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Accounting automation is at the forefront of any successful hotel operation. Why? Because manual work leads to delays, human error and can be costly. All that number-crunching should be automated in order to improve accountability and get more immediate results. Traditional accounting doesn’t even allow you to visualize your data in real time, which is essential in an industry like the hospitality industry that is constantly changing.
In this guide we will break down accounting automation, help you understand why it’s important for hotels, discuss the main benefits, and forecast how we see the future of the hotel industry thanks to accounting automation. Ready to get started?
What is accounting automation?
For starters, you may be wondering what exactly classifies accounting automation. It essentially is the use of software relying on Artificial Intelligence and robotic process automation (RPA) in order to automate finance operations like reconciliation of accounts, the updating of financial information, and helping to prepare financial statements without the need for human intervention.
Why is accounting automation important for hotels and other businesses?
Accounting automation is key for hotels and other businesses because it allows you to easily take care of repetitive tasks like data entry and calculations, tracking and recording data so that your team can focus on strategic tasks that really matter to your business. Strategic tasks like forecasting, budgeting or investment planning are essential for the proper running of a hotel and to ensure profitability.
Less menial tasks also mean your employees are more satisfied, which means they perform better, and they can complete tasks error-free, which is great for employee self-esteem and satisfaction levels. Read more about employee satisfaction.
What are the main benefits to implementing accounting automation?
Now that you’ve understood more about automation and why it’s important, let’s take a look at some of the main benefits.
1. Increased efficiency and productivity
Increased efficiency and productivity comes down to the fact that hotel accountants no longer need to spend hours settling bills and doing repetitive tasks. This leads to increased efficiency and productivity, and better organization across the department in general. Plus, manual transactions and data entry can be eliminated almost entirely because the software automatically processes the information it receives and creates a relation with existing records.
2. Better decision-making
Automation allows you to get access to insights faster, enabling you to make data-driven decisions, which also leads to improved business operations. The software can more accurately analyse trends, variances and predictability, allowing hotel accountants to make quick decisions based on real-time results.
3. Cost savings
Say goodbye to large accounting teams, software can automate manual tasks, processing more records in less time and in a more cost-efficient way. This also means accounting departments can reduce the time spent on tasks, allowing you to save time and money on useless tasks.
4. Real time financial data
Real time financial data is one of the most important benefits of automation. Since the information is processed by a machine, this means financial data is readily available in real time, allowing you to access and search for accurate data that allows you to stay on top of trends, and keep track of key business metrics. This way, even non-business savvy staff can pull reports and visualize data with the click of a button.
5. Better security
Traditional ledger books and records were not only cumbersome but also not incredibly safe, as sensitive financial data was readily accessible and could be more easily lost or duplicated. Now with data automation you can easily store, back-up, and organize data securely on a password-protected cloud, which keeps important data from getting in the wrong hands. Find out how to protect your hotel from data breaches.
In what areas should accounting automation be applied?
Automation should be applied in areas like general ledger management, processing of expense and accounts payable, payroll, monthly reviews, accounts receivable, paying bills, running expense reports, financial modelling and forecasting, as well as banking and credit card reconciliation.
What will hotels look like in the future thanks to accounting automation?
Now let’s take a look at the future of the hospitality thanks to the help of automation.
Less physical bills and stapling invoices
In Europe, for example, perhaps around 40 to 50 percent of hotels are still regularly printing invoices, stapling them and have an accountant manually consolidating them. With automation, you can say goodbye to this kind of useless paperwork.
New roles and work processes
The accountant of the future should be a programmer as well, as human staff will become too expensive for most hotels to continue to employ simply for performing data entry. Instead of losing their jobs, the roles become restructured and they learn new processes. Times are changing and coding is going to be a large part of an accountant’s work. You don’t need to be a coder per se, but you need to, at least, understand the fundamentals and concepts.
It’s a sad reality that the night audit still exists but, within a couple of years, most people will be doing real-time accounting and night audits won’t exist any more. Smaller hotels have an advantage here, as they are nimbler and can make changes much easier than larger chains.
Stop using expensive and clunky accounting software
Manual labour should not exist and is a waste of money and talent. You are not using the full potential of your employees if they are doing manual work that a robot could do. Frankly, you don’t necessarily need to move to the cloud, but you do need to automate your processes on a cloud-based platform.
Less manual accounting work
An API is about getting rid of manual tasks like .csv exports, so you won’t need to pay accountants for their (expensive) time for what is basic accounting and bookkeeping. Work will be more strategic and less manual.
Online or cloud-based platforms
An online or cloud-platform is a lot cheaper than paying for a standard human bookkeeper.
However, the pricing is more nuanced than that. The headline costs for a recurring subscription to an online service can appear more expensive than an on-premises platform, but then we explain how you need to add in the costs of maintaining that server on your premises and hiring an IT specialist. At the end of the day, the cloud-based subscription option works out much cheaper.
More time available to do the proper bookkeeping
With more systems automated, you will have more time to do proper bookkeeping, which allows you to catch incongruences and find ways to optimize and make your hotel more profitable.
In this guide we’ve looked at the ins and outs of accounting automation, including what it is, its benefits and how we foresee the future of the hospitality industry thanks to this innovation.
Without a doubt, this tool is here to stay, and it’s here to make your lives easier, saving accounting departments time, money, and giving back in job satisfaction.
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Mews Data Dive 2023