Accounting in hospitality industry plays an extremely important role for recording the business’s financial transactions. Without it, the financial health of your business cannot be known – In other way it’s a life blood for your smoother business operations.
Accounting was created in the medieval times as an answer for the growth and development of commerce and travel, but since then over the years it’s being active in various other industries.
Especially when it comes to hotels, accounting becomes pivotal as it involves various facets and compilations of financial statements.
Practicing systematic maintenance of financial records, summarizing them will eventually help a hotelier like you to plan budgets and save money for business expansions.
Even to ascertain your profits, accounting becomes a must. So, without it your business ship will sail without a radar, tossing direction-less.
In your everyday life, hotel accounting chart of accounts if streamlined and consolidated at one place with a hawk-eye view, your business will run efficiently and bottom line will grow & flourish.
In general, the chart of accounts in hotel accounting refers to what your business is making or spending money and the main types of account include Revenue, Expenses, Equity and Liabilities.
What’s the importance of chart of accounts?
In this contemporary business sector, the hospitality industry is expanding rapidly and it becomes manage to organize chart of account accurately department-wise.
Like a map, you need to have accounts named as per the nature of your business, and they are to be memorized, laid out on your glance.
Mapping the right chart of your business accounts with respective financial parts manually may prone to errors, but with a well-designed and automated hotel accounting software – it makes easy to configure right and accurate.
It should let you make better decisions, give you an accurate snapshot of your company’s financial health, and make it easier to follow financial reporting standards.
Emphasis of ACCOUNTING in Managers Perspective
Accounting lets hotel managers plan operations, control activities and make better decisions to maximize the revenue, while controlling costs.
It unleashes great opportunity to them in planning and monitoring own budgets, key performance metrics (Occupancy %, RevPAR, ADR), performance comparisons, cash flows, analysing costs and most importantly, determining the financial success of hotel portfolio.
The three key financial documents, every hotel manager along with accounting staff affords to invest in are income statement, balance sheet and cash flow statement.
Improving managers productivity and efficiency also depends on how well hotel accounting standards are maintained. Besides managers, accounts department in hotel industry feel intimidating during the manual process of tracking daily sales, occupancy monitoring, reviewing GSS and STR, of all properties at one place.
Particularly the night audit report consumes enormous amount of efforts in dealing with hotel finances. Hotel Accounting Software like Nimble here can seamlessly integrate with your PMS and fetches all the hotel portfolio’s daily sales, receivables and statistical data into one consolidated system automatically.
Bank balances of hotel group can be viewed at one place, budgets can be managed effortlessly, expenses and revenues of future can be forecasted seamlessly and financial records can be retrieved during the taxation season.
Thus, offering from accounting for hospitality managers is boundless.
ACCOUNTING is rewarding for HOTELIERS for sure
Accounting in hospitality has a great significance amongst hoteliers because it enables them to gain deep insights into their financial happenings.
The real-time financial reporting keeps them regularly updated on what’s going on with their businesses, which ultimately helps the take best decisions ever and achieve great outcomes.
Nimble Property dashboard has 9 most essential KPI widgets, which will help hoteliers like you to access your entire business health of all properties, lets you generate inter-company and combined reports.
1. Operations Widget: Here, you can monitor all your operations related information and updates, starting from checks to be printed, sales & journals to be approved, recurring dues, Paid Bills, Banking Summary and Bills to be Approved – Your entire portfolio on a single screen.
2. Performance Overview: Mousing over on the performance widget, you can visualize all you hotel chain KPIs, including occupancy percentage, sold rooms, RevPAR, ADR, Room Revenue and Overall Revenue – Everything at one place at a glance.
3. Department Wise Income: The strategically designed Nimble’s dashboard enables maximum effectiveness, by letting your better envision and analyse department-wise income, expenses and revenue, as per the time periods set – Drill down deep into the statements.
4. P & L Widget: Stay aligned with goals you focus, gain insightful Profit and Loss details of your hotel portfolio on a single dashboard.
Corporation/Brand wise, view and summarize your Income, Expenses, COS, Net Profit and other Miscellaneous Expenses.
5. AR & AP Aging Widgets: Enriched dashboard of Nimble displays all your properties’ payables and receivables aging summary, so you can act quickly on them to avoid cash flow breakdowns and bottlenecks.
6. STR & GSS: When it comes to hotel industry, the main objectives of hotel accounting involves with competitor outperforming and improved guest satisfaction. Software like Nimble, let’s you import STR and GSS data directly into Nimble and gain insights on your competitive sets, key performing areas and financial statistics.
While, on the other hand you will get to know the pulse of your guests by accessing property-wise key drivers, guest comments and benchmarking information.
Both in basic hotel and restaurant accounting, the hotel management accounts format and restaurant way of doing accounting will be almost the same, just that the chart of accounts differ and behavioural of business slightly change.
Behind every successful hotel business is an impeccable hotel accounting partner. Hope, you got the answer if you destined to find the role accounting plays in the hospitality and tourism industry as well as its importance.
Above and beyond, accounting in hotel industry is also for accountants and there are host of responsibilities like delivering month-on-month account statements accurately, preparing balance sheets, cash flow statements, comparing profits, and all this is cumbersome process without reliable Hotel Accounting Software.
Ready to leverage the technology and make the best use of accounting – Take a FREE demo today!