Hoteliers need to stay informed on Accounts Payable and Accounts Receivable Aging info at all times. In order to stay competitive in today’s marketplace, it is crucial for hotelier to arm themselves with knowledge about what is happening around them.
Got to be sure that all A/P & A/R information is communicated within the organization, so it will have a much better chance of reducing mistakes when the information can be reviewed by key personnel.
Hotelier should also know that it is important for top management to share their goals and mission with all employees at all levels of the company. By doing this, hotelier will set a culture of commitment to reach these goals, and minimize mistakes. As a company grows in size and complexity, it becomes essential for hotelier to discuss objectives with all employees, including department heads and managers.
Hotelier need be sure that accounts payable are paid on time and delivering what they promised without any type of errors. By doing this, both parties involved are satisfied and happy and the business will stay profitable.
Accounts Payable processing and Accounts Receivable management are vital processes that many hotel businesses today rely on to maintain their cash flow and keep their business going. If your business is involved in hospitality, you need to ensure the aging process is functioning properly. Nimble Hotel Accounting Software helps hoteliers acquire a periodic level-headed assessment of their accounts payable and receivable aging information.
Your accounting department will have to be on top of this routine due to the high impact it has on your hotel’s overall financial picture. The bullet points below will paint a picture for you on how important this process is to your bottom line.
Key Things Accounts Payable & Receivable Aging Information Tells You:
1) Receivables – Accounts receivable aging information indicates the volume of sales being transacted, and whether you can expect a bump in business from new customer or existing customers (a positive trend), or the opposite (a negative trend). Either way, this can be an indication of an upcoming increase or decrease in profit. A consistent positive trend indicates more sales are being made and this can have a direct effect on the working capital available to finance purchases.
2) Payables – A negative trend in accounts payable aging can lead to a decrease in your company’s cash flow and an increase in the costs associated with your suppliers, as well as an increase in bad debt losses. This could mean insolvency for your business.
Businesses must manage their accounts payable aging reports and those of their suppliers consistently to maximize profits, maintain cash flow and reduce risk factors for their businesses. Keep your supplier levels consistent by monitoring performance trends closely and require reporting of open invoice data at any time up until payment has been received from the customer.
The four steps to use accounts payable & receivable aging information are as follows:
1) Understand your own business’s accounts payable aging report; this will provide valuable insight into the overall health of your business. Accounts payable aging information is a key component in keeping a business’s financials in order. Reports are often the first place someone looks when assessing the financial health of any business. It’s important to know how they affect your operations and projections so you can be aware of potential problems early on, preventing them from becoming catastrophic.
2) Understand your own business’s accounts receivable aging report; this will help you determine when to expect payment from customers and how much to invoice them for. You can use this information to manage your cash flow and make sure you can fulfil supplier requirements timely. Accurate projections in these areas are incredibly important to the efficient operations of any business.
3) Accounts payable and receivable aging information is a tool that can help you assess the financial health of not only your suppliers but also that of their customers, depending on whether they report their customer data or not. This can mean the difference between potentially losing or gaining money from your suppliers.
4) Accounts payable and receivable aging information can help you assess the profitability of your business and decide when to take a loss or not. This is key in business management, as it can help ensure you are making optimal decisions for future growth.
FINAL THOUGHTS
You may be a smallish hotel and the impact of accounts payable aging, but the hotel industry plays such a crucial role in the economy that it is equally important to understand how accounts payable and receivable aging info works and how it affects your industry’s health.
Accurate forecasting is essential to a small hotel, just as much as it is to the largest multi-national corporation. If you’re a small hotel and feel that accounts payable and receivable aging info doesn’t apply to your business, you’re incorrect. Please note – In a sample study of 100 companies of 20 employees and less, 65 percent admitted they had no formal accounts payable and receivable aging program. For which they had suffered!
Hotel owners and managers benefit by reviewing property-wise AP & AR aging info using hotel accounting software so their cashflow is all the time streamlined. A lack of visibility into Accounts Payable or Receivable can lead to delayed payments, labour unrest and bankruptcy.
Accounting software, hotel accounting software in particular, is an important part of not only maintaining a company’s financial health but also its bottom line. One key feature many companies now offer is the ability to track the aging and expiring of invoices and payments in their accounts payable and accounts receivable. These features enable businesses to do things like prepay expenses or take advantage of promotions without necessarily breaking any rules.
A hotel accounting software provider should be able to help business owners and managers manage both the finances and operations of a hotel. From the creation of budgets and bills for services to the breakdown of expenses by area, a well-designed hotel accounting system can help ensure that all financials are in order.
PMS Integration with other accounting software systems is also critical when it comes to providing a comprehensive suite of tools that can manage every aspect of the running of a hotel business.
