The name of the game in the hospitality industry is change.
It’s the one constant. Travel trends come and go, destination popularity ebbs and flows, the labor market fluctuates, room design preferences develop, and new technology crops up regularly. For the hotelier used to navigating these evolutions and transitions, the question becomes how to respond.
Which changes should you prioritize?
Our vote is for your financial reporting systems. It may not be the first piece of infrastructure you’d think of investing in, but it’s critical. In this article, you’ll learn why you stand to benefit from upgrading your financial reporting and how to do it.
Why Streamline Financial Reporting?
It’s clear why you might make your operations more efficient. Reducing the demands on your hotel staff could result in significant time-savings and improved customer experience.
But would streamlining your financial reporting system offer the same advantages?
Absolutely. Here are some benefits you could gain from a streamlined financial reporting and cash management system.
Up-to-Date Visibility Helps You Navigate Hard Times
Hospitality has had a rollercoaster ride for the last few years—one with more downs than ups. The main story, of course, was that Covid kept people from traveling. Lots of hospitality-focused companies didn’t survive.
“Biltmore always valued cash analysis, cash forecasting, and reporting… During Covid, our main source of revenue was cut. The owners were keeping a very close eye on cash—even on a daily basis.”
For the Biltmore company, daily visibility into cash flow with real-time data was one of the key strategies they used to weather the Covid storm.
Streamlining your financial reporting can give you that visibility and help your team respond to future crises.
Sophisticated Analytics Help You Capitalize on Opportunities and Mitigate Risks
Improved financial reporting analytics gives you the necessary visibility to make critical strategic decisions. That means seeing risks in advance and preparing for them. It also means taking advantage of growth opportunities.
Advanced cash flow analytics, like cash forecasting, provide the insights you need to make informed strategic decisions. They can help you decide when to cut back on staff or liquidate assets to service your debt payments. And on the other hand, they can help you decide when to invest in a new property or put your cash into investments to earn better returns.
Sophisticated data models help turn your cash data into valuable predictions to inform strategy.
Automation Helps Reduce Staff Time
Generating financial reports is time-consuming—at least the way most companies do it. If you have to log into each of your bank accounts separately, download and export a spreadsheet file, and then copy and paste data together into a single report, you’ll understand exactly how much time this takes.
Streamlining your system means saving time on low-value tasks so you can spend it on higher-value tasks like making strategic decisions. As Antonio Chavez explained,
“The process we had [in Excel] was good, and it worked, but at the same time, it was taking quite a bit of time. That was one of the main reasons we decided to look for cash management software that would take our forecasting and reporting to the next level. Now, since all our bank data is flowing to Trovata, creating a report takes minutes instead of hours.”
How Hotels Can Streamline Their Financial Reporting
Streamlining your financial reporting means making it more efficient, accurate, and less costly. So how can hotels streamline financial reporting?
1. Connect Directly to Your Banking Data
Perhaps the most important step is to create a direct connection between your banking data and where you do your cash flow analytics. With open banking and banking APIs increasingly available, this becomes quite easy.
By linking directly with your bank’s API, you can pipe your cash flow data into your analytics tool in real time. You also increase accuracy by removing the need for manual copying and pasting in your spreadsheet software.
2. Consolidate All Your Bank Accounts in a Single Report
If you’re like most hotels, you probably use more than one bank account. (Mr. Chavez notes that the Biltmore Company has 52 bank accounts). Logging into all those bank account portals is time-consuming, and it’s easy to lose sight of your finances.
Instead, create a consolidated report of your balances for each of those accounts to give your team a bird’s eye view of your cash position.
3. Make Use of Sophisticated Cash Forecasting
Robust cash forecasting models can help you make the best strategic decisions for managing your capital. Excel formulas are better than nothing, but they are rarely as accurate as more sophisticated models based on AI and machine learning—it’s these more sophisticated models that can help you really level up your cash management processes.
“Once you’re able to set up your bank portal with Trovata, the forecasts become very accurate, and I believe it’s because of the machine learning algorithms… the software does a really good job of forecasting inflows and outflows.”— Antonio Chavez, the Biltmore Company
4. Automate Repetitive Processes
It’s not just downloading and exporting data that takes time. Several other functions can tie up your treasury and finance staff: categorizing bank transactions, making scheduled payments, generating reports, and more.
Fortunately, you can automate many of these tasks. For example, Trovata automates transaction categorization so you can more easily identify trends in customer receipts and vendor disbursements—and do it all without paying your skilled staff for entry-level tasks.
“Before, it was probably taking me a couple of hours a day to generate reports and forecasts. Now, it’s taking me about 30 minutes, which is not a lot of time. On average, we’re probably saving about 8 hours a week, which is, you know, a full work day.”— Antonio Chavez, the Biltmore Company
Use a Cash Management System to Streamline Even Further
You can streamline your process even with Excel or other spreadsheet apps. But to truly get your financial reporting to the next level, consider investing in a purpose-built cash flow management system like Trovata.
Trovata gives you full visibility into your cash flow, unlocks insights, automates financial reports, and offers best-in-class AI and machine learning algorithms to power up your forecasting. We automate the busy work so that it’s effortless to produce accurate, up-to-date cash flow and financial reports.
Curious how Trovata could streamline your hotel’s transactions? Request a demo today!