For many hotel owners and managers, hotel back office software is just another piece of technology. Sometimes, back office bookkeeping is simply an Excel spreadsheet or a family friend. But here’s the thing: Your hotel’s accounting system isn’t just bookkeeping; it’s the command center of your business. It deserves an investment proportional to the return it can drive when properly sourced, integrated, and utilized.
Many of today’s hotels manage accounting with spreadsheets, basic bookkeeping tools, or systems that were never designed for hospitality in the first place. While these approaches may work early on in the lifespan of your business, they tend to break down as operations become more complex. The right hotel accounting software will offer capabilities that most generic systems simply can’t support, and very often these capabilities become crucial components to your company’s long-term success.
So, how can your hotel find the right solution? In this guide, we’ll break down the biggest factors to consider when choosing hotel accounting software.
Evaluation Criteria for Hotel Accounting Software
If you’ve decided to search for an accounting system for your hotel, or have found a possible contender already, what features should you ensure the platform offers?
Hospitality Specificity
This is the number one, most overarching criterion you should look for in an accounting system for hotels. Is your current or prospective software specific to the hospitality industry? How about hotel management? If not, you might be leaving serious money on the table, either in the form of errors or time wasted.
Lots of general accounting software isn’t built for the specificity and evolving metrics crucial to success in the hospitality management industry. Features such as apartment-level reporting break down income and expenses by rooms, food and beverage, events, and other outlets, making it clear which areas are driving profitability and which need attention.
Going even further, generic hotel accounting software offers equally generic templates for your COA. With the right software, however, customizable functionality allows revenue and expenses to align with your specific outlets, services, and day-to-day operations.
Automation Capabilities
These days, there’s no excuse for hotel accounting software not having automation capabilities. Repetitive tasks such as data entry, property onboarding, and system configuration should be seamless.
Additionally, automation reduces errors and time spent on crucial elements of reporting, including recurring journal entries for payroll accruals, revenue adjustments, and prepaid expenses. Automating these entries eliminates repetitive manual work while maintaining clear audit trails. This is especially important during busy periods or staffing transitions.
Implementation and Support
When it comes to implementing a new hotel accounting software, there’s a lot that goes into adding something as far-reaching as this into your tech stack. If implementation is going to take ages, it could end up not being worth it to take on a new accounting software at all.
Make sure you invest in a solution that has an implementation process that won’t put your business in the dark for an indeterminate amount of time. Implementation processes substantially benefit from offerings such as excellent customer support, accurate historical data transfer, and flexible accounting setups based on the growth cycle of your hotel and company.
Integration Depth
It is important to have software that integrates seamlessly with your existing software systems; otherwise, a lack of communication between platforms could cause duplicate data entry, incorrect metric tracking, or time wasted on manually performing tasks that could otherwise be automated.
Accounting platforms that offer benefits such as 60+ integrations take a massive weight off your shoulders to build custom integrations or switch to different platforms. Even better, some hotel accounting software accepts any system with an API. Finally, ensuring that these integrations are deep is important as well, as extent, complexity, and feature-richness are crucial components of tech stack integration that must be translated across systems to avoid incorrect reporting and numbers.
Reporting and Business Intelligence
Your hotel bookkeeping software should maintain detailed audit trails, proper accrual handling, and clear documentation across systems to ensure strong compliance, especially because industry regulations are so strict.
The accuracy offered by cloud-based hotel accounting software is nothing short of a game-changer for audit season. Features like direct connection to a PMS and night audits provide daily financial snapshots, allowing operators to spot revenue gaps, cost spikes, or posting errors before they turn into month-end surprises.
Additionally, hotels need to plan around seasonality, staffing shifts, and demand fluctuations. Built-in budgeting and forecasting tools allow operators to compare actual performance against projections without exporting data to generic platforms. Hotel accounting software that offers built-in reconciliation tools helps match deposits, payouts, and expenses directly to your books, reducing errors and saving hours each month.
Multi-Property Capabilities and Scalability
Look for software that can handle multi-property capabilities seamlessly. Even if you only have one property in your current portfolio, software with the ability to scale across multiple properties will set your portfolio up for growth.
Imagine if you invested in a new hotel accounting software that couldn’t handle the functionality required for multi-property, and a few months later, your company had an opportunity to acquire another property. That would leave you and your team scrambling to find new hotel back office software at the same time as adding a property to your portfolio.
For owners who have multiple properties already, software that’s built for more expansive portfolios allows owners and operators to consolidate reporting, compare performance across locations, and maintain consistent structures without duplicating effort. Without these offerings, growth often leads to fragmented and unreliable financials.
Outsourced Accounting Offerings
If you have a small team or are handling hotel accounting solo, investing in an accounting offering that comes with services such as professional accountants with industry experience can be a complete game-changer. Try finding a solution that is staffed by accounting experts who specialize in hospitality, giving context to numbers in addition to tracking and recording them.
Questions to Ask in Your Demo
- Is your software built to handle multiple properties? Can it scale if we acquire more properties?
- What are the automation capabilities of your platform, and how do these functions help reduce errors and improve time management?
- On average, how long does implementation take?
- What integrations does your software offer?
- What business intelligence tools does your platform offer? Are they hospitality industry-specific?
- Does your company offer outsourced accounting offerings or support?
Hotel Accounting Software Red Flags
On the flip side, here’s what you should avoid when choosing your hotel’s back office accounting software.
No Departmental Reporting
Tracking expenses and revenue across hotel departments helps management companies understand which elements of their hotels are making money, and where revenue can be improved. If a hotel accounting platform doesn’t offer a department-by-department breakdown, there’s a better software fit out there for your company.
No PMS Integration
Your hotel likely runs on many independent systems, including PMS, banks, procurement, workflows, payment processing, and more. It’s crucial that your hotel accounting software can create an ecosystem that integrates all of these key systems rather than working separately from them.
No USALI Alignment
USALI alignment is crucial because it standardizes complicated and unique hotel financial reporting. This allows hoteliers to accurately benchmark performance while also enhancing operational transparency
No Daily Revenue Capture
Having an idea of a property’s daily revenue flow is an extremely important metric in the hotel business. If your current or prospective hotel accounting software doesn’t track this metric, your business is losing out on a crucial business metric.
The Bottom Line
Above all else, utilizing an optimized hotel back office accounting software creates consistency. Instead of relying on individual staff members to remember processes or make judgment calls, hotel accounting software standardizes how revenue is recorded, expenses are categorized, and reports are produced. This leads to cleaner books, faster closes, and financials that can be trusted month after month.
If your current accounting system makes life harder, it’s time for a change. At M3, our software and fully outsourced accounting services were built by hoteliers, developing alongside the hotel management industry for over two decades. Whether you’re looking to automate parts of your accounting or remove bookkeeping from your plate entirely, our experts help you worry less about the numbers and more about your guests.
With over 60 integrations, multi-property scalability, hospitality metric-specific tracking, and ease-of-use, M3 is trusted by thousands of management groups. If you’re currently going through a hotel accounting software comparison, schedule a demo today to see how M3 stands out from the rest of the market.
FAQs
What software do hotels use for accounting?
Today’s hoteliers use a mix of accounting systems for their hotels, ranging from generic tools to fully automated, cloud-based hotel accounting software programs. The best systems integrate with PMS and payroll systems to manage daily revenue, labor complexity, and department-level reporting more effectively.
What features should hotel accounting software include?
The most important features of hotel accounting software include department-level reporting, daily revenue snapshots, customizable charts of accounts, and multi-property hotel accounting capabilities.
How does hotel-specific accounting software differ from generic platforms?
The best hotel accounting software tracks metrics specific to the hotel industry, such as GOP, RevPAR, NOI, and GOPPAR.
What should growing hotel groups look for in accounting software?
The first offering a growing hotel group should look for in their prospective hotel accounting software is multi-property capability and scalability to handle tracking the metrics of a growing number of properties.
