Hotel accounting is not an easy task to accomplish, especially if you are new to the industry. There are many hotel accounting challenges that must be addressed throughout this process. However, with the right knowledge and tools, it can be done efficiently and effectively.
One thing every hotel accounting department should learn how to do is report daily revenue through a sales variance analysis. This allows management to see how much money was made versus budgeted on any given day during the time period being reported on. This crucial information can help them determine if goals were met or surpassed for each month, quarter and year so far which helps keep their employees motivated as well as show customers they are delivering what was promised or agreed upon in contract negotiations. This also helps avoid unpleasant surprises at the end of the year when they see how much money was actually earned compared to what was projected.
Another challenge for hotel accounting is determining where to set prices in order to maximize earnings and achieve a desired target net income. There are many factors that must be considered when setting room rates, such as current demand, competitor pricing, location of property and overall condition of the rooms themselves. A good rule-of-thumb is to do a cost analysis versus the competitors in order to ensure you aren’t charging too much or too little per night.
A third common issue in hotel accounting is keeping track of all transactions from when guests check in until they checkout. This includes everything from food and beverage sales, spa treatments, events hosted, etc. This is especially important during the busy winter and summer seasons since there are usually more activities to accommodate for, which may require more employees on duty at once.
Each day when guests check out they will have a final transaction with their bill which often includes charges that were not included in the original price quoted, such as mini-bar items or added charges for room service if it was ordered after receiving the guest’s dinner order. These must be recorded separately so they are not lumped under “miscellaneous” expenses since these are essentially additional revenue being produced by the hotel/resort.
Lastly, one of the biggest challenges associated with hotel accounting is having everything properly documented so it can be accurately for taxation purposes. The taxes are what you are paying to the government, so it is important they are paid properly and on time. If taxes aren’t paid when due the hotel/resort could be shut down until everything is caught up, which can cause a lot of setbacks if that happens in high tourist seasons.
The list goes on!
Hotelier Books has proven to be useful in addressing diverse crucial accounting challenges like managing daily sales, bank reconciliation, generating reports, monitoring KPIs, performing payroll import & review, handling receivables and payables.
This platform was specifically designed to help individuals who manage limited service hotels who aspire to stay organized with all financial transactions, accounting-related tasks and stay tax compliant along with creating accurate budgets for future periods based on past performance.
Just remember for every challenge there is usually an effective solution or method that can be used to overcome it. You just need to know what that is or hire someone who does before you run into problems later on.
For any other questions or concerns please feel free to call us at +1-866-964-6253, we’ll be happy to assist you!