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Automating Hotel Back Office Functions with Technology

Written by Jason Q. Freed | Jul 16, 2024 4:07:58 PM

The rising cost of running a hotel in today’s environment has led owners and operators across the industry to search for ways to operate more efficiently.  

In many cases, this has led management companies to centralize operations, moving functions like accounting, marketing and revenue management from the property level to the corporate office. Hoteliers are also increasingly adopting technology specifically focused on streamlining operations, freeing up their teams to focus on improving the guest experience. 

Tools designed to automate back office functions like night audit compliance, invoice workflows, and financial reconciliations will allow your teams at the property level and at headquarters to get more done in a shorter amount of time. 

Streamlining Night Audit Compliance 

Night audit is a necessary process at every hotel, ensuring all details of the day’s transactions are recorded and stored for audit compliance. Technology can standardize your night audit process to ensure compliance and efficiency across your entire portfolio. Night audit tools consist of three main components: a report repository, a loading portal, and a compliance dashboard. 

A cloud-based night audit compliance system will securely store, organize, and manage your night audit reports. It should support multiple file ingestion methods, including email and SFTP. The system will automatically index documents, making them easily searchable by various parameters such as report name, guest name, or stay date. It should also offer robust search capabilities, version management, and user access control, ensuring that only authorized personnel can edit and share documents. 

A compliance dashboard within your night audit compliance solution should offer a comprehensive overview of report and signature compliance for single hotels or entire portfolios. It will display compliance percentages and should allow users to filter by hotel or portfolio.  

By implementing a night audit compliance tool, hotels save on average more than 100 labor hours per month, translating to more than $150,000 per year, based on employee cost per hour. In addition, one hotel will save an average of $150 per month or $1,800 per year on storage, paper and printing costs.   

Learn more about Otelier’s night audit compliance tool, DigiAudit. 

Automating Financial Reconciliation 

Automating the financial reconciliation process can significantly streamline operations for hoteliers, reducing manual errors and increasing efficiency.  

  • Income Journal Auditing. Use software that automatically creates journal entries and posts them to accounting systems. Ensure the tool provides a clear monthly ledger view, showing detailed balances for various accounts like Advanced Deposits and Guest Ledger. 
  • Bank Reconciliation. Utilize tools that match transactions from Property Management Systems (PMS) or Point of Sale (POS) systems with bank deposits automatically. Look for features that flag discrepancies for manual review to address potential fraud and ensure accurate settlements. 
  • OTA Reconciliation. Automate the comparison of PMS data with Online Travel Agency extranet reports. The software should highlight discrepancies such as late cancellations or mismatched stay dates, allowing front office teams to systematically resolve issues and ensure accurate commission payments to OTAs.  

An automated financial reconciliation tool will save hoteliers more than 100 hours per month in labor costs, translating to $37,500, on average. OTA reconciliation alone can account for nearly $7,000 in savings per year.  

Learn more about Otelier’s financial reconciliation tool, Rec. 

Automating Invoice Workflow and Payments 

Hotel General Managers typically spend a handful of hours per week processing vendor invoices and payments, which can be significantly reduced by implementing Accounts Payable (AP) automation solutions. These tools integrate with existing accounting and Property Management Systems to handle everything from invoice capture to payment processing. By allowing vendors to submit invoices digitally, the need for manual data entry is minimized, ensuring swift and accurate processing. 

Configurable workflows can route invoices to the appropriate team members based on predefined rules such as department, amount, or vendor. This streamlines the approval process, reducing delays and improving efficiency.  

Payment processing can be automated to reduce manual tasks like check cutting and mailing. Bulk payment runs support various methods, including ACH, wire transfers, and virtual credit cards. Scheduling payments based on invoice due dates and offering detailed payment status updates to vendors improve transparency and communication. Ensuring security and compliance through secure platforms and maintaining audit trails for all transactions are crucial for protecting sensitive financial information.  

With an automated accounts payable system, hoteliers save more than 20 labor hours per month per property, on average. This translates to more than $6,500 per year, based on employee cost per hour. 

Learn more about Otelier’s AP automation tool, DigiPay.