Luca Pacioli, the Franciscan friar and mathematician who created double-entry bookkeeping, said, “Frequent accounting makes for long friendships”. And this saying is equally as important in the 21st century as it was back in 1493.
If you’re looking to run a successful hotel or guesthouse, it is vital that your finances are properly monitored and controlled – and that applies whether you are a small Guest House or a large hotel. Poor financial management is a major factor of failure. And the best way to avoid financial failure is to have an up-to-date view of your accounts, your business information and the health of your hotel company.
How do you do this in the most cost-effective and efficient way? By moving your hotel business finances to the new breed of cloud accounting system and giving yourself the financial overview you need to stay profitable.
A regular monthly view of your finances
As the hotel owner or business manager, you need to know what is going on in your hotel business. And third parties like banks, financiers and investors will all look more positively on your businesses if you can demonstrate that you have your finger firmly on the financial pulse.
“Gosh”, you might groan, “producing financial data every quarter for VAT returns is bad enough never mind more often!” But, in reality, for certain areas of your hotel business you do need financial data more often than once a month.
The key is to have a finance system in place that gives you instant access to the business information you need, whenever you need it – it is no good producing financial data and long-winded accounts that are not going to be used.
Having the right finance systems in place
Saints Tourism & Leisure will help you devise a system that delivers the financial data you need when you need it – and we will show you how to produce these reports and get the best possible efficiencies from your finances.
For example, it is far easier to pay suppliers on a specified date once a month than on an ad-hoc basis. It is also cheaper and easier to pay staff monthly rather than weekly – effort is expended 12 times a year instead of 52 times!
Historically, hotel employees have enjoyed being paid weekly – so moving to a monthly salary could be resisted. But our Tourism & Leisure team have strategies to help your hotel make a smooth transition from weekly to monthly payroll, all with minimum impact and resistance from your staff.
A daily overview of your important financial elements
You might baulk at the idea of looking at your accounts every month. But there are some financial elements that will need a weekly, if not a daily, overview if you want to truly be in control of the business.
Just a small example of these would include:
- Your current cash flow situation.
- The balance in your business bank account.
- Your sales levels across the hotel.
- Your occupancy levels as they stand today.
- Key performance indicators (KPIs) such as gross profit margins, revenue per room, occupancy levels etc.
So, how do you ensure you have this daily information in a timely and effective way?
Having a robust accounting system is a fundamental part of this, as well having tight financial controls in place to track and monitor your performance. And the software tools to do this are available right now.
With advances in technology and the reduced costs of programs and apps, software-driven accounting systems are now well within the financial reach of smaller independent hotels and guesthouse operators.
Cloud accounting is the future
The future of accounting lies in ‘the Cloud’. With the right cloud accounting software in place, your bank transactions can be streamed directly from your bank into your accounting system on a daily basis – giving you the real-time view you need.
How does this integration between bank and accounts help you?
- To begin with, you always know exactly what you have in your bank account.
- Sales can be accounted for daily or downloaded from a hotel booking system.
- Purchases can be entered on a regular basis.
- You have a totally current view of your profit and loss.
In this way, you will be able to see what is coming into the business, what is going out, as well as all the financial commitments the business has to meet at month end.
Xero online accounting is your perfect financial foundation
Having looked at the various cloud accounting systems on the market, our Tourism & Leisure team would recommend Xero online accounting as the best fit for your hotel or guesthouse business – but we are also happy to support any recognised system.
Xero is designed from the ground up for business owners:
- As an accounting system, it is easy to use and quick to learn.
- You can view your Xero accounts from your mobile smartphone or tablet.
- You have a clear dashboard showing all those important daily financial metrics.
- There is a wonderfully diverse ecosystem of apps and plug-in business tools that integrate with your Xero system to make running your hotel easier.
- As subscription-based cloud software, Xero is highly cost-effective.
Talk to us about a Xero demo for your hotel or guesthouse
Xero provides you with all the financial information you need, in real-time. And, at the same time, you can produce the data needed for your quarterly VAT accounting and those all-important annual accounts for the taxman.
Financial management just got easier and cheaper, so jump on board!
If you want to improve control of your hotel finances, please do come and talk to the Saint Tourism & Leisure.
Contact Saints Tourism & Leisure to book your Xero demo and find out just how easy your hotel finances will be using cloud accounting.