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The hospitality industry in the U.S. is big business, so naturally there’s definitely a need to find the best business accounting software for hotels. According to a report by Deloitte, hotels accounted for $185 billion in sales in 2017. And as of 2018, over 22,000 of the nation’s hotels were independently owned.
Hotels can’t use any generic off-the-shelf accounting software, though. The software for your hotel has to be able to manage the unique accounting challenges you face and provide specialized solutions to make managing those challenges as easy as possible.
Further complicating your software choices is the dearth of hotel accounting software options for small, boutique hotels. Chris Macksey of Prix Fixe Accounting—an expert in accounting for the hospitality industry—knows all about the accounting software options available to small, independent hotels.
“[There] are a lot of really big software companies playing in [the hotel accounting] space, and they are quite a bit behind the rest of the industry and other industries. There are still a lot of server-based booking and property management systems that make it hard to incorporate into your tech stack,” Macksey says.
Add this to the unique challenges of the hotel industry, and choosing a good accounting software might seem like an insurmountable challenge. Let’s strive to make that challenge easier.
According to Macksey, the sheer complexity of running a hotel is one of the biggest challenges faced by the hotel industry. “It’s almost like running a small town,” Macksey says. “There’s always some type of fire to put out.”
This is no exaggeration. Managing bookings, maintenance, and guest expectations aside, some of the challenges faced by hoteliers include:
Keeping all of this in mind, you might be wondering how to choose the best accounting software for your hotel. We’ve explored various hotel accounting software options and narrowed down the top four, depending on the needs of your enterprise.
You want to save money wherever you can, and paying hundreds of dollars per month for accounting software for your small boutique hotel seems like a poor use of your cash. Many business owners—regardless of industry—are on the hunt for high-quality, free accounting software.
When asked about a free hotel accounting software for small, boutique hotels, Macksey says, “Anybody that caters to hotels… [won’t] even offer a free option.”
That leaves hotel owners looking at general business accounting software. Unfortunately, as of the time of writing, high-quality, free accounting software doesn’t exist. Many options on the market claim to provide fully functional accounting software at no cost, but these free-to-use options are lacking in features and functionality, full of bugs, or are hindered by some combination of the two.
Cutting costs in your business is admirable, but your accounting software is an investment in the health and management of your business. This is not where you want to choose the cheapest option.
“We use QuickBooks Online for them [our small, boutique hotels],” Macksey says. “You need to be on Advanced or Plus,” he continues.
No booking or property management software integrates directly with QuickBooks Online, but that shouldn’t dissuade you from choosing QuickBooks Online for your small boutique hotel. The power you get from the reporting, combined with the ease of use of QuickBooks Online will offset the time you might spend on manual data entry.
Why QuickBooks Online Plus or Advanced instead of Essentials or Simple Start? QuickBooks Online Plus allows you to set up class and location tracking—must-have features for managing the various profit centers in your hotel. You can also track inventory in QuickBooks Online Plus, which is critical in order to keep your costs under control.
With QuickBooks Online Advanced, you can expand your user capacity to up to 25 unique users, each with customized access. QuickBooks Online Advanced also comes with top-tier support, unlimited class tracking and chart of accounts capabilities, and online training courses for your staff. The best feature of QuickBooks Online Advanced, though, is that it includes a subscription to Fathom—a powerful reporting and analytics software. Fathom helps QuickBooks Online Advanced users get the most out of their accounting data by providing dashboards and the ability to customize projections.
QuickBooks Online Plus pricing starts at $70 per month ($150 per month with full-service payroll), and QuickBooks Online Advanced pricing starts at $150 per month ($230 per month with full-service payroll).
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Maybe your hotel business is larger than a boutique hotel or bed and breakfast. Independent hotel groups have different challenges than small, boutique hotels. One of the biggest challenges is managing all your properties from one dashboard.
If you own a small or medium-sized hotel group, check out Cloudbeds. Cloudbeds is an all-in-one property management, booking, and channel management system that boasts ease of use as one of its primary features: a must-have in order to keep your operations running smoothly.
Unlike some competitors in its price range, Cloudbeds allows you to manage multiple properties all from one dashboard. It also serves as a point-of-sale, inventory management, and reservations management program. See a complete list of Cloudbeds’ features here.
Cloudbeds is a cloud-based software that functions as a subscription service. Pricing varies based on your hotel type and the number of rooms you have available to book. Fortunately, Cloudbeds also has a pricing calculator to help you determine exactly what plan you need as well as your monthly subscription costs. Small hotels and other hospitality groups can get a price quote right away, while larger hotel groups might need to book a free consultation in order to get specialized pricing.
Although Cloudbeds can give you much of the financial reporting you need right within its system, many hoteliers choose to integrate Cloudbeds with QuickBooks Online. Integrating Cloudbeds with QuickBooks Online gives you a fully-functional double-entry accounting system you can easily use in collaboration with an accountant or outsourced bookkeeper.
To integrate Cloudbeds with QuickBooks Online, you can use either Zapier or The Percentage Company. Note that QuickBooks Online, Zapier, and The Percentage Company all require an additional subscription cost. QuickBooks Online Plus—the version you will need if you have multiple locations or revenue classes—starts at $70 per month ($150 per month with payroll). Zapier and The Percentage Company price their services based on the number of Zaps (Zapier) or the number of rooms (The Percentage Company).
Maybe you have your booking and channel management software in place, and you aren’t looking for a point of sale or inventory management system to use on-site at your hotels. Instead, you are looking for a powerful, cloud-based GAAP-compliant bookkeeping software for your mid-sized and growing hotel enterprise. If this describes you, look no further than Sage Intacct.
Sage Intacct allows you to manage the accounting for all your properties and locations in one software, but that doesn’t mean your entire staff can see all the data for every property. Instead, staff members have access to the data only for their location. This data then feeds into a centralized dashboard, which you can use to manage your hotel business’s overall performance.
Because Sage Intacct scales with your business, you don’t have to worry about outgrowing this software as your business grows. This is a huge relief because learning a new software while managing a growing enterprise is the last thing you want to do. Pricing for Sage Intacct is available by request only.
Built by hoteliers for hoteliers, M3 Accounting Software is an all-in-one accounting solution specifically for hotels. You can manage the accounting for your entire property portfolio with this one software. This includes time tracking, accounts payable, financial management, and much more.
M3 integrates with nearly 40 property management systems, meaning chances are very good it will be a “plug and play” solution for your accounting needs. Not having to change your property management system—or use a clunky integration workaround—saves you time, effort, and stress.
What really makes M3 stand out, though, are its options for support services. M3 provides implementation support and training for those hoteliers with an accounting team on staff. But if you don’t want to manage business accountants in-house, M3 has a full-time accounting staff available to handle the accounting for you. These hotel accounting specialists make sure your books are always up to date and in compliance with the latest revenue recognition and other requirements.
Pricing for M3—both the software and the support services —is available by request only. The first step is to schedule a free demo, which you can do online.
Options for do-it-yourself and assisted payroll abound. If you have a small, boutique hotel business—one location with a limited number of employees—you will likely be fine using a solution like QuickBooks Payroll or Gusto. These are relatively low-cost options, which take much of the stress out of managing payroll and taxes.
If you have multiple locations or more than a few employees, though, you would be better served by engaging the services of a full-service payroll and HR management company. Fully outsourcing your payroll in this manner will not only save you time, but it will also protect from many of the payroll liabilities business owners face.
Whether you own a small, boutique hotel or a small and growing hotel group, accounting for your hotel business is complex, and you have special needs many other businesses simply don’t have. Our top picks here are what we have found to be best for a large number of hoteliers of different sizes and specialties, but that doesn’t mean they will work perfectly for your business. As always, do your due diligence to find the solution that will work best for your particular enterprise.
Don’t forget to consult with your accountant or outsourced bookkeeper for recommendations, too. Accountants like Macksey at Prix Fixe Accounting can assess the nuances of your business, and they will be able to guide you to a great software that will support your needs.