Hotel accounting: tasks, specifics & tips

Recording all incoming and outgoing payments

All revenue (e.g. room bookings, restaurant bills, gift shop purchases, spa services) and outgoings (e.g. wages, supply companies, maintenance costs) have to be recorded correctly and posted to the right accounts.

Payment reconciliation

In the context of electronic payments in particular, the sales tracked by the hotel tills have to be matched to the actual payments coming into the accounts. This process is also called payment reconciliation.

Budgeting and financial planning

Hotel accounting provides a key basis for generating budgets and overall financial planning. In the process, accounting analyses figures from the past and makes forecasts that enable well-informed decisions to be made.

Reporting

Generating financial reports is another hotel accounting task, such as profit and loss accounts, balance sheets or cashflow analysis. These reports provide important insights into the hotel’s liquidity and creditworthiness.

High number of transactions

Whether room bookings, restaurant bills, gift shop purchases, spa services or other services: in general, a high number of transactions can quickly mount up in hotels.

Diverse sources of revenue

Hotels make their revenue in very different ways, e.g. by renting accommodation and conference spaces, through food and drink, sales in gift shops or spa services. Accounting has to record all these different income sources separately (and with transaction accuracy).

Handling different VAT rates

Different services incur different rates of VAT. In the case of hotels, it’s often the staff at the Front Desk who are responsible for entering the correct VAT rates in the PMS. This is no simple task, and Front Desk employees often have to rely on the expertise of the hotel’s Accounting department to ensure a correct entry.

Different (till) systems in use

In many cases, the various areas of a hotel, such as the restaurant or the spa, work with different till systems. This first has to be consolidated in the PMS and then transferred into the Accounting ERP. There are multiple interfaces in this process, which can lead to information loss or errors.

Day and night operations

The hotel business doesn’t take the night off. The quieter night hours are often used for auditing and payment reconciliation. Night porters have to check whether the day’s payments are as expected. They also create balance sheet summaries or reports about the latest advance bookings or current room revenue.

High workload for electronic payment reconciliation

Due to the variety of revenue sources, the workload involved in matching electronic payments in hotels is even higher than in other industries. Despite this, transaction-accurate matching is definitely preferable to balance matching for hotel accounting. In any event, it’s certainly worth using smart software to automate the high manual workload involved in matching and posting payments.

High staff turnover

The fluctuation rate is often higher in the hotel industry than other sectors. This is partly because staff move into other positions internally. For the accounting managers in hotels, this means that they often have to find new professionals on the one hand – and, on the other, that they often have to train (new) colleagues.