Guesty to keep track of payments owed to them from your business’s trust account.

  • Set up additional fees

Set up an inventory of additional fees to charge guests for extra services, such as early check-in or laundry services. At least one fee must be set up before creating a business model.

  • Set up taxes

Set up your taxes on the account or listing level. At least one tax must be set up before creating a business model.

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Important:

If you do not have at least one additional fee or a tax added in Guesty, an error will occur when you try to create a business model. 

Once a business model is saved, it can no longer be edited. 

Create your first business model and activate Accounting

First time steps

Step by step:

  1. Sign in to your Guesty account.
  2. In the top navigation bar, click the mode selector and select Accounting mode.
  3. Click Business models.
  4. Click Add business model.
  5. Fill in the business model fields. Learn more below.
  6. At the top right, click Create business model.
  7. At the top right of the business model page, click Activate Accounting.
  8. In the pop-up, select the entry trigger, or recognition date, for each income and expense in your business models:
  • Check-in: The transaction will be recognized upon check-in, even if the guest paid before the check-in date
  • Check-out: The transaction will be recognized upon check-out, even if the guest paid before the check-out date
  • Nightly: The transaction will be recognized on a nightly basis, with a journal entry created for each night separately. For example, if a reservation runs from 25 May until 5 June, the transaction will be recognized for each night even though they are in two different months. Learn more.

The entry triggers you selected will be the default revenue recognition date in every business model you create after activating Accounting. You can change this in each business model as needed.

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 Create a new business model

Step by step:

  1. Sign in to your Guesty account.
  2. In the top navigation bar, click the mode selector and select Accounting mode.
  3. Click Business models.
  4. At the top right, click Add business model.
  5. Fill in the business model fields. Learn more below.
  6. At the top right, click Save.

Create a business model based on an existing model

If you'd like to create a new business model with settings similar to an existing one, follow these steps.

Step by step:

  1. Sign in to your Guesty account.
  2. In the top navigation bar, click the mode selector and select Accounting mode.
  3. Click Business models.
  4. Click the business model you'd like to copy to open the settings.
  5. Enter a new name and edit the settings as needed for the new business model.
  6. At the top right, click Save as new.  

Tip:

The "Save as new" button appears as soon as you make an edit.  

Business model fields explained

Name

Create the business model's internal name. It will only be used in Guesty to help you identify the model and is not visible to guests.

Activation date

This is the date on which the business model will become active and apply to the listings assigned to it. The activation date defaults to the creation date, however you can change it to be in the past or in the future.

For example, if there are upcoming changes in the revenue share agreement with your owner, create a business model with a future date, and assign the listing to it. The changes will apply from the activation date.

Description

Provide a short explanation of the business model, to help you find it quickly when needed.

PMC Commission

Net rental income

Decide what is added to your net rental income (NRI) on top of the accommodation fare, which is always added. Your commission will be calculated out of this amount.

Commission setup

Choose how much the PMC commission for reservations will be out of the net rental income. This is set separately for confirmed and for canceled reservations. 

Note:

If there is an NRI balance for a canceled reservation, it is recognized at check-in and split according to this setup. This is separate from a cancellation fee, which is set up under "Trust account income" below.

Click "Add condition per channel or source" to set specific commissions for connected booking channels or for other sources like a direct booking website.

Trust account income

Use the fields in this section to set up how the income is split between the PMC (you), vendors, and owners.

Add recurring owner charge

If there is an owner charge that happens repeatedly, you may want to set a recurring charge. After creating a name for the owner charge, choose the relevant category, write a description of the expense, and choose how often the charge should occur based on the following parameters:

  • Per stay
  • Per guest
  • Per night
  • Per guest per night
  • Per month
  • Per quarter
  • Per Stripe payment
  • Per GuestyPay payment (Pilot)

Select the recognition date, which defines the date the transaction should be recognized in your accounting. The options are:

Click the toggle Charge for the expense and set the revenue share between the PMC and the owner, which you can set either as an amount or percentage. Choose the conditions for this expense and what manual reservations or channel reservations the conditions will apply to.

An example of a recurring owner charge could be a monthly marketing fee that is split 50%-50% between the PMC and the vendor.

Cancellation fee

Choose how to split the payment for a canceled reservation between the PMC and the owner.

Note:

See "PMC Commission" section above to set the split for canceled reservation with an NRI balance that is recognized at check-in.

Cleaning fee

Choose how to split the payment for a reservation's cleaning fee between the PMC and the owner/vendor, for confirmed and canceled reservations.

The split can be based on percentages, such that you always get X percent of the fee and the owner/vendor gets 100-X percent of the fee, or you can decide that you will always get a fixed amount out of the fee, and make sure that the rest of the fee is paid to the owner/vendor.

Guest taxes

Choose whether the owner or the PMC is responsible to remit the taxes to the relevant tax authorities.

Additional fees

For each additional fee, choose how to split the payment between the PMC and the owner/vendor.

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Trust account expenses

Add recurring expense

If there is a vendor expense that happens repeatedly, you may want to set a recurring expense. After creating a name for the expense, choose the relevant category, write a description, choose the value of the expense (by amount or percentage) and the relevant vendor, and choose how often the charge should occur based on the following parameters:

  • Per stay
  • Per guest
  • Per night
  • Per guest per night
  • Per month
  • Per quarter
  • Per Stripe payment
  • Per GuestyPay payment (Pilot)

Select the recognition date, which defines when the transaction should be recognized in your accounting. The options are:

Click the toggle Charge for the expense and set the revenue share between the PMC and the owner, which you can set either as an amount or percentage. Choose the conditions for this expense and what manual reservations or channel reservations the conditions will apply to.

Channel commission

Choose how to split the payment for booking channels commissions between the PMC and the owner, based on your setup in Guesty.

Note:

A recurring expense is paid from the trust account, not the operational account of the PMC.

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Next steps

  • Assign listings to your business model

Follow the steps here to assign listings to your business model.

  • Verify business model calculations

Once you have a reservation processed by a business model, check that all four sections of the accounting folio were calculated accordingly.

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