When you think of the most important department in a hotel, accounting may not be the first one that comes to mind for many people. The truth is, however, a hotel or multiproperty hotel organization requires accurate data from its accounting systems to sustain its financial health and run efficiently, and that affects all of the other departments.

In 2024, global hotel market revenue is predicted to reach $446.40 billion (USD). That is a lot of revenue. For small properties or hotel companies with no more than three to four properties, their finance departments might be able to operate with tools like Microsoft Excel and QuickBooks. While those do offer ease of use and some good general functionality, they also require quite a bit of manual entry which can lead to a higher risk of human error, and they offer very little immediate customization to a hospitality organization and its unique demands, if any.

What hotel properties are finding is that they need a back office and accounting solution that integrates more easily with the other hotel systems in place and provides accurate operational information to the management team. By selecting solutions that are not only hotel specific but go beyond general accounting, they can operate their hotels more efficiently and provide more accurate data in real time to corporate management so they can effectively compare data across their properties.

Hotel-specific accounting solutions also incorporate the Uniform System of Accounts for the Lodging Industry (USALI) guidelines, which customizes and standardizes how accounting information or financial data is classified and reported for the hospitality industry in particular. For those organizations that want accurate budgets and forecasts, and more importantly, for those that want to grow, they must utilize a USALI-based or hotel-specific accounting system.

Where Generic Accounting Systems May Fall Short of a Hotel Organization's Needs

With more than a few properties, it becomes difficult and time consuming to look at the financial data for each property or group of properties every single day without having to wait to run certain processes. Something more powerful, like a hotel-specific solution can monitor these properties at a higher level, meet hospitality industry standards like USALI, and understand hospitality reporting. Hotels can build USALI-based reporting in QuickBooks, but it's time consuming and opens up a higher risk for human error. Additionally, tools like QuickBooks have a generic accounting structure that cannot properly support a hotel organization that is on a path of quick growth. Multiproperty organizations require accounting solutions that also provide operational information to more easily and effectively compare all of their properties.

QuickBooks and Microsoft Excel do not offer the seamless integrations that many hotel-specific solutions do, and they require that teams hand key entries and run multiple reports manually. Finance teams need to be able to review month-to-date numbers at a glance and compare if the property's performance was better or worse last Friday versus today. You cannot get that kind of breakdown automatically from programs like QuickBooks. The most effective finance directors who can best support their hotel properties with operational information in addition to accurate financial data need to be able to automatically calculate and review these numbers day by day and not wait until month end. Many of these teams using generic platforms spend far more time creating their reports than looking at them and more importantly, actually using them.

Why Some Hotels Struggle with Making the Leap to a Hotel-specific Accounting System

Change is the biggest concern for some finance teams. It's like replacing the furnace in your house or the transmission in your car – it's a big deal. Everything connects to accounting and when you change that you upset your normal process and way of thinking. The bottom line is it feels complex and overwhelming to many finance teams. The good news is it doesn't have to be. Many hotel-specific solutions offer seamless integrations to the other systems your team needs to access, and they use hospitality standards like USALI.

Many of today's accounting solutions built for hotel operations are very easy to use and require as little as a half day of training. Plus, they can help with the transition from a generic chart of accounts to a USALI-based chart of accounts. Once a hotelier is ready to make that upgrade, experienced providers with extensive hotel experience can easily help the finance department bring over that history and update it into a new hotel-specific platform. Once hoteliers make that jump, it will change how they do business.

How Hotel-specific Accounting Programs Give a Clearer Picture of Your Single Property's or Multiple Properties' Financial Health

Hotel finance teams will realize immediate benefits once they switch from managing accounting via generic platforms like QuickBooks or Excel to hotel-specific software. They can actually examine and analyze the data instead of spending so much time creating it. Learning how the property performed and where it could save money are just the tips of the iceberg. Without hotel-specific accounting programs, these teams are normally so busy gathering the numbers that they don't get a chance to review them properly – especially when they are under a time constraint to report what they have. The ability to actually look at the numbers from a hotel-based system and know they are accurate is a huge relief and offers the property the chance to optimize performance and improve its financial health.

While Excel spreadsheets and QuickBooks have their place and do a great job for many businesses with regard to certain tasks, the hotel industry requires accounting solutions that are more robust and intuitively know the hotel industry. You can't effectively run these complex, 24/7/365 operations and their multiple revenue streams with only spreadsheets. Hotel-specific solutions integrate seamlessly with other existing systems and allow property owners the ability to see real-time data across their portfolio and accurately compare their customized chart of accounts between properties. In addition, these solutions provide management with a direct view of operational data to better compare performance from multiple properties and better operate their hotels.

Finance directors and hotel owners need to know where the property or properties stand from a cash perspective, who they owe, how they are doing compared to a year ago, and what adjustments they may need to make. A hotel-specific accounting solution understands the myriad departments, revenue streams and systems that make up a hotel. Your accounting system must be able to interpret multiple data sources and automatically create accurate reporting in real time for management to clearly understand your property's financial health at a glance. Hotel-specific solutions allow them to make quick but educated decisions without having to manually run multiple reports. Listening to hotel owners and finance directors, you'll find they don't want fancy reports necessarily; they want quick but accurate numbers – how much money is in the bank, what is outstanding or owed, and how the properties are performing.

If you can't access solid data that offers accurate reporting and metrics, you can't make accurate forecasts, and you definitely cannot accurately evaluate your organization's financial health. A hotel-specific back office and accounting system allows your finance team to truly know how your hotel property is performing in real time – especially when they are examining accurate data each day and not solely at the end of the month. When your team has accurate metrics to review in real time, that results in more effective revenue management, budgeting and forecasting, and the ability to optimize financial performance.

Is your organization going to continue to use Excel or QuickBooks for budgets and hotel owner reporting? Have you had to manually rerun reports when something has to be updated or regenerated? Or are you going to adopt a solution that supports single and multiproperty hotel organizations and offers the functionality, automation, hotel-based standards and intuition to help your organization grow?