There are also many important factors and considerations within the accounting for hotels. We often encounter control weaknesses and in particular a lack of understanding of the balance sheet within hotel management accounts, including:
- Reconciliation of guest ledger, corporate ledger and deposits to the Property Management System ("PMS").
- Understanding the recoverability of the debtors within the PMS.
- Reconciling credit card receipts that have not yet cleared the bank – is this itemised by the last few days of credit cards un-cleared?
- Recording of stock.
- Understanding of prepayments and accruals, which can have a significant impact on profit and the timing of cash payments.
- Reconciling the payroll liabilities to the current month payroll.
- Reconciling the VAT outstanding.
We also encounter weaknesses surrounding the controls over cash and stock, the risk of leakage can be significantly reduced with enhanced controls in this area.
We can provide a finance health check, reviewing the financial controls in place and reviewing the quality of the management information prepared, including balance sheet reconciliations.