3 Hotel Accounting Procedures to Know in 2023 and Beyond

3 Hotel Accounting Procedures to Know in 2023 and Beyond
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The hotel industry is one of the most lucrative niches of the hospitality vertical. In fact, hotels in the US alone generate $200 billion in revenue annually. That’s a lot of money to process via bookkeeping activities. The errors an accountant can make can potentially lead to devastating consequences.

It simply means that the accounting department has to be at its best game 24/7/365. And to do it, they need to know all about hotel accounting procedures.

Below you will be able to discover the hotel accounting procedures and the most important ones to know, including when and how to use them.

What are the hotel accounting procedures?

To understand hotel accounting, you first need to understand accounting as a process. It refers to a wide range of actions for recording financial business transactions. Accounting is essential for cost planning, measuring financial performance, and decision-making

What is hotel accounting, then?

Accounting processes are different across all businesses. Some businesses can have similar accounting procedures, but they often have a few things in common, such as the industry, the market, and core business processes, which brings us to hotel accounting procedures. 

Hotel accounting procedures are standardized processes accounting departments use to perform their functions. Now that you understand this concept, let’s look at the most crucial accounting procedures in hotels.

List of the most important accounting procedures

While every hotel is unique in terms of service quality, amenities offered, possible room upgrades, and look and feel of the accommodation. There is one thing that brings all hotels together – accounting. If you are a hotel owner or manager, or you are an accountant interested in looking for a job in the niche, you should know the following most important hotel accounting procedures.

Financial reporting

Financial reporting is the first accounting procedure on our list because it’s vital for the success of your operation. Not to mention that hotels in many countries are legally required to deliver financial reports before outline deadlines. It’s sort of an accounting standard across verticals.

When it is used

Hotels produce financial reports regularly. Hotel owners, managers, and shareholders request monthly financial reports to assess the hotel’s financial performance. It provides them with actionable insight and enables them to act accordingly if they notice some inconsistencies or underperformance.

How to do it

The financial report includes various reports such as cash flow, P&L, and the balance sheet. It often includes historical data to enable decision-makers to compare financial performance between the current and previous periods. Many hotels streamline this process using digital accounting platforms.


As a perfect example, we have a hotel development and management company in charge of 24 properties in Delaware. They use daily sales, vendor bills, payment tracking, and account receivables management payables automation solutions paired with budgeting, general ledgers, and financial reporting to standardize and streamline reporting across all properties. 

The result? On-demand and real-time visibility of financial performance and no delays in payment processing.

Payroll processing

Payroll processing is a practice of keeping track of all times worked for all employees to produce paychecks accurately. When is it used?

When it is used

Well, payroll processing is one of those ongoing processes. The accounting department often has to track the times worked per employee over the month. Every country is specific in terms of labor law and payment coefficients. However, generally speaking, payroll processing is an ongoing process that produces paychecks regularly, weekly, biweekly, or monthly.

How to do it

It’s 2023, and many hotels have switched to digital accounting solutions, as did the companies that offer accounting services. Simply put, to do it accurately and efficiently, you must reduce manual and repetitive tasks and use relevant software or third-party services.


After expansion, MGM Resorts’ workforce has reached a whopping 62,000 employees. The company had problems meeting the complex scheduling and payroll requirements. 

They also found it extremely challenging to support compliance with all rules and regulations to avoid penalties and expensive lawsuits. Adopting only one solution enabled MGM Resorts to get real-time visibility into the workplace and employee data and, most importantly, automate payroll and reduce payroll errors.

Front office accounting

Front office accounting is the pillar of hotel accounting procedures as it tracks, records, and stores all accounting-relevant data, including transactions of the businesses, agencies, guests, and non-guests using the hotel’s facilities and services.

When it is used

The front office account is also an ongoing process. Every time a consumer, whether an individual or business, spends money at a hotel, the front office has to record it and pass it down to the accounting department.

How to do it

Given that the front office accounting cycle is complex, the best way to do it nowadays is to use relevant software solutions and technologies. Software solutions include front desk management and tech-based solutions such as POS terminals. 


An excellent example of this accounting process is one of Magic Crest Hotel’s practices. The hotel had problems maintaining unique reference codes attached to every guest and non-guest transaction, which caused further problems down the pipeline. 

Implementing the front desk accounting system enabled the hotel to solve the “unique reference codes” problem and automate all manual and repetitive front desk accounting processes, thus giving the staff more time to focus on delivering a great experience to guests.


Hotel accounting is one of the essential processes in a hotel of any size. It encompasses various processes, including financial reporting, payroll processing, and front-office accounting. 

As you can see, each of these hotel accounting procedures is unique regarding the type of work and challenges. Hopefully, the examples we’ve shared with you will help you better understand hotel accounting and how to overcome potential problems down the line.

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Graduated from Standford University, Arielle has over 5 years of experience in the Hospitality industry. She holds an MBA in business administration from the IDC Herzliya, Israel. She currently works as Account Manager at UpStay, building and maintaining strong, long-lasting customer relationships. She is deeply passionate about helping hoteliers unlock significant new revenue streams from unsold premium inventory.


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