How Red Cottage Frees Up Two Days of Monthly Leadership Time with Topkey

Introduction: Elevating the Vacation Rental Experience Around NYC

Founded over 20 years ago and under new ownership since 2021, Red Cottage has established itself as the premier vacation rental management company for New York City residents seeking thoughtfully designed getaways in destinations surrounding the city. With a portfolio of over 150 properties and growing at a pace of one new property per week, Red Cottage is quickly becoming a top choice for weekend escapes from New York City.

Ryan Toner, Head of Operations at Red Cottage, brings extensive hospitality experience from his 12-year tenure with Fairmont Hotels and Resorts. After working at the prestigious Plaza Hotel in New York City, Ryan was drawn to the emerging short-term rental industry, eventually joining Red Cottage in 2021.

Under Ryan and CEO Matthew Orley's leadership, Red Cottage has grown from approximately 60 properties to 150, with ambitious expansion plans. Unlike many companies that pursue rapid growth at the expense of quality, Red Cottage has been methodical in its approach, focusing on curating a portfolio of premier, thoughtfully designed properties.

The Challenge: Managing Complex Financial Operations at Scale

As Red Cottage expanded its portfolio of premium vacation rentals, the company's financial operations became increasingly complex and difficult to manage. Their growth brought several key challenges:

A Vast Network of Vendors and Service Providers

"It's complex for being a small business," Ryan explains. "In terms of the number of properties and stakeholders that we have, and the sheer number of vendors and service providers that we utilize amongst all of our properties.“

Most properties have their own dedicated caretaker, along with various service providers for cleaning, landscaping, snow removal, and other maintenance tasks. This meant Red Cottage had to manage relationships with dozens of vendors, each sending individual invoices.

"We might be processing upwards of 30 to 50 invoices weekly, just for vendors, not including any cleaners, or any of our purchasing or maintenance people," Ryan explains.

Manual Reconciliation and Classification

Before implementing Topkey, Red Cottage relied on antiquated manual processes for expense tracking and reconciliation. This created significant inefficiencies and visibility issues.

"Previously it was all very manual, a lot of Google Docs and spreadsheets" Ryan recalls.

Without a centralized system, the accounting team struggled to properly categorize transactions, with expenses often misclassified or lost entirely. This created a month-end reconciliation nightmare.

Ryan says, 'We manually went through credit card statements, circled items, and shared documents back and forth via email or Slack, trying to figure out who purchased what, and why we bought six space heaters at the beginning of the month. It was just very difficult to keep track.”

Expense Leakage and Missed Owner Reimbursements

Perhaps the most significant challenge was ensuring that expenses that should be billed back to property owners were accurately tracked and charged. Without proper systems in place, Red Cottage was absorbing costs that should have been passed through to owners.

"We purchase things on behalf of our homeowners and they need to hit the appropriate statement at the end of the month. And because of the volume of transactions that we're processing, if we're not keeping close tabs on that, it would be a nightmare at the end of the month to make sure that nobody's being overcharged or has duplicate charges or that we don't have leakage or that we're not absorbing a budget cost that we're really not responsible for," Ryan explains.

Dispersed Teams and Limited Visibility

As a highly distributed company with team members working remotely across different locations, Red Cottage previously struggled with visibility into spending across departments.

"Our accounting team is not out in the field. They don't know one property from another, or the hardware store that we're picking stuff up at," Ryan notes. This lack of context made it challenging for them to properly categorize expenses without significant input from the operations staff.

The Solution: Implementing Topkey's Expense Management Platform

Red Cottage needed a solution that could address the complex financial operations inherent to vacation rental management while providing real-time visibility across their growing portfolio. After evaluating several options, they chose Topkey for its intuitive interface, powerful property-level tagging capabilities, and exceptional customer support.

Real-Time Expense Tracking with Mobile Cards

One of the most transformative aspects of implementing Topkey was the ability to issue cards to team members and track expenses in real-time through the mobile app.

"One of the easiest things to point to in terms of Topkey functionality that has really helped us is the cards that are attached to Topkey," Ryan explains.

"I know what everyone on my team is spending. They have the ability in real time, if they're picking up something at a hardware store or if they're taking a client for lunch, to upload those receipts, to classify them to the appropriate GL code."

This real-time tracking eliminated the need for manual reconciliation of credit card statements at month-end, saving significant time and reducing errors.

Streamlined Bill Pay and Invoice Management

Red Cottage also implemented Topkey's bill pay functionality, creating a streamlined workflow for managing vendor invoices.

"Another tool that we've really leaned into heavily is all of our vendors' invoices now go directly to Topkey," Ryan shares. 

By routing all invoices through Topkey, Red Cottage was able to eliminate manual data entry and create a systematic process for reviewing and paying invoices.

"As part of our weekly reconciliation and AP processes, we ensure that any invoices not yet passed on to accounting or entered into Topkey are added," Ryan explains.

"This allows us to review everything on Friday mornings and easily run our AP process. Everything's already in there and it comes right out of our Topkey trust account, so it is very, very easy."

Property-Level Expense Tagging and GL Integration

The ability to tag expenses to specific properties and automatically map them to the correct general ledger categories in QuickBooks was another key advantage of Topkey for Red Cottage.

"We love the ability to automatically tag a transaction to a specific property and a specific owner. We love that our QuickBooks GL categories float straight in," Ryan notes.

This integration eliminated the need for manual data entry between systems and ensured that expenses were properly categorized for both operational reporting and owner statements.

Enhanced Financial Visibility for Leadership

Topkey provided Red Cottage's leadership team with unprecedented visibility into their financial operations, allowing them to make data-driven decisions without having to rely on monthly financial statements.

"I don't have to wait for a P&L or any official month-end documentation to get my finger on the pulse of where we stand for the month," Ryan explains.

"Without being an accountant, without being in QuickBooks, I think the platform allows me as an operator to get into the system and know what we're spending, how we're tracking towards budget without having to tap someone in accounting or tap another leader and ask them how much they've spent in regards to their budget month in month out."

Dedicated Support for Implementation and Growth

Beyond the technology itself, Red Cottage found that Topkey's customer support was instrumental in their successful implementation and ongoing use of the platform.

"This played a big part in us deciding to come over. The team was just super accessible to us through the whole process. We've talked to them probably weekly whether we need to talk or not," Ryan shares. "If I email a question, I know they probably respond to me within like 30 minutes, which I can't say the same for most of the other products that we use."

Results: Driving Efficiency, Accuracy, and Growth

Implementing Topkey has transformed Red Cottage's financial operations, delivering measurable improvements in efficiency, accuracy, and financial control.

Significant Time Savings

One of the most immediate benefits has been the reduction in time spent on financial reconciliation and month-end processes.

"We have a weekly internal initiative where we expect everyone to clean up their transactions in Topkey. So when we're closing the month, that's already done—those transactions are already classified, so it doesn't fall on the accounting team to do much of anything other than just look for places where things were misclassified," Ryan explains.

This streamlined process has resulted in substantial time savings across the organization. "I would venture a guess that it probably saves everyone individually somewhere between an hour to two hours a month, and if we're talking about six to eight people, we're easily talking almost like two full days of leadership productivity that's not spent on month-end accounting," Ryan estimates.

Eliminated Expense Leakage

By implementing proper expense tracking and property tagging in Topkey, Red Cottage has drastically reduced expense leakage and ensured that costs are properly billed back to property owners.

Ryan notes that in early 2023, "We were eating a lot of maintenance expenses that we shouldn't have been because they hit somebody's email inbox, they got passed to accounting, they were forgotten by month-end, and we just absorbed the expenses. We didn’t even know that it was hitting our P&L." 

"Now, running those expense reports out of Topkey is part of our month-end accounting practices. Prior to any statements being generated, we're running that report for any credit card charges over the last 30 days. We make sure that anything that is billed to the owner is showing up on a statement," Ryan explains. "It also allows us to track and add markups where we need to and make sure that anything that we are eating the cost on is intentional, not accidental."

This systematic approach has virtually eliminated the unintentional absorption of expenses that should be billed to owners. 

Enhanced Cost Control and Budget Management

Topkey has also empowered Red Cottage to better control costs and identify opportunities for savings. Ryan shares a recent example of how the platform helped them identify an overbilling issue:

"We have a number of storage units upstate... I was looking at it because I'd be spending on storage for supplies on a monthly basis and an annual basis. With Topkey I'm quickly able to pull up our credit card transactions for all our storage units and figure out if we need to go back and renegotiate or find a cheaper alternative. I actually found out we were overpaying about $100 on one of our storage units based on what the contract was and what is hitting our Topkey card. That's just one example."

This level of visibility allows Red Cottage to quickly identify and address discrepancies, ensuring they're not overpaying for services.

Improved Guest Experience Through Better Financial Management

Perhaps most importantly, Topkey has allowed Red Cottage to better manage expenses related to enhancing the guest experience, ensuring that necessary purchases to improve a stay can be properly tracked and billed.

"A lot of those things that were touching the guest experience that were the right thing to do on behalf of the guest and the homeowner, we were just absorbing those expenses. It might be a space heater, it might be a space fan, it could be a disposable set of blackout curtains—any of those types of things that we're purchasing to support the guest experience day in and day out. They're not hitting our bottom line anymore," Ryan explains.

This improved tracking has allowed Red Cottage to continue providing exceptional guest experiences while maintaining healthy margins.

Looking Ahead: Supporting Sustainable Growth

With Topkey as a cornerstone of their financial operations, Red Cottage is well-positioned to continue its strategic expansion across the Northeast. The company aims to "have New York City surrounded on all sides" with premium vacation rental properties in every drive-to destination around the metropolitan area.

"We want to be everyone's first choice when they're leaving New York City for the weekend," Ryan shares.

By implementing Topkey early in their growth journey, Red Cottage has built a financial foundation that can scale efficiently as they continue to add properties at an aggressive pace of one per week. The platform's automated workflows, real-time visibility, and exceptional support have been key factors in the company's ability to maintain its high standards while expanding rapidly.

For Ryan, the value of Topkey extends far beyond simple expense tracking. When asked what he tells other property managers about the platform, he emphasizes:

"I tell people all the time when we bump into each other—Topkey is what we're using. I use the system every single day."

Ready to transform your vacation rental company's financial operations? Schedule a demo with Topkey today to learn how we can help automate and improve your financial management.

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