Hotel Accounting Software - Illinois State Board Of Education
Hotel Accounting Software Unit: Workplace Skills Problem Area: Software Lesson: Hotel Accounting Software Student Learning Objectives. Instruction in this lesson should result in students achieving the following objectives: 1 2 Summarize hotel accounting terms, practices, and varying rates. Analyze specialized inventory and property management system software. Resources. The following resources may be useful in teaching this lesson: E-unit(s) corresponding to this lesson plan. CAERT, Inc. http://www.mycaert.com. “Hospitality Property Management Software,” Capterra. Accessed Apr. 18, 2018. gement-software/. “Hotel Management Software,” Software Advice. Accessed Apr. 18, 2018. https://www.softwareadvice.com/hotel-management/. “Industry Research: 2017 Restaurant Technology Study,” Hospitality Technology. Accessed Apr. 18, 2018. -RestaurantTechnology-Study109028. Landau, Candice. “The Seven Key Metrics Every Business Owner Should Monitor,” Bplans. Accessed Apr. 18, 2018. inessowner-monitor/. Taffer, Jon. “Managing The Big Three,” Nightclub & Bar. Accessed Apr. 18, 2018. hree. Terry, Lisa, Abigail Lorden, and Dorothy Creamer. “Six Mega-Trends in Hotel Technology,” Hospitality Technology. Accessed Apr. 18, 2018. http://hospitalitytechnology.edgl.com/ news/6-Mega-Trends-in-Hotel-Technology105033. Lesson: Hotel Accounting Software Page 1 u www.MyCAERT.com Copyright by CAERT, Inc. Reproduction by subscription only. L770055
Equipment, Tools, Supplies, and Facilities ü Overhead or PowerPoint projector ü Visual(s) from accompanying master(s) ü Copies of sample test, lab sheet(s), and/or other items designed for duplication ü Materials listed on duplicated items ü Computers with printers and Internet access ü Classroom resource and reference materials Key Terms. The following terms are presented in this lesson (shown in bold italics): central reservation system (CRS) corporate or commercial rate cost centers daily cycle group rate hospitality industry hospitality management accounting incentive rate inventory management point-of-sale (POS) system profit centers promotional rate property management system (PMS) rack rate room feature room rate categories seasonal cycle third-party booking uniform system of accounts weekly cycle Interest Approach. Use an interest approach that will prepare the students for the lesson. Teachers often develop approaches for their unique class and student situations. A possible approach is included here. The hospitality industry employs many individuals and relies on several accounting software tracking tools within each sub-industry (restaurant, hotel, club, spa, etc.). The hotel industry is unique in the number of cost and profit centers that are housed within one site. Cost centers include the front office, housekeeping, guest registration and services, security, rent or lease costs, utilities, and insurance. Profit centers include reservations, concierge services, communication, food and beverage sales, laundry services, the gift shop, Lesson: Hotel Accounting Software Page 2 u www.MyCAERT.com Copyright by CAERT, Inc. Reproduction by subscription only. L770055
recreational facilities, amusements, childcare services, and spa services. This lesson details the process to track each guest’s charges using accounting software packages. CONTENT SUMMARY AND TEACHING STRATEGIES Objective 1: Summarize hotel accounting terms, practices, and varying rates. Anticipated Problem: What are the common terms and practices for hotel accounting? What are examples of varying rates? What are typical hotel tax and fee calculations? I. The hospitality industry is a very broad subset of the service industry that includes two general sectors (food and accommodation services and arts, entertainment, and recreational activities). Because this industry focuses on customer satisfaction and leisure, these businesses are often providers of luxurious or specialty services bought with disposable income. When a business is a part of the hospitality industry, it is common to see cost centers associated with the various services provided by that business. The profit and loss (P&L) statements for these businesses are organized by cost and profit centers to monitor the cash inflow and outflow from various aspects of the operation. Within the hospitality industry are the hotel, travel and tourism, restaurant, and club industries. This lesson will focus on hotel management accounting. A. HOTEL AND HOSPITALITY ACCOUNTING STANDARDS: Hospitality management accounting is a collection of specialized systems, tax codes, and internal reporting for operations within the industry. Accountants in the hospitality industry follow the same rules as accountants in any other field; however, many hospitality companies require that management use specialized accounting procedures created by the associations related to specific industries. For hotel management accounting, there are systems, cycles, and centers of finance that must be included. 1. USALI: The uniform system of accounts is the agreed upon methods of recording financial transactions within a specific industry segment. The American Hotel & Lodging Association (AHLA) and the Hotel Association of New York City (HANYC) [with funding from the Hospitality Financial and Technology Professionals (HFTP)] publish the Uniform System of Accounts for the Lodging Industry (USALI). First published in 1926, this is the most used accounting reference guide for the hotel industry. It is now on its eleventh revised edition. Lesson: Hotel Accounting Software Page 3 u www.MyCAERT.com Copyright by CAERT, Inc. Reproduction by subscription only. L770055
2. Operating Cycles: Hospitality business operates on sales revenue cycles. a. The daily cycle is a breakdown of sales revenue for specific times of the day. (1) For a restaurant, this would be breakfast, lunch, and dinner. (2) For a hotel, most check-ins/check-outs, gift shop purchases, and other expenditures happen late in the morning or early in the evening. b. The weekly cycle is a breakdown of sales revenue for specific times of the week. (1) Business travelers typically use hospitality services (hotels, restaurants, and airlines) during the week. (2) Local community members are more likely to frequent restaurants and hotels on weekends. c. The seasonal cycle is a breakdown of sales revenue for specific times of the year. (1) This tool is used by businesses that have peak vacation periods due to location and climate. (2) Hotels use this to plan for weddings and annual conferences that occur during certain months of the year. (3) The hospitality industry would use this to plan for holiday activities. While most businesses are closed for holidays, the hospitality industry is at its busiest. 3. Cost Centers: Cost centers are areas within a business that do not create a profit, but are necessary expenditures for operation. Due to the different operational cycles, revenue can vary for every property at any given time. This requires management to make numerous daily, weekly, and seasonal decisions based on accurate financial account reporting. Because this is a disposable-income industry, hospitality is often the first to be impacted by any economic downturn. During slower sales periods, managers should monitor the performance of cost and profit centers. This is a common way to gain the information needed to make decisions regarding staffing, maintenance, and renovations. Hotel cost centers include: a. Front office b. Guest registration and services c. Security d. Housekeeping e. Property management f. Pool maintenance g. Utilities and mortgage/rental fees h. Payroll 4. Profit Centers: Profit centers are stand-alone services within the business that generate profits. They can support or cover cost-center expenses if kept profitable. Common profit centers in hotels include: a. Gift shops Lesson: Hotel Accounting Software Page 4 u www.MyCAERT.com Copyright by CAERT, Inc. Reproduction by subscription only. L770055
b. Restaurant and bar sales c. Concierge services d. Laundry services c. Spa services e. Event planning f. Amusements (golf, arcade, etc.) g. Child care services B. ROOM RATES: Room rate categories are the divisions of room sizes and features that affect the price. Per-room costs generally correspond to room size (standard, deluxe, or a suite), number of guests, holidays or special events, and market standards. Room rates and rate codes may also vary according to available room features. A room feature is an attribute or aspect of a room that includes size, location, and/or view. For example, a room facing the ocean is more expensive than a room with a street view. Hotel revenue computations can be complicated, because there is typically more than one rate code category for each room type. The following discounted and regular rate codes are standard throughout the industry. 1. The rack rate is the standard per-room charge defined by hotel management for a particular room category (standard, deluxe, suite). Some cities or states require this rate to be posted on the back of each hotel door to prevent price gouging. 2. A corporate or commercial rate is the special per-room charge for companies that frequently use the hotel to house their employees. This rate will vary based on business volume or a guaranteed number of company occupants. These are usually negotiated on a case-by-case basis. 3. A group rate is the special per-room charge for groups, wedding parties, meetings, and conventions that are using the hotel facilities. Typically, the hotel negotiates a contract with the group to “block” a specific number of rooms available for this group rate. A standard practice requires the group to guarantee a specific number of nights to secure the reduced rate. 4. A promotional rate is a per-room fee offered to guests during low occupancy periods to encourage bookings. 5. An incentive rate is a special per-room charge offered to associations, creditcard businesses, or other club members. For example, AARP or Visa cardholders may receive incentive rates based on membership or account activity. 6. Standard industry metrics, such as Occupancy Percentage, Revenue per Available Room (RevPAR), and Revenue per Cover, allow management to compare performance intervals, industry standards, and regional market rates. These comparisons can result in the need to change room rates to match the data. C. HOTEL TRANSACTIONS: A point-of-sale (POS) system is a computerized cash register system that accepts credit and debit payments from customers. Newer POS systems also track inventory; text or email receipts; and analyze customer Lesson: Hotel Accounting Software Page 5 u www.MyCAERT.com Copyright by CAERT, Inc. Reproduction by subscription only. L770055
and sales data. Hotels use specific reservation and property management systems that aid in the management of room fees and special taxes. 1. CRS: A central reservation system (CRS) is a program (or system of programs) used to manage hotel information, track room inventory, monitor room rates, and conduct service transactions. Specialized recreational facilities, such as those for a resort setting (golf, spa, tennis, etc.), require software that interprets and bills the guest or travel agency for provided services. Some reservation systems allow customers to make bookings online, while others use in-house reservation software. This software provides accounting reports that help management answer two daily questions. a. What is the maximum customer capacity and current occupancy of the facility? b. What is the correct number of employees needed for each shift? 2. Room Charges: Guest room charges (room service, movie rentals, or minibar purchases) require accurate accounting records. This would typically be a part of the CRS, but may involve specialized accounting software. 3. Taxes: Hotels often collect additional taxes from hotel guests assessed by the state or city in which they operate. This specialized tax code is a feature of most hotel accounting software. 4. Third-Party Booking: Mobile payment apps are becoming more and more popular for hotel guest reservations. Some third-party booking websites require hotels to track reservations and collect payment at a later date; however, most sites pay the hotel immediately through a preset credit account. Third-party booking occurs when an agency schedules reservations on behalf of hotels, and they usually collect the fees directly from the customer. These days, most bookings are made through websites. Listed below are many popular thirdparty booking websites. a. Hotels.com b. Booking.com c. Expedia d. trivago e. Priceline Teaching Strategy: Use VM–A and VM–B to lead a discussion about varying hotel room rates and third-party booking websites. Objective 2: Analyze specialized inventory and property management system software. Anticipated Problem: What is inventory management software? What is property management software? What are the features of each specialized software package? II. Hotel properties require specialized accounting software in order to track inventory and manage properties. Lesson: Hotel Accounting Software Page 6 u www.MyCAERT.com Copyright by CAERT, Inc. Reproduction by subscription only. L770055
A. INVENTORY MANAGEMENT: Inventory management is the tracking of room components, foodstuff, beverages, and other items in the hotel. Several tracking operations of inventory happen simultaneously, including sales through POS terminals, room service, and other items charged to the room (spa, restaurant, or other amenities). Inaccurately accounting for these items would result in revenue leakage, waste, and theft. Inventory management systems monitor supply and demand, planned expenses, and profit gains or losses. The type of chosen inventory software would depend on many factors, including guest volume, property size, number of properties managed, and the preferred format (web- or network-based programs). Inventory management software may also provide such information as: 1. Vendor Performance: With these programs, hotel managers can track the time and accuracy of deliveries. They can also track vendor cost increases. 2. Order Management: Automated order amounts, projected sales, and historical usage of an item are all features that help prevent overstocking and overspending. 3. Increased Efficiency: Inventory management software can maintain a database of all buying, selling, and consumption areas to pinpoint inefficiencies or potential fraud. (For example, a vodka bottle provides about 17 regular-sized vodka drinks. If there were only five vodka drinks reported from the time of the bottle purchase through the time of its replacement, then overpouring or theft has occurred.) B. PROPERTY MANAGEMENT: A property management system (PMS) is a comprehensive software package that manages the day-to-day requirements of running hotel properties. It was traditionally used to coordinate front office operations. Currently, a PMS integrates a CRS, third-party bookings, cost and profit center accounting, building maintenance, and account reporting. They can be on-premises or cloud-based systems. According to the Oracle website t-is-hotel-pms.html), PMS has grown to incorporate: 1. Food and beverage centers 2. Housekeeping and maintenance management 3. Sales and catering (especially group and event management functions) 4. Revenue management 5. Distribution across multiple channels (third-party booking, chain reservation systems, and the hotel website) 6. Spa management Teaching Strategy: Use VM–C to lead a discussion about specialty accounting software, including property management system software and its traditional and current uses. Assign LS–A to have students review hotel software packages. They will compare and contrast the features of two packages. Lesson: Hotel Accounting Software Page 7 u www.MyCAERT.com Copyright by CAERT, Inc. Reproduction by subscription only. L770055
Review/Summary. Use the student learning objectives to summarize the lesson. Have students explain the content associated with each objective. Student responses can be used in determining which objectives need to be reviewed or taught from a different angle. If a textbook is being used, questions at the ends of chapters may also be included in the Review/Summary. Application. Use the included visual master(s) and lab sheet(s) to apply the information presented in the lesson. Evaluation. Evaluation should focus on student achievement of the objectives for the lesson. Various techniques can be used, such as student performance on the application activities. A sample written test is provided. Answers to Sample Test: Part One: Matching 1. 2. 3. 4. 5. 6. 7. 8. a h g b c f d e Part Two: Completion 1. 2. 3. 4. 5. 6. Cost centers inventory management Third-party booking room feature uniform system of accounts seasonal cycle Part Three: Short Answer Answers will vary, but should contain four examples from each of the following cost and profit centers (eight total): Hotel cost centers include the front office, guest registration and services, security, housekeeping, property management, pool maintenance, utilities, payroll and mortgage/rental fees. Common profit centers in hotels include gift shops, restaurant and bar sales, concierge services, laundry services, spa services, event planning, childcare, and amusements (golf, arcade, etc.). Lesson: Hotel Accounting Software Page 8 u www.MyCAERT.com Copyright by CAERT, Inc. Reproduction by subscription only. L770055
Sample Test Name Hotel Accounting Software u Part One: Matching Instructions: Match the term with the correct definition. a. b. c. d. rack rate group rate room rate categories incentive rate code e. f. g. h. promotional rate code property management system (PMS) central reservation system (CRS) hospitality management accounting 1. The standard per-room charge defined by hotel management for a particular room category (sometimes cities or states require this to be posted) 2. A collection of specialized systems, tax codes, and internal reporting for operations within the industry 3. A program (or system of programs) used to manage hotel information, track room inventory, monitor room rates, and conduct service transactions 4. The special per-room charge for groups, meetings, wedding parties, and conventions that are using the hotel facilities 5. The divisions of room sizes and features that affect the price 6. A comprehensive software that manages the day-to-day requirements of running hotel properties 7. A per-room fee offered to guests during low occupancy periods to encourage bookings 8. A special per-room charge offered to associations, credit-card businesses, or other club members Lesson: Hotel Accounting Software Page 9 u www.MyCAERT.com Copyright by CAERT, Inc. Reproduction by subscription only. L770055
u Part Two: Completion Instructions: Provide the word or words to complete the following statements. 1. are areas within a business that do not create a profit, but are necessary expenditures for operation. 2. The tracking of room components, foodstuff, beverages, and other items in the hotel is called . 3. occurs when an agency schedules reservations on behalf of hotels, and they usually collect the fees directly from the customer. 4. An attribute or aspect of a room that includes size, location, and/or view is a/an . 5. The agreed upon methods of recording financial transactions within a specific industry segment is the . 6. A breakdown of sales revenue for specific times of the year (including holidays and peak vacation periods) is a/an . u Part Three: Short Answer Instructions: Answer the following. Name four cost centers and four profit centers of the hotel business. Lesson: Hotel Accounting Software Page 10 u www.MyCAERT.com Copyright by CAERT, Inc. Reproduction by subscription only. L770055
VM–A HOTEL ROOM RATES What impacts the price of a room? Based on what you know about hotel room rate categories and features, which one of the rooms pictured here costs the most? Which room pictured here could be a “deluxe” room? How do room features impact hotel management accounting? Lesson: Hotel Accounting Software Page 11 u www.MyCAERT.com Copyright by CAERT, Inc. Reproduction by subscription only. L770055
VM–B HOTEL BOOKING: MOBILE AND THIRD-PARTY Mobile payment apps are becoming more and more popular for hotel guest reservations. Some thirdparty booking websites require hotels to track reservations and collect payment at a later date; however, most sites pay the hotel immediately through a preset credit account. Third-party booking occurs when an agency schedules reservations on behalf of hotels, and they usually collect the fees directly from the customer. These days, most third-party booking is done on websites. What website do you use to book a hotel? Lesson: Hotel Accounting Software Page 12 u www.MyCAERT.com Copyright by CAERT, Inc. Reproduction by subscription only. L770055
VM–C PROPERTY MANAGEMENT SYSTEM SOFTWARE A property management system (PMS) is a comprehensive software package that manages the dayto-day requirements of running hotel properties. It was traditionally used to coordinate front office operations. Currently, a PMS integrates a CRS, third-party bookings, cost and profit center accounting, building maintenance, and account reporting. They can be on-premises or cloud-based systems. Lesson: Hotel Accounting Software Page 13 u www.MyCAERT.com Copyright by CAERT, Inc. Reproduction by subscription only. L770055
LS–A Name Review Hotel Management Software Purpose The purpose of this activity is to review hotel accounting management software packages for inventory and property management purposes. Objective After you select and review four software packages, write a one-page summary comparing and contrasting two of them. Materials t lab sheet t pen or pencil t device with Internet access Procedure 1. Access four popular hotel software packages. Read the reviews. The following websites may be used in your search. a. Software Advice: http://www.softwareadvice.com/hotel-management/ b. Capterra: ement-software/ c. Quora: best-values-for-reservations 2. Select four software packages to review. After reading reviews and offerings, find one that offers extensive inventory tracking and one that focuses more on property management. a. b. Lesson: Hotel Accounting Software Page 14 u www.MyCAERT.com Copyright by CAERT, Inc. Reproduction by subscription only. L770055
3. Compare and contrast the software packages by completing the table. What benefits are in the inventory-based program? How many areas of the business does the program cover? Would separate software be needed for reservations, profit centers, or web-based needs (website, third-party booking, etc.) or other hotel functions? Can you plan large events with this software? Are there ordering and receiving reports available? Marketing? Software Name Package Similarities Package Differences 4. Write a one-page summary of your findings that includes any user-review ratings, package details, costs, the completed table, and any other information about the software packages. 5. Report your findings to the class. 6. Follow the instructor’s directions concerning the turning in, emailing, or sharing of your completed lab sheet and summary. Lesson: Hotel Accounting Software Page 15 u www.MyCAERT.com Copyright by CAERT, Inc. Reproduction by subscription only. L770055
A. HOTEL AND HOSPITALITY ACCOUNTING STANDARDS: Hospitality management accounting is a collection of specialized systems, tax codes, and internal reporting for operations within the industry. Accountants in the hospitality industry follow the same rules as accountants in any other field; however, many hospitality
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FINANCIAL ACCOUNTING : MEANING, NATURE AND ROLE OF ACCOUNTING STRUCTURE 1.0 Objective 1.1 Introduction 1.2 Origin and Growth of Accounting 1.3 Meaning of Accounting 1.4 Distinction between Book-Keeping and Accounting 1.5 Distinction between Accounting and Accountancy 1.6 Nature of Accounting 1.7 Objectives of Accounting 1.8 Users of Accounting Information 1.9 Branches of Accounting 1.10 Role .
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Hotel Management Management and ownership are not the same thing Hotel Management is the day -to-day running of the hotel (also called hotel operation) One person (or company) can own the hotel, and another person (or company) can manage it. The owner can buy the hotel as an investment but not know anything about running a hotel
