Accounting is often a time-consuming process. Accounting for the hospitality industry, however, is uniquely complex. Unlike many businesses, running a hotel presents operators with daily revenue reconciliations, labor-heavy payroll, multiple operating departments, and strict compliance requirements. Even well-run operating groups can struggle to maintain their financial stability.

For many owners, the question isn’t whether accounting matters (they know it’s crucial), but rather how they can optimize the management of their books. Of course, it’s tough to find time for accounting when you’re also focused on creating memorable guest experiences. So how do you decide what type of hospitality accounting services are best for your organization?

This blog offers a decision framework that will help you determine what your accounting strategy looks like right now, and whether that model could benefit from a change in structure.

In-House vs Outsourced Hotel Accounting Decision Diagnostics

1. What Do Your Books Look Like?

If your hotel finance reporting arrives weeks late, decision-making becomes reactive instead of proactive. Late books also increase exposure to compliance issues, missed filings, and reporting errors that compound over time.

If your books are disorganized, late, or taking too many hours out of your budget, your accounting might have to change. Some benefits of utilizing outsourced accounting tools for hotels include:

• Timely daily, weekly, and monthly reporting
• Accurate revenue reconciliation across systems
• Built-in controls that reduce compliance and audit risk

Your hotel’s numbers are crucial when it comes to growth. Considering adding outsourced accounting services to your workflow can help you treat your numbers like you do your best guests.

3. Are Payroll and Labor Costs Eating into Your Budget?

As far as expenses go, payroll is likely one of the largest a hotel operator has to consider. When taking care of hourly staff, salaried managers, employee tips, and more, even the slightest of accounting errors can quickly begin to eat into your bottom line.

Examples of outsourced hospitality accounting benefits when it comes to payroll include: 

• Ensuring payroll accuracy
• Tracking labor costs by department
• Identifying inefficiencies before they affect margins

Through cleaner hospitality accounting, you can gain better visibility of your payroll to make more informed business decisions. 

5. Have You Lost a Bookkeeper in the Last 12 Months?

An unfortunate reality is that the hospitality industry sees an average turnover rate of 70-80% per year. This can make hospitality accounting a nightmare for business owners.

Outsourced accounting tools and services can help alleviate these pressures by providing:

• Process stability regardless of internal staffing changes
• Documented controls and standardized workflows
• No downtime, retraining, or knowledge gaps

Personnel changes will occur. Don’t let your accounting suffer as a result; instead, invest in tools and services that can help your business stay steady in the face of flux.

6. How Many Days Does Your Monthly Close Take?

How long does it take to reconcile your accounts at the end of a month? Outsourced hotel accounting tools help hoteliers track numbers consistently and accurately, meaning less work for your accounting team at the end of the month.

Is your monthly close taking longer than your deadlines allow? If so, you might want to consider investing in outsourced hospitality accounting services.

7. Is Your Business About to Go Through an Intense Period of Growth?

If expansion is on your mind, well-documented financials are a major step in the process. Many hotel owners don’t realize how much value is tied to reporting clarity when it comes to scaling their portfolio.

So, why should you potentially consider outsourced accounting when planning for growth? With the addition of outsourced hotel accounting solutions, you get:

• Standardized reporting across multiple properties
• Lender- and investor-ready financial statements
• Stronger positioning during valuation and due diligence

Without clear financials, your ability to protect your business during its growth stage can be impacted.

Comparison Table: In-House vs. Outsourced Hotel Accounting

To help you settle whether your company really should invest in outsourced hotel accounting tools or services, here’s a chart to help you reach a conclusion:

When In-House is Still the Right Answer

An in-house accounting model can be highly effective with experienced financial leadership, dependable processes, strong controls, and the right systems in place. It may be well suited to owner-operators who value direct oversight or groups with an established team. 

When your team consistently closes the books on schedule, produces accurate and timely reporting, and has the capacity to support the portfolio, outsourcing may not provide meaningful additional value.

If your in-house team is in search of tools or software to keep track of numbers with more ease, outsourced providers such as M3 offer AI-assisted accounting workflows, leveraging automation to bring your accounting into the modern era.

In-House Accounting Needs Help? Outsource Your Accounting to M3

Does your hospitality business’s accountant need an extra hand? M3 has helped hoteliers like you enjoy the benefits of outsourced hotel accounting services for over 12 years. Investing in outsourced accounting for hotels and tools to lift a burden off of your internal team leads to outcomes such as faster closes, cleaner owner reporting, and reduced risk during staff turnover.

To learn more about M3’s tools and outsourced accounting services, schedule a consultation with our team of hospitality professionals.

FAQs

Why is outsourcing accounting important in the hospitality industry?

The reality for many hotel portfolios is that their internal teams are stretched thin. Plus, experienced accountants can be tough to find, making it difficult to properly support day-to-day financial operations. Outsourced accounting supports timely, accurate reporting and allows teams to focus more on margins, staffing, and growth decisions.

What does “outsourced hotel accounting” include?

Examples of outsourced accounting in the hospitality industry include revenue reconciliation, payroll oversight, accounts payable, monthly close and reporting, system integrations, and financial analysis tailored to hotel operations and performance metrics. 

Will outsourced accounting still work with our systems (PMS, POS, payroll, banking)?

Yes! A benefit of outsourcing your hotel accounting services to M3 is the integration of your core systems.

When should a hotel outsource its accounting?

A hotel should consider outsourcing its accounting when the cost-benefit analysis of doing so makes sense. This will change frequently, so re-analyzing every quarter or so is often recommended. Consider variables such as the costs of in-house accounting, whether your company plans on growing its portfolio, and what monthly close processes look like.

What is the cost difference between in-house and outsourced hotel accounting?

The cost difference between in-house vs outsourced hotel accounting will vary business-to-business. For some, it will be cost-effective to invest in outsourced accounting solutions. For others, it makes more financial sense to keep accounting in-house for now.

Can outsourced accounting scale with a growing hotel portfolio?

Yes! As a matter of fact, we recommend outsourced accounting services even more to businesses that plan on growing their hotel portfolio.