A game of numbers in Hotel Industry

Financial accounting is a specialized branch of accounting that keeps track of a company's financial transactions. Using standardized guidelines, the transactions are recorded, summarized, and presented in a financial report or financial statement such as an income statement or a balance sheet.

Accounting System in hotels

A hotel is a business which can be started either in the form of sole proprietor or a partnership or a company. In a hotel, like other business concerns, a number of transactions take place during a day. It purchases provision, soft drinks, alcoholic beverages etc. from suppliers and sells accommodation, meals, drinks and services to its guests. It employs managerial, skilled, clerical and other staff to whom salary is to be paid. A hotel incurs certain expenses like cartage, wages taxes and other charges. The proprietor/mangers like to know about all the money, goods and services received and given away as it helps to get correct financial state.

It is essential to keep a written record of all the transactions in correct books which help in calculation of profit and loss for hotels. Now a day’s every hotel whether large or small, according to its size and requirement, adopts a special system of accounting and control and trough this books of accounts one can judge the efficiency and financial success of the hotel.

The nature of hotel business is different from other commercial houses in many respects. In commercial houses the credit is allowed to limited number of customers who are personally known to the trader whereas in hotels the credit is allowed to the entire guest except few who appear to be doubtful. The personal accounts of the guests are opened immediately as soon as they arrive and occupy the rooms in the hotel. The guests accounts are maintain in such a manner that it remains complete up to the minute. Their account is kept ready and whenever they check out, the bill is presented for payment. This is the reason why hotel maintain the accounts in a different manner.

Hotels having multiple branches and management like to compare income expenditure, profit or loss of one branch with other branch. The comparison is only possible when all the branches have adopted a common system and common classification of accounting.

Today all hotels have adopted uniform system of accounting which provides the standardized method of presenting the financial result. Hence studying accounts becomes essential for serving in the hotel industry.