Tracking income and costs per property in Xero

A total across all your rentals tells you very little. What you want to know is which property is carrying the others, and which one quietly costs you money. Xero can show you, if each line is tagged to its property.

How tracking categories work

Xero has a feature called tracking categories. You make a category, for example "Property", and add an option for each of your properties. Then you tag each income or cost line with one option, and reports can be split by that category.

The alternative is a separate set of accounts for every property. That works for one or two properties, and turns into a long, messy list as the number grows. Tracking keeps the accounts the same and moves the split into the tag.

It only works if the tags are there. Common ways it falls over: lines that were never tagged, tags added to the bank payment instead of the statement lines, and costs that cover several properties and get put on one.

A good habit is one "Property" category, one option per property named by its street address, and a rule that nothing is posted without one. Shared costs get split into one line per property.

Setting it up takes minutes. Make the category, add an option for each property, and from then on tag every line. The work is in keeping at it, which is why it helps when the tagging happens as the statement arrives, not months later.

Mistakes to avoid

• Naming options inconsistently, such as "Harbour St" in one place and "12 Harbour Street" in another.
• Tagging only the income. A property's costs need its tag as much as its rent.
• Tagging the bank payment instead of the statement lines. One payment can't be split by property.
• Renaming a property part-way through the year, which splits its figures across two options.
• Putting a shared cost on the first property. Split it, so no property looks better or worse than it is.

This page is general information, not tax or accounting advice. Check your own situation with your accountant.

A worked example

How Zerocile handles it

Zerocile reads the property category you already have in Xero. Each option in it becomes one of your properties, and you check the list once, when you set up.

From then on it matches the address printed on each statement line to a property, and posts the line to Xero tagged with that property's option. Rent, fees and repairs from one statement land on the right properties without anyone choosing.

If a line names an address it doesn't recognise, it asks you which property it belongs to, and remembers the answer. Nothing new goes in without your OK.

Questions