Operating a business that works to make profits involves much financial management. Being a hotel proprietor, you will encounter various financial management challenges due to the nature of the industry.
Every organization has to deal with tons of paperwork, from cash flow statements to yearly balance sheets. And well, maintaining consistency and accuracy in paperwork is one task; securing it is another.
Henceforth, adopting automation becomes necessary. You have to digitize your accounting and financial processes to bring precision, and one way of doing this is by using ERP accounting software. It is the best hotel choice, as it caters to all your industry-specific needs.
ERP for Financial Management
The ERP suite handles your business’s core functions with expertise. It helps plan, predicts, budget, and report your financial results without errors and delays. And that’s not all; it connects a multitude of processes and smoothens the flow of information across all departments.
Accounting ERP systems have become a need for businesses today. Here are a few features of the ERP that make it a handy tool for financial management.
- It enhances business insight using real-time data collected from reports.
- It results in reduced operational costs by streamlining business operations and implementing the best practices.
- It augments user collaboration by easing data sharing in contracts, purchase orders, and requisitions.
- It boosts efficiency by providing a standard user experience throughout your business processes and aptly defining each stage.
- It maintains a uniform infrastructure across all back and front office functions, ensuring standardization across all business activities.
- It offers increased user adoption rates by hosting a standard design and user experience.
- It mitigates the risks involved in your business by improving financial controls and data integrity.
- It reduces operational and management costs by integrating systems on a single platform.
The Various Challenges In Hotel-Specific Accounting
Every product and service has its upsides along with downsides. It’s safe to say nothing comes easy in the technological world. And so, here are a few of the financial challenges faced by the hotel industry and solved quickly by the ERP accounting system.
Financial Reports For Events
Most hotels arrange events within their premises from time to time. By doing so, you get to make hefty amounts of revenue and efficiently manage your expenses. These income and expenses might not be part of your day-to-day transactions, but they form a significant chunk of your financial statement now and then.
However, drawing a line between the revenue and expenses derived from events and those coming out of your daily financial activities is essential. It might be a challenging task to isolate both calculations, but there’s nothing technology can’t ease.
All you need is a mechanism that filters financial data extracted from the events, which leads us to ERP. Such software and its beneficial functionalities allow you to do so without difficulties. It enables you to categorize and group data using labels and tags.
You can tag transaction records differentiating the numbers resulting from the events and the figures derived from your everyday financial transactions. Moreover, you can generate profit and loss statements and more such financial reports from the filtered stats to have all the insights into your daily financial performance and that coming from the events.
Scalability
Perhaps, one of the most volatile industries to ever exist is the hospitality industry. It experiences seasonal peaks and dips throughout the year in occupancy rates, resulting in income fluctuations.
Due to these fluctuations, planning for expansion can get a bit complicated. When it comes to devising for growth during high-traffic seasons, you must have adequate capacity to manage the extra tasks and functions that arise with increased occupancy rates during peak seasons.
To scale your business, you will require software that scales effortlessly with your financial processes and is on demand. Without a doubt, cloud ERP software like NetSuite is one of the best options for you here. If you want to grow the count of hotels within your chain, be it locally or globally, ERP software is your pathway to success.
It supports all your essential functions alongside offering necessary features that support regional expansion, including the automatic elimination of intercompany dealings. It helps scale down the number of end users in your business, easing the heavy load on your budget.
Financial Consolidation
Looking after clusters of financial data in your hotel is challenging enough; you will be required to manage your finance function in a way that maintains data accuracy and authenticity. And, well, managing a global hotel chain will turn the complexity level even higher. It will demand integrating your hotel’s data collected from a plethora of activities in various countries.
Such a scenario will complicate your financial management considering currency exchange rates, laws and regulations, and tax jurisdictions. As a result, your business might fall prey to paralysis-by-analysis if you don’t deploy the right software for assistance with processing all this data.
Luckily, ERP software provides masterly solutions with its business intelligence (BI) alongside serving the handiest analytics tools. These options can standardize and generate valuable reports from a heavy data volume. Indeed, it will give you the insights needed to manage your processes more precisely.
Compliance with Global Accounting Standards
To keep your business safe from trouble at the hands of the law, complying with them must be on your priority list. It includes maintaining data governance along with regulatory compliance throughout your business procedures.
Moreover, the hotel industry and the laws governing it are incredibly volatile. You must ensure your team is on its toes with the latest changes, additions, and updates. At every point, your team must be prepared for all fluctuations in the accounting standards.
Compliance is a crucial part of your business, but it’s never too tough to handle successfully. All you need to do is nominate employees to keep up with compliance knowledge and partner with companies that deliver all this information. Furthermore, you can develop transparent processes to streamline and facilitate audit trails.
All these options will significantly help your business, but none is better than investing in ERP software. Automating this software will eliminate much hassle and chances of human error. It will make the necessary adjustments automatically.
The Final Conclusion
In the technology-led world, you have innovative solutions for every situation. And well, the hotel-specific challenges are being addressed by ERP with great expertise. You have all the help available regarding financial reports’ integration, consolidation, compliance, and your business scalability, with so much more you can learn with its implementation only!
Therefore, utilizing it for your business growth is the ideal option. You will experience a change for the better in no time and watch your business reach its pinnacle at a rapid pace!
