Landlord accounting is essentially bookkeeping for rental property. Tracking income and expenses is important for tax purposes and overall good business practice. The data from tracking what the rental property brings in versus what it spends to operate can be used to create helpful reports. One report in particular, the profit and loss statement, can gauge the health of the business and assist at tax time.
The profit and loss statement is a report that summarizes revenues received and expenses incurred with managing rental property. It is also known in shorthand as the P&L. It reveals how well or poorly the business is doing by its net income or loss. With this report, landlords can identify areas to reduce expenses or make improvements to strengthen the business.
Landlord accounting software makes it easy to generate a profit and loss statement. Since landlords need to record income and expenses, it’s nice to benefit from this task with helpful reports like the P&L. If landlords track income and expenses by hand or with a spreadsheet, these methods generally do not generate a profit and loss statement. Consider RentalIncomeExpense.com for landlord accounting. It’s free, easy to use, and generates reports including a profit and loss statement.