How To Streamline Your Hotel Bookkeeping With Automation
by Jacob Statler
What do you want your hotel to be known for?
- Excellent guest service?
- Five-star dining?
- Family fun?
Whatever your goals are for your hotel’s rep, a solid back-office operation is what’ll get you there.
You can leave ♥ heart-shaped chocolates on your guests’ pillows or offer freshly made Boysenberry syrup for their morning waffles, but if your bookkeeping isn’t up to par, your operation will have a tragically short life.
Hold your horses. Tragedy doesn’t have to strike your beloved hotel. Not if you take action to streamline your hotel bookkeeping with automation.
Let’s open the floodgates on all things hotel bookkeeping. What is it? How can yours be better? We’ll cover:
- What makes hotel bookkeeping so important
- 11 basic hotel bookkeeping tasks
- The challenges of hotel bookkeeping
- 6 Benefits of automating hotel bookkeeping
- Hotel bookkeeping doesn’t have to be daunting
What is hotel bookkeeping, and why is it important?
Hotel bookkeeping involves recording your hotel’s daily sales, invoices, and expenses. Hotel bookkeeping also includes GL (General Ledger) coding, which is crucial for tracking transactions to later be organized into the financial statements (i.e., Cash Flow and Income Statements, and Balance Sheets).
Those financial statements are the only concrete way you’ll get the lowdown on your hotel’s financial operation.
Other duties that fall under hotel bookkeeping are preparing night audits and monitoring the health of your hotel’s finances.
Your hotel bookkeeping is of UTMOST importance because the financial health and the success of your hotel’s operation (which makes for happy guests) rely on 3 things:
- Accurate records
- Sufficient cash flow
- On-time vendor payments
If you don’t have those 3 things buttoned up, your hotel will be dead in the water in no time flat.
11 Basic hotel bookkeeping tasks
Now that you’ve got the skinny on hotel bookkeeping and why it deserves some serious respect, let’s cover 11 basic tasks that must be done to stay on top of your hotel accounting books.
A word to the wise, here — many bookkeeping tasks can be automated, saving time and moolah. Automation reduces human error while boosting the efficiency of your hotel’s accounting workflow.
A stellar AP automation software solution like Plate IQ can regulate many of the bookkeeping tasks listed below, and have your accounting staff whistling a happy tune.
Here’s what your hotel’s bookkeeping duties should entail:
- Daily account management
Hotel bookkeeping is ongoing (or never-ending, depending on your perspective) because hotels are open 24/7, 365 days a year. Hotel accountant staff simply MUST reconcile, post, and report financial activity on the daily.
If all financial transactions aren’t reconciled daily, they create serious reporting and oversight issues, not to mention T-R-O-U-B-L-E.
- Manage mail/emails
If you haven’t jumped on the automated AP bandwagon yet, your bookkeeper spends a significant amount of time wading through daily mail and emails. Any accounting-related mail or email needs to be properly sorted. This includes bank and credit card statements, invoices, etc.
On the flip side, if you’ve digitized and automated your accounting operations, this bookkeeping time-sink is almost non-existent.
- Keep an eye on the legal stuff
Received a letter from IRS? Maybe a new tax amendment has just been created? Your hotel bookkeeper needs to stay in the know about all legal aspects of business management to keep your operation legit and out of hot water.
Bookkeeping duties in this area include making sure state and city taxes collected from food and beverage, parking sales, permits, and beyond, are paid on time to avoid penalties.
- Invoice management
Bank deposits and writing off receivables against relevant invoices are at the top of your bookkeepers’ to-do lists. From bank deposits to bill receivables to tracking and coding expense invoices, your hotel bookkeeper has to manage all financial transactions carefully.
Typically, hotel AP invoices are paid weekly, so your bookkeeper needs to understand your hotel’s cash flow to effectively batch-pay invoices.
- Books, record-keeping, and organization
A hotel bookkeeper is responsible for staying organized with budgeting, checkbooks, purchase orders, and approval processes. This is key to keeping clean hotel accounting books. Filing and archiving important files and documents—both digitally and physically—is a vital bookkeeping chore.
It’s important to stay on top of vendor statements and payments as well as bank and credit card statement reconciliation, for accurate end-of-the-month reporting.
- Honor the closing schedule
Each hotel has a predetermined closing schedule. It’s essential that all financial transactions are recorded in the month they occur. Otherwise, accurate end-of-month reporting is impossible.
- Tax prep
Your bookkeeper is responsible for noting all relevant tax dates and preparing your hotel accounting books before tax season gets going. In addition, your bookkeeper needs to be available to provide any necessary information and support to your accountants, auditors, and other tax experts.
AP automation supports this step by making digitized documents easily accessible.
Your hotel bookkeeper should regularly communicate with all your hotel department heads. Part of a bookkeeper’s job is checking in on budgets and expenditures while also ensuring proper use of your hotel systems (PMS, POS, central reservations, valet service, concierge, food & beverage, reporting financial system, etc.) and honoring SOPs.
Keeping open the lines of communication across departments, while important to your operation, can be a drain on your bookkeeper’s time. Automating your accounting helps keep this step efficient.
- Maintain security
A hotel bookkeeper must maintain principles of cybersecurity in your hotel operation to protect against fraud, including guarding passwords, updating antivirus software, and restricting unauthorized access to hotel bank and credit card info.
- Payroll management
Your hotel bookkeeper coordinates with your HR department to prepare and update payroll accounts for each hotel employee. While payroll might be done only once a month, payroll accounts have to be tallied throughout the month so your hotel staff can get paid on time.
- Accounts payable management
Recording accounts payable entries into accounting software, properly coding, requesting invoice approvals, processing payments on time, reconciling accounts payable, aging analysis, and more—all of this is managed by your bookkeepers.
The good news, however, is that this huge job can mostly be automated. Hotels use automation solutions like Plate IQ to streamline their accounts payable workflow and exponentially increase efficiency.
The challenges of hotel bookkeeping
Your hotel has a myriad of moving parts that together make up your hotel’s operation. The hospitality industry is unique, with challenges that don’t crop up in other industries. (Need to switch up your shower cap supplier, for example? Not an issue for retailers.) Your hotel’s bookkeeping is much the same, and there are specific challenges that you should be aware of.
High employee turnover
According to a 2020 study from Johnson & Wales University, the hospitality industry turnover rate is DOUBLE the national average of all other industries. Hospitality leads the nation in turnover rates.
A high employee turnover rate comes with the challenge of having to constantly train new employees on your systems. Proper training comes with a learning curve that can slow your bookkeeping workflow to a crawl.
Because hotels are a revolving door when it comes to staff, they’re especially susceptible to fraud. Dealing with fraud is a hotel bookkeeper’s worst nightmare, because it is incredibly time-consuming.
Too many systems
Hotels usually use three to five systems when handling POS, payroll, reservations, food & beverage, valet, hotel inventory, etc. How well these systems communicate with each other dictates your hotel’s bookkeeping workflow.
Many hotels hang on to outdated systems that don’t integrate, just because it’s what they’ve always done. Hotel bookkeepers may spend an enormous amount of time toggling from system to system, re-entering data, simply because your hotel’s systems can’t talk to one another. It’s inefficient and a huge waste of time.
Workflow Tip ✦ Put the the time and effort into making darn sure your employees are well-trained to use your systems, and that your hotel has clear SOPs (standard operating procedures) for all processes.
Hotels that still rely on manually-entered data are fraught with errors and shockingly slow. Manual hotel bookkeeping involves multiple steps and depends on lots of humans doing their part in the process.
For example, a housekeeping invoice that was manually entered with errors causes the invoicing process to screech to a halt because numbers don’t match, and your hotel bookkeeper has to backtrack , scouring that invoice for the error.
Unfortunately, many hotels don’t invest enough money for proper employee training, mainly due to their whopping turnover rate. When a large number of poorly-trained employees are using your hotel systems, the room for error swells out of control.
Handling all the hotel bookkeeping duties can be a daunting challenge when employees don’t use your systems correctly. When inaccurate or incomplete data lands on your bookkeeper’s desk, another time-sink is created.
Night audit personnel
This position is critical and challenging. It’s a hard position to fill because it’s overnight — it’s tough to find highly qualified candidates willing to work the graveyard shift. The night auditor is responsible for reconciling the day, running the daily audit, and flipping the date.
Without a stellar night auditor, it’s a challenge to stay on top of your hotel’s books.
Plate IQ was built for the hospitality industry, with its challenges in mind. Streamline your bookkeeping tasks and conquer your workflow through Plate IQ’s automation software.
6 Benefits of automating hotel bookkeeping
Automated hotel bookkeeping comes with a host of benefits for your hotel. Automation is innovative and points your hotel toward scalability and future success. Check out these 6 benefits of automating hotel bookkeeping:
- Set your GM free from the manual grind
Your GM has a hefty responsibility load without adding manual invoice handling and processing. Automating your hotel bookkeeping allows for uploading paper and electronic invoices in bulk. Or simply eliminate most paper invoices by receiving invoices directly within your AP automation software.
- Streamline employee training
You already know that the hospitality industry has a huge turnover rate. This means a steady stream of new employees that require training. Automation within your hotel accounting software means less turnover in the bookkeeping department because many of those tasks are now automated and department heads’ invoice management is simplified with digitized invoice processing.
- Invoice automation revolutionizes invoice processing
Do you have multiple properties with mountains of invoices and a slew of different departments? Plate IQ supports a multi-property chart of accounts, automatically applying the right GL codes to every invoice based on which property and department it belongs to. Can you imagine the time and cost automating this task will save for your hotel accounting department?
- Boost the efficiency of your hotel bookkeeping
Automating most bookkeeping tasks boosts the efficiency of the entire hotel accounting process. Tasks are completed faster and with more accuracy than manual bookkeeping. Matching invoices to receipts, routing invoices to the right person for approval, and GL-coding all done automatically will make your hotel bookkeeping uber efficient.
- Split your spending automatically
Do you have invoices that need to be allocated to more than one department? An automated solution like Plate IQ allows you to split any item between departments, properties, or corporate-level designations to prepare your invoices for seamless export to your accounting software.
Splitting spending can be gut-wrenching if done manually. Automating this task speeds up the process and ensures accuracy.
- Scrap document storage
Once you automate many of your hotel bookkeeping tasks, your documents are then stored digitally. Your hotel bookkeeper, once responsible for handling and storing all paper invoices and receipts, can focus on the overall system management and operation.
You won’t have to allocate some dark, dusty room in the basement to be filled with filing cabinets overstuffed with paper.
- Increase oversight
Automation increases your ability to gain a birds-eye view of your hotel operation and compare multi-properties to one another in a few button clicks. If you’re part of a multi-property hotel management group, a top goal is to standardize operating costs and be able to compare properties apples to apples, right?
An automated solution like Plate IQ makes putting together benchmark reports a breeze.
Hotel bookkeeping doesn’t have to be daunting
Your hotel bookkeeping is a crucial part of making certain your hotel stays running smoothly. There’s a lot riding on maintaining a stellar hotel accounting system.
Sure, the responsibilities that fall on the shoulders of hotel bookkeepers are heavy, but the job needn’t be daunting. Implementing automation is a forward-thinking move that will help your bookkeepers thrive.
Plate IQ gets you and the needs of your hotel. Lighten your bookkeeper’s load by taking advantage of their cutting-edge technology.
Jacob Statler writes about the unique challenges of hospitality AP automation for Plate IQ.
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