A frequently asked question in the hospitality industry is what the accounting in hotels is and why is it important. The concept of accounting has been with us since the concept of money was established. It has been in the picture since the early civilization for maintaining the finances.
However, the concept of accounting was transformed by advancement of technology, intelligence and skill in the 21st century. Accounting is a system which can be customized according to the requirement and usage of the customers.
This article is focus on detailed understating on what is hotel accounting and its significance in the industry.
Accounting and the Significance in Hospitality Industry
Every business field, irrespective of the nature, size and industry needs a systemic accounting system to record, control and evaluate the finances of the company. The accounting system of the hotels or any business is highly significant and beneficial for its efficient working.
A well organized accounting system involves understanding the current company position, evaluating the variance, forecasting, budgeting, reporting and cost planning for future.
The accounting concept is a very wide concept in the business world. The hotel accounting doesn just involve the above mentioned processes it also involve every little detail of all the process involving cost or money. The processes like getting the bank accounts updated and in sync, balancing the payable and receivable, inventory control, analysing the working capital, etc all come under the accounting system.
Understanding the Accounting System in Operation
The accounting system of a hotel is responsible for providing and tracking invoices, recording sales, the occupancy rate, the food and beverage cost/ revenue, competition analysis, revenue tracker, etc. As there is a monetary cost and revenue in every business process, the hotel industry has all these in control with the accounting system.
Automating the Hotel Accounting
The digital era has made life comfortable with technological advancement. Many hotels have switched their manual accounting system with automated account systems. There are many accounting software that the companies can choose from depending upon their requirements and workings. The hotel accounting software helps in tracking the day to day financial activities of the hotel. All the opperationand processes can be controlled and keep track of by these softwares. The accounting softwares are very beneficial in minming error, time efficient and provides maximum degree of accuracy.
As we understand the automated accounting system more, we witness increased financial efficiency. Formulating accurate and detailed invoices in a timely fashion, keeping record of the advance received, keeping record of all the guests and their dues. ar collection software solve all the collection issues that the hotels come across.
Perks of having a Suitable Accounting Software:-
- Cost effective
With the help of suitable accounting software, the hotels can save allot of money by eliminating the extra labor cost, infrastructure, etc. All those eros committed through the manual accounting stem which would cost time and money to the hotel are also eliminated with the help of the softwares.
- Increasing Revenue
Most hotel business cripple down and shut down due to an unorganized accounting system. Having increased sales is not enough to run the hotel,working capital or cash-flow is needed to keep the business going. The disordered accounts receivable process caused due to delayed payments is the major reason of slowing down or even shutting down of the businesses. So it is highly important to focus on maintaining the cash- flow position of the hotel business.The issue of delayed payment can be solved easily with the help of suitable accounts receivable software. As the accounts receivables will be in order and payments will be received on time, then the revenues will increase.
- Enhance productivity
The amount of time and effort it takes to maintain the financial records manually cannot be estimated. With the help of appropriate software, the hotel management can focus on other factors and increase their productivity levels. All those areas which can help the business grow and expand can be paid attention to and proper policies and strategies can be formulated for the future revenues.
- Business trends
With the help and right usage of accounting software the hoteliers will have the opportunity to identity new trends, competitor’s strategies and growth prospects. This will get the business to reach new heights and achievement.
- Optimum accuracy
As it is a known fact that there is duplication and wastage of effort and work involved in the manual accounting or rather traditional accounting system of a hotel. Using the accounts receivable collection process hoteliers will be ahead of the game with their data having maximum degree of accuracy.
Therefore the above mentioned benefits are the few of many other benefits of investing in accounting software. The software like accounts payable software will help keep track of the expenses and help in cutting the extra cost. The receivable software will help in speeding the collection process. This way the business will be able to function smoothly. The accounting software will minimize the inconsistency and risk of downfall of the hotels by stabilizing the financial processes.
