5 Reasons to Use Hotel Specific Accounting Software!
Why You Should Be Using Hotel Accounting Software
If you don’t do anything else to improve your financial process this year, I hope you’ll invest in a hotel specific accounting software!
The first step in making your Income Statement helpful to you in making decisions, is having all the pieces to the puzzle.
If you’re using Quickbooks, you are literally missing pieces from your box. The puzzle is never going to be complete.
Over the years we have helped many hoteliers make the switch from non-hotel specific accounting software (like QuickBooks) to an industry-specific software.
Most come to us because they already see the value in making the switch and they just need help to make it happen.
Others, however, aren’t sure if it’s worth the investment.
So today I want to walk you through some of the differences in a generic accounting software and something that is specific to the hotel industry.
Also, I should be clear, I’m assuming that you’re already using some sort of accounting software and not keeping all of your accounting records in excel spreadsheets. That might not be a fair assumption though because we have definitely had people come to us that have kept their books in spreadsheets for years.
So, I will actually say one thing about that.
No matter how meticulous you are about building your spreadsheets, and how careful you have been in building your process, there is still tremendous room for error and you will not ever be able to keep the detailed records that you need without a legitimate accounting software (whether it’s industry-specific or not).
Ok, so focusing specifically on whether or not to use hotel specific software, I will state it plainly because it will definitely be obvious where I stand: I think the benefits of hotel accounting software outweigh the cost by a long shot!!!
With that said, I will also mention a few things you can do to increase the value of your financials even if you aren’t ready to make the leap to hotel accounting software!
But these are the 5 biggest reasons that you should!
1. You should use hotel accounting software because the hotel chart of accounts is so unique.
The chart of accounts is the foundation of your accounting system, and the hotel chart is vastly different than other industries. Sure, you can import your hotel chart of accounts into QuickBooks, but hotel specific software is going to be built around a fully formed hotel chart of accounts for you. It will likely also have features that are already tied to specific accounts that are unique for hotels. Like the total number of rooms sold, and the calculation of your Guest Ledger day after day.
2. You should use hotel accounting software because the financial statements for hotels are so unique.
Similar to the chart of accounts, hotel specific software will likely come with standard USALI (Uniform System of Accounts for the Hotel Industry) financial statements. You need those monthly operating statements to evaluate the performance of your hotel(s).
You can write hotel industry financials in non-hotel specific software, it will just be on you to make that happen. AND there will be a few helpful software features that won’t be there to help you. Please hear me say this though,
IF you read all of this and are like “nah, I’m good in QuickBooks!” I understand it is a big deal to switch, and it’s ok to stick with what you’ve got for now, but please still build hotel specific financial statements anyways!
It will take a little more work, but you NEED good financial statements!
3. You should use hotel accounting software because of the hotel specific formulas.
Rooms sold. Occupancy. Average Daily Rate. Per Occupied Room Cost.
These are all very important analytics for evaluating your hotel’s performance. To learn more about hotel analytics, read this article.
They will be built into any modern hotel specific software that you use.
You can build these into your financial statements in a non-hotel specific software, but it will be a very manual and you will have to do it through workarounds.
4. You should use hotel accounting software because of the Bank Reconciliation.
A hotel’s bank reconciliation includes many more transactions than a lot of industries. It is important to keep the data tracked, organized, and reconciled. Hotel specific accounting software is built just for that and will have a specific area for completing all the bank reconciliations with hotel operations in mind. Keeping all that detail INSIDE the accounting system fosters accuracy and accountability. It’s also going to make keeping the proper documentation a breeze!
5. You should use hotel accounting software because of the Hotel Daily Report.
Monthly financial statements are crucial to a hotel, but performance is also evaluated DAILY. Only hotel specific software will have a built-in area for entering the daily PMS (Opera, OnQ, Fosse, etc) information, and this integration is also frequently automated with hotel specific software.
If you use a generic software, you would have to manually create a journal entry for all the PMS activity each day. Not only would that be extremely tedious and leave too much room for error, it also wouldn’t integrate with a daily report showing your daily analytics or link seamlessly with your bank reconciliation.
Those are the 5 biggest reasons to use hotel-specific accounting software!
Cloud-based hotel accounting software like Hotel Investor Apps will also provide real-time information so the team always knows where they stand, which is a huge perk! And they also include several automations that will increase your efficiency and add value to your financial statements.
The last thing I’ll say is it is important to realize that if your financial statements aren’t helping you make very specific, real-time business decisions to improve your hotel’s operations, then they are costing you money!
Before you switch to hotel specific software or make any other big investments in your accounting department, you need to truly accept and believe that accounting is not just an expense, it can and should create major costs savings for you! Or at the very least, help you stop bleeding money!
So your tip for the week is to get the most out of your financial statements by using hotel specific software!!!
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