Hotel Accounting

Like any company, accounting is a fundamental element to know its economic and financial
history as well as the information in the Financial Statements, fundamentally the Balance
Sheet, the profit and loss statement and the Cash Flow Statement. In the case of hotels, in
addition to maintaining consistent, reliable and timely accounting, it is essential to systematize
the costs of the different services offered.

The chief accountant is responsible for organizing, executing, supervising, controlling, and
coordinating the different activities that are related to the accounting process, the books,
financial statements and their link with the Payment or Treasury Departments or cash if these
units exist.
Importance of Hotel Accounting:

Hotel Accounting in the business context has the fundamental objective of providing all the
information required by each of the Company's departments, for example: restaurant, laundry,
lodging, wet areas, general services and administration, among others.
Recognizing that tourism activity involves the provision of services, the sale of finished
products, holding events of various kinds, cultural meetings, in addition to the marketing of
other accessory goods; It is necessary to have effective, immediate and timely information to
safely determine the sales prices of the goods and services offered to customers.
Hence the importance of having a well-organized Accounting Department that complies with all
legal requirements, as well as the requirements (reports, costs and budgets) of the
Administration. And for this purpose we cannot ignore the important work carried out by the
Costs and Budgets Department, in everything pertinent to the determination of unit and total
costs, so that the Marketing and Sales Department, adjusted to the Company's policies,
Determine retail prices.

Description of the activities of a hotel:

 The services provided by hotels can be classified as:
A) Main.
B) Secondary.
Among the main ones are: lodging, restaurant, bar.
The secondary ones are: dry cleaning, laundry, telephones, parking, hairdresser, etc.,
everything that makes the visitor's stay more comfortable.

Characteristics of Hotel Accounting:

 The special characteristic in hotel

accounting constitutes the opportunity with which accounting accounts must be managed,
taking into consideration that the services provided by the hotel have a “speed” style, and in
this period it will be necessary to record accounting with the opportunity due.

 The use of so-called specialized journals, such as purchasing, sales, cash, warehouses, is a
particular characteristic in hotels, even applying the columnar modality, because it allows the
accounts to be correlated with the departments respectively that generate costs; sales, cash
receipts and outflows, requisition of food, beverages, materials, etc.
 Hotel Activity being a branch of the “Services” sector, two main aspects are distinguished in
hotel accounting. Costs of each service; and income from services.

 Accounting systems in hotel activities adjust to their own characteristics and nature, depending
on the organization and services that the hotel has.

 Once the type of organization, its areas, departments and services have been identified,
accounting must be designed based on the distribution, to the service department that
generates it, since each department generates costs, however, not all departments generate
income. such is the case of the administrative area.

 The molecular support of hotel accounting is given by the precision of the costs and income
attributable to each department, rooms, dining room, bar-restaurant, drinks, washing and
ironing clothes, casino, swimming pool, sports fields, etc. according to availability. of each
hotel.

 The general journal absorbs the summary of the specialized journals and other transactions not
included in them, achieving consolidation from both the general journal and the specialized
journals.

 Other accounts used in hotels are not different from other types of businesses, such as staff
remuneration, accounts payable, loans, depreciation, amortization, expenses, deferred, etc.
and have a general treatment such as in other activities.
 Hotel Organization Chart:

Sources of Income and Their Accounting:

 To account for the income received by the hotel for the provision of services, it is first necessary
to differentiate them by main area, in such a way as to facilitate the recognition of each service.
The fact of distributing the income by each main service not only allows quantification for each
item but also allows the identification of the importance of each service with respect to the total
income. It also constitutes a fundamental element for budget programming for each financial
year.
 In a hotel there are several sources of income, the main ones are rooms, dining room, bar-
restaurant, another complementary source of washing and ironing clothes, casino, conference
rooms, hairdresser, etc. Depending on the category to which the hotel belongs.

 The first information captured in the hotel upon guest arrival is the guest registry. Cards are
used that include the name, identity card, origin, destination, number of people and signature of
the person assuming the room.

 Room rental constitutes a main item of a hotel's income; it is necessary to keep guest arrival
cards updated and record the days of stay. So that when the guest decides to leave the hotel,
this information must be ready to issue the corresponding account and invoice.

 In the room cards, also called room books or room charges, the number of people who have
registered their admission per room is recorded. An interchangeable card is opened so that the
occupied rooms and existing vacancies are always known when guests leave the hotel.

Hotel Categories:
2.3 MAIN OPERATIONS, ADMINISTRATIVE CONTROL AND ACCOUNTING
RECORD
MAIN OPERATIONS, ADMINISTRATIVE CONTROL AND ACCOUNTING RECORD

LODGING:

The lodging operation begins when a reservation is received at the hotel. The future guest's data is
noted on the Reservation Sheet, once it has been previously verified if there are rooms available on
the required date. At the end of the day, the reservation sheets are registered in the Reservations
Concentration of the Day. It is important that once the hotel has accepted the reservation, a deposit
corresponding to the amount of one night is required.

RECORD:
When the guest shows up at the hotel, they must write down their details on a registration card
provided at the hotel reception. 4 copies must be made to send to: the occupancy board, telephone
switchboard, clothing department and the information board.

The purpose of this record is:

 Visually know which rooms are occupied and which are vacant.
 Possess guest data and, if necessary, give information to third parties.
 Answer calls received or requested by guests.
 To verify the cleanliness and order of the occupied room through the housekeeper in her
daily checks.

OPENING OF ACCOUNT STATEMENT.

Immediately after registration, the corresponding Account Statement must be opened in which all
the services consumed by the guest, day, cost, room and the balance carried will be noted; It must
be numbered, and it is desirable that it coincides with that of the registration card and that it
contains the tax requirements.

CLEANING AND SUPERVISION OF ROOMS.

HOUSEKEEPER'S REPORT

Daily, the clothing department must carry out a physical verification of the occupied rooms to attend
to the cleaning services of the room, make beds, provide clean towels, accessories, check the
consumption of the servi-bar, report any failure in the facilities and it will be the responsibility of
chambermaids and housekeepers prepare a report.

The original must be sent to the reception office and the copy to the accounting department.

ROOM OCCUPANCY REPORT.

The reception will prepare a report noting the number of occupied, empty, out of service, courtesy
rooms, the number of people and room cost. You will send the original to the management and the
copy along with the night auditor report, the accounting department for verification and recording.
FOOD AND DRINKS:

The restaurant service provided by hotels is made up of two sections: the kitchen and the dining
room.

THE KITCHEN.

The costs and expenses of food preparation are controlled and determined.

DINING ROOM.

Income from the sale of food is controlled and quantified.

FOOD EXPENSES AND COSTS.

The most important kitchen expenses and costs are made up of food, there are those that easily
decompose or perishable and those that are durable. The perishables are charged directly to the
cost of sales and the others are taken to a warehouse and then with exit vouchers are taken to the
same cost account.
INCOME.

THE COMMAND.

The control is carried out by means of an order, a list where what is consumed by the guest is
written without prices, numbered, which must be issued in 3 points, the original will be sent to the
head chef so that the food can be prepared, the next to the cashier to formulate the check account
and the other to the checker, who supervises the preparation of the formulated foods.

CHECKING ACCOUNT.

With the copy of the order, the cashier will formulate the check account, which is a note where the
consumption is written with amounts and it will be noted in the daily sales report.

The report, once totaled, is sent to the accounting department along with the envelope containing
the cash cut or cashier report.

OTHER SERVICES.

Secondary services such as laundry, dry cleaning, telephones, etc. They must be recorded in
special notes that will be detailed according to their nature. These notes are concentrated in a daily
report for each service.

ACCOUNTING RECORD:
There are various cases for the accounting record of hotel operations, the first case derives from
the formation of the lodging rate; where this is made up of: Room rent, the corresponding Value
Added Tax and the local Lodging Tax, according to the rates established in the Income Laws of
each Federal Entity.

PUBLIC RATE OF A HOTEL

IN NAYARIT

DAILY RATE 833.00

Room Rental 700.00

YO. V. TO. (16%) 112.00

Lodging Tax (3%) 21.00

Where the Room Rent is a Creditor Income Account, and the other two are Current Liabilities.

When a cash deposit is requested to guarantee the reservation, another Current Liability account
called “Guest Balance” is involved, leaving the record as follows:
 Deposit Registration

Box 500.00

Guests 500.00

In all cases, it is convenient to manage the corresponding room numbers as subaccounts.

Another situation is that a reservation is made via telephone, fax or Internet, depositing the
corresponding rate into account, leaving it as follows:

Reservation with Advance Payment

Account Has to To have

Banks 2,499.00

Room Rental 2,100.00

YO. V. TO. (15%) 336.00

Lodging Tax (3%) 63.00

Finally, it is possible to book through Travel Agencies, companies that are paid a commission for
the service:

Reservation by Travel Agency

Account Has to To have

Customers 2,450.28

Room Rental 2,100.00

YO. V. TO. 336.00

Lodging Tax (3%) 63.00

Agency Commission 42.00

VAT Creditable (By the commission) 6.72

Equal sums: 2,499.00 2,499.00

When the Travel Agency Pays

 Account Has to To have

Banks 2,450.28

Customers 2,450.28

Equal sums: 2,450.28 2,450.28

The Housekeeping Department also generates accounting movements derived from the Cleaning
and Supervision function; These are generally due to Servibar consumption and possibly due to
shortages of white goods attributable to the guest.

Housekeeper Fees

Account Has to To have

Guests 870.00

Servibar Consumption 250.00

Missing Targets 500.00

YO. V. To Transferred 120.00

Equal sums: 870.00 870.00

Consumption is also made in restaurants, bars and additional services such as laundry, dry
cleaning and telephone services; to which it is possible to add tips, which must be distributed
according to their nature.

Miscellaneous Consumption Charges

Account Has to To have

Guests 1,378.80

Restaurant La Palapa 280.00

Bar El Trago 360.00

Dry cleaner 150.00

Telephone service 60.00

 Cafe El Descanso 80.00

YO. V. To Transferred 148.80

Tips 300.00

Equal sums: 1,378.80 1,378.80

SUPPORTING DOCUMENTS AND ACCOUNTANTS

Supporting documents are those that serve as a basis for verification in the preparation of an
accounted document, such as: orders, delivery notes, invoices, receipts, vouchers, payroll, daily
occupancy report, daily summary of food and beverage sales , daily dry cleaning report, daily report
of merchandise received, bank deposit sheets, list of collectors, list of cash remittances, bank
notices of charges and credits, reports from departmental tellers, reports from reception tellers,
notes of departure or requisitions warehouse etc.

SALES INCOME POLICIES

This document will be formulated based on the following daily reports:

 Room occupancy
 Food and beverage sales
 Dry Cleaning Diary
 phones
 Laundry
 Readable for use by the night auditor
PURCHASE POLICIES

It will be prepared based on the daily report of warehouse entries, which will be made according to
the shipments and invoices. Purchases of food and beverages, general supplies and other items
detailing the names of suppliers for purchases made on credit and in cash, in order to make the
corresponding annotations in the auxiliaries

BANK DEPOSIT INCOME POLICY

Its basis of preparation will be the daily report of the general cashier, which details all the cash
receipt operations that occurred in one day.

EXPENSE POLICY AND CHECK POLICY

It will be issued in regularly larger payments, according to the amount established by each
company.
A copy of the so-called check policy will be used as an accounting document, which is recorded
daily in strict numbered order in the journal of expenditures of checks issued.

MISCELLANEOUS OPERATIONS POLICY

 It will be issued for provision for payment of payroll, fees, salaries, etc.
 Provision for payment of taxes, duties and public services, etc.
 Due to adjustments, transfers, etc.
ACCOUNTS RECEIVABLE POLICY

It will be formulated to record credit sales. Its source of origin is the list of accounts receivable
prepared by the night auditor, according to the supporting documentation signed by clients or
guests and other reports provided by the different productive departments such as restaurants,
bars, telephones, laundry, dry cleaning and others. .

ADJUSTMENTS AND DISCOUNTS POLICY

It will be formulated when adjustments are made to rooms due to rate modifications or discounts on
food, beverages, dry cleaning, laundry, telephones, telegraphs, parking, etc.

COST POLICY

It is prepared every end of the month based on the determination of the following food and drink
data.
 Total sales
 Adjustments and discounts
 List of amenities to sales price
 List of consumption checks for officials and employees signed at the sales price
 Initial inventory amount
 Net purchase amount
 Gross cost of sales
 Apparent cost of sales
 List of final inventories duly valued
 Amount of deductions to the gross cost of sales to employees, sales to employees,
transfers between restaurants and bars, guest courtesy, breakages and losses to cost.
 Net cost of sales
 Net cost of sales factors, in relation to net sales.

BOOKS AND RECORDS

THE MAIN ONES ARE:
Elderly
General diary
Minute book
Sales Income Journal
Accounts Receivable Journal
Shopping diary
Journal of expenses or issued checks
Journal of income or deposits to the bank
Diary of various operations
Warehouse release journal

CHARACTERISTIC OPERATIONS IN THE HOTELS

The hotel accounting system has defined characteristics in its operation that distinguish it from
other businesses, since in this type of industry, income control is exercised mainly through:

 Reception cash registers

 Cash registers by department
 Immediate preparation of charge notes for other services that produce income
Keys to Hotel Accounting
by Juan Antonio González

Due to the services provided by tourism companies, hotel accounting has many
elements that differ from other types of companies and that determine the way their
accounting records are prepared.

Index
Features of hotel accounting
Income in the hotel sector
Firstly, most hotels and travel agencies do not stock production but are dedicated to
providing services to their customers rather than selling products.

Therefore, their main income comes from what they bill their clients for
accommodation, restaurants, bars, etc.
Secondary income complements the hotel's main activity and therefore represents
a lower volume of its turnover. We can highlight income from telephone use,
laundry, parking, sports facilities or gym.
Another type of income that hotel companies receive is from rentals, whether from
stores located within the hotel establishment or from clients who rent rooms to hold
conferences, seminars and the like.
In the case of a hotel chain that manages or franchises another, it would also
obtain income from these management contracts or from a franchise contract.
On many occasions, travel agencies act as intermediaries between the hotel and
the client. Two circumstances can occur:
1. That the hotel charges directly to the traveler who has previously booked the
travel agency. In this case, the agency will be entitled to its intermediation
commission.
2. That the traveler has paid directly at the travel agency for their stay, with
which the hotel bills said agency and deducts the corresponding commission.
Expenses in hotel accounting
Expenses for purchasing supplies can be classified into different accounts to have
the most organized accounting:
 Food shopping.
 Beverage purchases.
 Fuel purchases.
Commissions to travel agencies for intermediation will be recorded in the
corresponding expense account. For example, "commissions to travel agencies."
Hotels whose business model is franchising will have to record the expense for the
franchise fee .
Sometimes this fee has a fixed component and another variable that depends, for
example, on the occupation, so two accounts would be created for each concept.

Because the production of a hotel is labor-intensive, an important part of its

expenses is made up of salaries and wages.
The reservations that customers make to travel agencies are not recorded as
customer advances but as deposits received in the short term (liabilities).
In fact, one of the mistakes that many travel agencies make is to call these deposits,
which the Travel Agency Regulations specifically call deposits , as amounts on
account.
This difference is important because a delivery on account (customer advance) does
accrue VAT and generates the obligation to pay the tax at the time said concept is
collected.

Differentiating aspects of the Balance Sheet in the

hotel sector

With respect to the company in general, the

balance sheet of a hotel presents certain differences such as those detailed below:
The existences
In travel agencies, stocks are not abundant and at most they have office and
advertising materials. In hotels we find a greater variety such as drinks, food,
cleaning products, room items or fuel.

The clients
The problem of customer balance is very varied in hotel accounting. Collection
expectations for operations that constitute the company's main activity are
recorded in Client accounts.
On the other hand, collection expectations for operations that do not form the main
activity of the hotel are included in Debtors accounts.
The Fixed Asset
In hotel accounting, a very characteristic asset is crockery, linen, glassware, etc.
There are different options regarding its accounting and amortization. There are
even those who do not treat it as if they were immobilized and count it as an
expense for the year.

In any case, their stay in the hotel is usually longer than a year, so they should be
treated as fixed assets and not as expenses.

As far as travel agencies are concerned, their fixed assets represent a very small
percentage of their total assets.

One element that can be highlighted is the payment of the initial franchise fee,
which must be recorded as an intangible asset.
Hotel Accounting in the business context has the fundamental objective of
providing all the information required by each of the Companies' departments,
such as: restaurant, laundry, lodging, wet area, general services and
administration, among others. It deals with the control, management and
recording of income, costs, and expenses of a hotel based on generally
accepted accounting principles and standards. It tries to provide accurate
information in order to serve as a tool and guide for decision-making and future
projections.

The general objective is to analyze the cost, management and registration of

income, costs and expenses to provide accurate information about the operation
of a hotel. Interpret financial statements for decision making based on the
company's objectives.

Tourist activity involves the provision of services, the sale of products, holding
events of various kinds, cultural meetings, as well as the marketing of other
accessory goods; It is necessary to have effective, immediate and timely
information to safely determine the sales prices of the goods and services
offered to customers.

Hence the importance of having a well-organized Accounting Department that

meets all legal requirements, as well as the requirements (reports, costs and
budgets) of Administration.

Hotel accounting currently covers various sectors of a country's economy,

precisely due to the tourism boom in all national and international regions;
Today, not only are traditional sites visited, but new spaces have been opened
as a source of income and sustenance for different communities.

The hotel accounting system has defined characteristics in its operation that
distinguish it from other businesses, since in this type of industry, income control
is exercised mainly through: reception cash registers, departmental cash
registers, processing immediate release of charge notes for other income-
producing services.