Those of us in the hotel accounting industry know not to bother a hotel accounting team before the 15th of the month, while they are busy doing month-end close. That is because closing monthly books can be a time-consuming and detailed process. Any delays can also frustrate upper management as they impatiently wait for financial reports. Afterall, timely financial data is the crux of well-informed management decisions. 

Troublingly, one survey by the Journal of Accountancy reported that 87% of finance professionals said they worked overtime during the monthly financial close process. In addition, many of the respondents said they don’t have full trust in the accuracy of their reported numbers. 

It doesn’t have to be this way. Modern technology, particularly an advanced ERP system, like Hotel Investor Apps (HIA), the only full ERP designed specifically for hotels, offer powerful solutions to streamline and automate many of the time-consuming manual processes which contribute to stressful month-end closing. By leveraging automations and tools, hotel management companies can significantly reduce the time and effort required to close their books each month. 

Read: Deciding Between Hotel Accounting Software or a Hotel ERP? The Key Differences You Need to Know.

Here are a few ways that modern technology, including Hotel Investor Apps ERP & Accounting Software (HIA), can speed up the month-end close:

1. Automated Journal Entry from PMS and POS

The daily load of manually posting journal entries from your PMS, POS, and payroll systems can compound and time constraints may lead your department to post to a clearing account for future research. This can cause delays in providing pertinent information to operations and management teams and create a rush at month-end. 

The solution: An automated integration between your PMS and POS systems and your ERP system which automatically imports daily transactions and creates the journal entry directly in your general ledger (GL). Not only does this eliminate manual entry, but also saves time correcting errors and duplicate entries. 

In HIA, it is easy to identify errors and correct the corresponding journal entry from the same screen. Plus, instead of painstakingly reviewing each hotel daily report, any discrepancies can be automatically flagged as out-of-balance, so that new revenue codes can be corrected quickly, ensuring that financial records are accurate and up-to-date. 

2. Automated Payroll Data Entry

Payroll management can be a daunting task for a hospitality business, especially as some businesses move towards daily pay for certain job roles. Manually entering payroll data can result in errors and delays and added strain on the month-end closing process. 

Alternatively, when you integrate your payroll system with an Enterprise Resource Planning (ERP) software, like HIA, you can save hours of time with automated payroll general ledger postings, and a centralized data hub for time tracking, cost codes and project/ job costing. 

 3. AP Automation

Another problem which can cause headaches during month-end close are errors made during coding, entry, or approval of invoices. This is especially true when companies are reliant on paper invoices which move from desk to desk during the approval process, and then must be tracked down at the end of the month. 

To avoid errors in coding and missing or duplicate AP entries, as well as facilitate a quicker month-end close, consider an integrated AP Automation software with your ERP. With integrated AP Automation software, invoices are consolidated and digitized for the portfolio, and are then scanned and coded directly to the GL, along with an attachment of the original scan. AP approvals are handled within the ERP system thus streamlining the entire AP process for more accurate financials and smoother month-end close. 

Read: Why AP Automation is a Must for Hotels

4. Smart Bank Reconciliation

Doing bank reconciliations is a critical measure to ensure accurate financial records and potential fraud quickly, but when bank reconciliations are performed manually it can be a challenge to keep up with, and it adds to the month-end load. 

Modern technology can use AI and algorithms to automatically match bank transactions, such as HIA’s smart match technology which allows you to customize matching criteria. Additionally, HIA’s BankConnect automatically imports bank transactions, saving any manual export and importing of bank statements. Combined, users can cut down time spent on bank reconciliation by over half. With the streamlined process, it becomes a quick job to do bank recs daily,  making it much easier to reconcile accounts daily, saving time at the end of the month and getting reports out faster. 

5. Easy Reclassification

In accounting, sometimes the small things add up to big time savings. If your hotel accounting software does not have the ability to easily reclassify transactions, then you may have elaborate spreadsheets to make sure that your data is entered correctly before it is posted to the general ledger. But spreadsheets and the process of reversing, voiding, and adding new entries costs valuable time, which adds up at month-end. 

HIA’s modern ERP is designed for flexibility with a simple “Reclassify” button to quickly and easily reclassify GL codes, the date of a transaction, the description, or even the hotel property. The system will auto-suggest matching accounts, or type in the correct account. The same process is used to split a transaction into two accounts, with the system automatically creating the journal entry for the new transaction. These features are especially helpful during month-end review. 

Watch Video: Reclassify Transactions in Hotel Accounting Software

6. Approval Workflows and Mobile Notifications

Manual approvals for purchase orders, expense reports, or vendor invoices can be inefficient and prone to errors and inconsistencies. Bottlenecks can delay month-end close when accountants are waiting for approval and return of documents from departmental managers. 

Automated approval workflows in an ERP streamline the approval process and reduce bottlenecks and delays. Managers are alerted to pending approvals through notifications and task management tools, including personalized dashboards. 

Additionally, HIA for example, has a full functionality mobile application so approvals can happen on-the-go anywhere. Tiered approval structures and automated escalation keep the process moving if the approval sits too long with one user. Handling all approvals within the ERP also maintains comprehensive audit trails, as well as attached documents, for full transparency. Streamlined transaction approval workflows in an ERP system can significantly increase the efficiency of the month-end close process. 

7. Intercompany Accounting

Managing a hotel portfolio brings the unique challenge of managing the financial relationship between multiple hotels and the management organization. It is important that all transactions between entities be tracked and recorded for accurate and transparent financials, but it can be a time-consuming process fraught with potential for errors when intercompany transactions are recorded manually. It also creates more work at month-end when you have to manually reconcile the intercompany balances. 

Advanced intercompany accounting functionality eliminates manual intercompany journal entries by automatically creating the “due to” and “due from” saving time and streamlining intercompany account reconciliation. In HIA it is also easy to get consolidated financial statements for a full picture of the management business. 

8. Streamlined Closing Process

With an ERP, skip the checklist and use customized workflows to standardize the closing process, ensuring that all necessary steps are followed each month. At the very end of the monthly closing process, instead of manually running financial reports, downloading, attaching documents, and sending emails, HIA ERP offers the report scheduler tool to schedule reports to run automatically and send as a PDF or excel document to decision makers and stakeholders. 

Summary

Implementing these technologies not only speeds up the month-end close process but also enhances accuracy so financial statements are timely and trustworthy. This supports the entire company so decision makers always have relevant and dependable information for management decisions. 

Read: Top 4 Best ERP Systems for Hotels in 2024

For more ways technology can speed up the month-end close, check out this video on 8 Ways to Use Artificial Intelligence in Hotel Accounting and Business Intelligence. 

Are you ready to transform your month-end close process? Contact us today to learn more about how Hotel Investor Apps ERP & Accounting Software can get you to month-end close faster and with less stress. Book a demo today!