Managing multiple lodging-property financials: what to look for

In its most recent Global Construction Pipeline Trend Report, Lodging Econometrics stated there are 5,572 lodging projects underway in the United States, accounting for 678,965 rooms. That’s a lot of rooms and a lot of properties, and if you’re in the lodging business, you know accounting processes for multiple properties can be a real headache.

If your organization has multiple properties, here are some questions to ask yourself:

• Are you doing 40 percent or more of your reports using spreadsheets outside of your bookkeeping or accounting platform?
• Are executives unable to see across multiple properties at a glance?
• Do you have to sign into each property to view or enter transactions?
• Do you manually identify and eliminate inter-entity transactions?
• Does it take several hours or even several days to complete your consolidations?
• Does it take 10 days or more to close the books?

If you answered “yes” to these questions, we need to talk. Improved visibility and reporting allow lodging leaders to make strategic data-driven decisions. This is what separates leaders from followers. Best-in-class hospitality finance leaders have information at their fingertips and can answer the hard questions with relative ease. If you’re struggling with the questions that your leadership and investors are asking, then your role is reactive. It’s time to look at accounting platforms that can simplify multiple-property financials.

To get the information you need to help drive the business, you’ll need a solution with built-in support for multiple properties so you can look at data from a top-down view as well as by each individual property or groups of properties to monitor key financial and operational metrics that include:

• Occupancy rate
• Average daily rate
• Revenue per available room
• Gross operating profit per available room
• Net operating income
• Average length of stay
• Cost per occupied room
• Profit margin
• Return on investment
• Debt service coverage ratio

If your company is tired of workarounds to handle accounting for multiple properties, here are some things to look for in a new financial management solution:

• A single primary general ledger chart of accounts to simplify property setup, interentity transactions and multiple-property reporting
• The ability to consolidate multiple-property financials quickly and easily with a unified chart of accounts
• The ability to compare and analyze financial performance at each property level or rolled up to the entire business
• Integration with various property management and point-of-sale systems to support those used at different property locations, should these vary
• Easy scaling up or down as properties are added or removed from the portfolio
• The ability to track and report spending-to-budget and actual results
• Instant visibility through roles-based customizable dashboards to track, manage and send reports, with 24/7access from any mobile device
• Automatic scheduling of reports for the timely, proactive monitoring of key performance indicators
• Role-based access to data, reporting and functions
• Adherence to general accepted accounting principles, and detailed user tracking and audit trails
• Support of different tax rules and rates for each property’s location
• The ability to separate financial data for each property to ensure there’s no comingling of funds or transactions
• Automating and tracking financial transactions between property, such as intercompany transfers and shared expenses

Cloud-Native is the Best Option to Manage Multiple Lodging-Property Financials

The best option is a cloud-native financial system designed to work in sync with other business functions to eliminate the need for workarounds and spreadsheets. Cloud-native systems connect easily and securely to other applications, especially systems such as CRM, property management, point-of-sale, tax, revenue management and payroll. These automated connections bring data directly into the financial system for end-to-end processing, manipulation and analysis. A cloud-native system also has the flexibility to run certain capabilities as built-in modules instead of requiring separate specialist systems.

A cloud-native financial management system can serve as the single source of truth, accessible by multiple persons, functions, departments, and groups, to track multiple properties. If your business doesn’t have a holistic financial view of day-to-day operations, you can’t control spending or margins effectively. Keeping each property isolated in its own silo denies access to crucial transactional data that you need to inform your decision making. Every day that action is delayed has adverse effects on the bottom line and impacts competitiveness in fast-moving markets.

When financials run in the cloud, the data is available in real-time to stakeholders wherever they are. Even more valuable is the ability to combine it with operational data and business metrics. Putting finance into a business context allows far more accurate monitoring of how the business is performing.

By implementing the right technology in your financial tech stack to streamline managing the finances of multiple properties, you can improve overall efficiency, promote business growth and better serve your customers and stakeholders.