The lodging industry is evolving at a rapid pace. Increased competition, rising costs, labor shortages and pent-up demand have all created new marketplace demands that can test the mettle of the most experienced lodging operators. To squeeze every dollar of profit out of these dynamics, many lodging operators like you are looking to upgrade to cloud-based accounting solutions.
Cloud-native accounting platforms offer numerous benefits to hotel operators and can help you streamline your financial operations, enhance efficiency and make informed decisions. Cloud-native platforms eliminate the need for on-premises hardware and software, reducing upfront costs and ongoing maintenance expenses. You can scale your accounting resources based on your needs, paying only for the resources you use. Cloud-based platforms offload much of the IT management and maintenance to the service provider, allowing you to focus on your core business rather than managing software updates and technical issues.
There are a lot of lodging accounting platform options available. If you’re looking to step up your game, here are some of the things you need to look for when considering a new solution.
Accounting Platforms – What to Look For?
When evaluating accounting platforms, hotel operators should consider a range of factors to ensure they choose a solution that aligns with their business needs and objectives. Here are some key questions to consider.
Functionality and Features
In terms of functionality and features, does the platform offer the accounting features your hotel requires, such as accounts payable and receivable, general ledger, payroll and expense tracking? Does it provide automation and integration capabilities that can streamline workflows? Can it handle the specific needs of the hospitality industry, such as tracking room revenue, guest expenses and occupancy rates? Can you customize the platform to suit your hotel’s specific accounting processes and reporting requirements? Does it allow for creating custom reports and dashboards? Look for solutions that use financial data models and reporting based on the Uniform System of Accounts for the Lodging Industry standards set by Hospitality Financial and Technology Professionals, and allow for custom and ad-hoc reporting. Cloud-based accounting systems often come with automation features such as invoice processing, expense categorization and report generation. This reduces manual data entry, minimizes errors, and frees up your staff to focus on more strategic tasks.
Is the accounting platform scalable? Can it accommodate your property’s growth and changing accounting needs? Is it easy to add or remove users and resources as the business expands or contracts? Is it easy to add or remove business entities? Cloud-native platforms allow for easy scalability, ensuring that the financial management platform can adapt to the changing size and complexity of your business. Look for a solution that can easily add or remove entities. The ability to manage multiple entities on a single system simplifies reporting, intercompany elimination, consolidations and the monthly close.
Ease of use
Is the platform intuitive and user-friendly, or will it require extensive training for your accounting team? Are the navigation and interfaces designed in a way that aligns with your team’s workflow? Look for an accounting platform that’s easy to use and lets you configure how the user interacts with the software based on their role. Cloud-based platforms can be accessed from anywhere with an internet connection, allowing hotel operators and their accounting teams to work remotely or on the go. This flexibility is especially valuable in the hospitality industry where operations can be 24/7. Look for a platform with built-in collaboration tools. This is especially useful for hotels with multiple locations or departments that need to work together on financial matters.
Can the platform integrate with the other systems your hotel uses, including property management, point of sale and customer relationship management software? How seamless is the integration process, and what data can be shared between systems? Seamless integration is vital to ensure data flows smoothly between systems, reducing manual work and potential errors. Modern cloud-native accounting platforms use APIs (Application Programming Interfaces), designed to simplify integration between different software applications and systems. APIs serve as a set of rules and protocols that allow different software programs to communicate and interact with each other, enabling data exchange and functionality sharing. Integration points can include point-of-sale, payroll, property management and tax, for example.
Does the accounting software use artificial intelligence, and if so, how? Many lodging operators are employing AI technology to enhance security measures and streamline financial operations.
Here are some things to look for:
- Fraud detection: AI algorithms can detect and prevent fraudulent activities. These algorithms analyze various data points, such as guest booking patterns, transaction history, and behavioral anomalies, to identify potential instances of fraud. By continuously monitoring and analyzing data in real-time, AI-powered systems can flag suspicious activities and help you take proactive measures to mitigate fraud risks.
- Financial outlier detection: AI algorithms can analyze financial data to identify outliers and anomalies. By monitoring transactions, invoices, and financial records, AI-powered systems can detect irregularities that may indicate potential financial fraud or errors. This helps you maintain financial integrity and identify areas where further investigation or corrective measures may be necessary.
- Timesheet analysis: AI can automate and analyze timesheets to ensure accurate and efficient workforce management. By leveraging machine learning algorithms, you can identify patterns, discrepancies or potential inaccuracies in employee timesheets. This helps in maintaining accurate records, ensuring fair compensation and improving overall operational efficiency.
What security measures does the platform have in place to protect sensitive financial and guest data? Does it comply with relevant industry standards and regulations, such as PCI DSS for payment card data? Reputable cloud providers invest heavily in security measures to protect data. This can be particularly important for properties that handle sensitive financial and guest information. Regular backups and data encryption contribute to data security and disaster recovery. Cloud-native accounting platforms often offer built-in compliance features that help hotels adhere to accounting standards and regulations. They also make generating financial reports, statements and tax filings more efficient.
What kind of customer support is offered, and how responsive is the provider’s support team? Are there resources such as documentation, training materials, and user communities available to help your team make the most of the platform? Look for a solution that offers customer support through a variety of channels and has various support levels available that match your needs and budget, ranging from basic to premium tiers. Top-tier providers offer extensive online knowledge bases should you choose to be more hands-on as well as tutorials. Also, look for providers that encourage their users to connect with each other through online communities, user groups and face-to-face conferences.
What is the pricing model? Is it subscription-based, pay-as-you-go, or based on usage levels? Are there any additional costs, such as charges for adding users or accessing certain features? Typically, a modern cloud-native accounting platform will deliver extensive core functionality using a subscription model, so budgeting is consistent over time, and you don’t have to worry about monthly variations. There may be additional charges for functionality beyond the core, such as accounts payable automation, which is quite different than reporting on payments on accounts.
As noted earlier, cloud-native platforms eliminate the need for on-premises hardware and software, reducing upfront costs and ongoing maintenance expenses. Since these reduce the need for physical servers, they will lead to a smaller carbon footprint and contribute to your sustainability efforts. While not part of a pricing model, these are additional considerations when looking at the total cost of ownership and return on investment.
By thoroughly evaluating these factors, you can make an informed decision and select a cloud-based accounting platform that aligns with your operational requirements and business goals.