Bookkeeping for Motel Business – Essential Tips and Tricks

Managing your motel’s finances isn’t just about balancing the books — it’s about gaining insights that drive your business forward. 

By diligently recording every transaction, from guest payments and room reservations to expenses like staff wages and utility bills, you get a clear and comprehensive view of your motel’s financial health.

With accurate and up-to-date financial records, you and your team can make informed decisions with confidence. You’ll be able to see what’s working well, identify areas that need improvement, and plan for the future more effectively.

Good bookkeeping practices also help you catch any negative financial trends early on, so you can address them before they become bigger issues.

Understanding the unique challenges motel owners face, doola Bookkeeping offers financial tools and support tailored specifically for the motel industry. 

Our experienced CPAs specialize in hospitality accounting, helping you uncover hidden deductions, stay compliant with ever-changing tax laws, and efficiently manage occupancy taxes — all of which saves you valuable time and money.

In this guide, we’ll walk you through everything you need to know about accounting for motels.

From essential bookkeeping practices to tips on leveraging professional assistance, we’ll provide the insights and resources to help your motel business thrive.

Why Is Motel Bookkeeping Important?

Motel bookkeeping is more than just crunching numbers — it’s about understanding the financial pulse of your business. 

Effective bookkeeping gives you clear insights into your revenue, profitability, and the financial factors that influence your motel’s operations. This clarity is quite important for making informed decisions when it comes to budgeting, forecasting, and cost planning.

For instance, the  hospitality industry which includes BNBs and motels are subject to various taxes, including sales tax, occupancy tax, and income tax. 

Proper bookkeeping ensures you’re accurately tracking taxable income and expenses, helping you stay compliant with tax laws and avoid penalties.

Without quality bookkeeping, you might not know how much money is flowing in or out, where you’re overspending, or which opportunities you’re missing. This lack of financial awareness can trap your motel in a cycle of debt, making it hard to stay afloat.

In the worst-case scenario, the business could face collapse without you realizing the severity until it’s too late.

How Do You Maintain Accounts and Books in a Motel?

Maintaining accounts and books in a motel involves several key steps that help you track financial transactions, manage expenses, and make informed business decisions. 

Maintaining good, clean, books means:

Utilizing Accounting Software Tailored for Hospitality

Invest in accounting software that’s designed for the hospitality industry. Software like doola Bookkeeping, QuickBooks, Xero, or specialized hotel management systems can streamline your bookkeeping process.

Ensure your accounting software integrates with your reservation and point-of-sale (POS) systems. This integration automatically captures financial data from bookings and sales, reducing manual entry errors.

Keeping Detailed Records of All Income

Record income from room bookings, food and beverage sales, laundry services, and any other amenities you offer.

Additionally, provide invoices for all transactions and keep copies for your records. This practice not only helps with tracking but also enhances professionalism.

Recording Expenses Accurately

Organize expenses into categories like utilities, payroll, maintenance, and marketing. This kind of categorization will simplify your entire bookkeeping process and help you identify where your money is going.

Keep digital or physical copies of all receipts and invoices from suppliers and service providers.

Maintaining Separate Ledgers

Maintaining separate ledgers for different types of transactions, such as guest accounts, city ledger (accounts receivable), and general expenses, is essential for detailed tracking and operational control in a motel.

Each ledger serves a specific purpose: the guest ledger tracks current guest charges, the city ledger manages post-checkout receivables, and the general ledger consolidates all financial data for a complete financial overview. 

Reconciling Accounts Regularly

Compare your motel’s financial records with bank statements monthly to ensure they match.

Maintain an audit trail by recording every financial transaction with a date and reference number. This process helps catch any discrepancies or unauthorized transactions early.

Implementing Strong Internal Controls

Assign different financial tasks to different staff members to reduce the risk of fraud or errors.

For example, the person handling cash shouldn’t be the same person reconciling bank statements.

Conduct periodic internal audits to review financial records and procedures.

Staying Compliant with Tax Laws

Familiarize yourself with local, state, and federal tax requirements, including sales tax, occupancy tax, and income tax.

File tax returns accurately and on time to avoid penalties. Consider hiring a tax professional with hospitality experience.

Budgeting and Forecasting

Develop an annual budget based on historical data and projected income and expenses.

Compare actual financial results to your budget regularly to identify variances and adjust as needed.

For forecasting, use cash flow trends and data to predict future financial performance.

Seeking Professional Assistance When Needed

Expert bookkeepers for your motel’s finances are important because these specialists in hospitality accounting understand the industry’s unique complexities.

They’ll keep your motel compliant with changing tax regulations, ensure accurate and efficient bookkeeping, and offer detailed financial reports and insights. 

By delegating complex financial tasks to professionals, you can reduce errors, optimize cash flow, and gain strategic insights that enhance profitability and growth.

What Are the Essential Motel Accounts Needed for Effective Bookkeeping?

Keeping your motel’s finances in order starts with understanding the different types of accounts that need to be tracked.

Typically, a motel keeps eight types of accounts. They are:

1. Asset Accounts

These accounts represent resources owned by your motel that have economic value.

✅ Cash and Cash Equivalents: This includes physical cash, checking accounts, and short-term investments that are easily convertible to cash.

✅ Accounts Receivable: Money owed to your motel by guests or third parties, such as travel agencies or corporate clients who have arranged bookings.

✅ Inventory: Items like linens, toiletries, and minibar supplies that are used in daily operations.

✅ Property, Plant, and Equipment (Fixed Assets): Long-term assets such as the motel building, furniture, fixtures, equipment, and vehicles.

✅ Prepaid Expenses: Payments made in advance for goods or services, like insurance premiums or service contracts.

✅ Security Deposits: Funds held as deposits for utilities or rental agreements.

2. Liability Accounts

Liabilities are obligations your motel owes to others.

✅ Accounts Payable: Money you owe to suppliers and vendors for goods and services purchased on credit.

✅ Accrued Expenses: Incurred expenses that haven’t been paid yet, such as wages, interest, or taxes payable.

✅ Unearned Revenue: Payments received in advance from guests for future stays or services.

✅ Long-term Debt: Loans and mortgages that are due beyond one year.

✅ Short-term Loans: Any debt obligations due within a year.

3. Equity Accounts

These accounts represent the owner’s claims after liabilities are subtracted from assets.

✅ Owner’s Capital: The initial and additional investments made by the owner into the business.

✅ Retained Earnings: Profits reinvested in the motel rather than distributed to the owner.

✅ Owner’s Drawings: Funds taken out of the business by the owner for personal use.

4. Revenue Accounts

Revenue accounts track the income generated from your motel’s operations.

✅ Room Revenue: Income from room bookings, including nightly stays, extended stays, and any premium room charges.

 ​✅ Food and Beverage Revenue: If your motel offers dining services, include income from restaurants, bars, room service, or vending machines.

✅ Other Operating Revenue: Income from additional services like laundry, parking fees, conference room rentals, or recreational facilities.

✅ Miscellaneous Income: Any other income sources, such as commissions from tour bookings or vending machines.

5. Expense Accounts

These accounts record all costs incurred to operate your motel.

✅ Cost of Goods Sold (COGS): Direct costs of items sold to guests, like minibar items or gift shop merchandise.

✅ Payroll Expenses: Wages, salaries, bonuses, and benefits paid to employees, including taxes and insurance.

✅ Utilities Expense: Costs for electricity, water, gas, internet, and phone services.

✅ Maintenance and Repairs: Expenses for routine upkeep and repairs of the property and equipment.

✅ Cleaning and Housekeeping Supplies: Costs for detergents, cleaning agents, and other supplies used by housekeeping.

✅ Marketing and Advertising: Expenses related to promoting your motel, such as online ads, brochures, and travel agency commissions.

✅Insurance Expense: Premiums for property, liability, workers’ compensation, and other insurance policies.

✅ Administrative Expenses: Office supplies, software subscriptions, and other overhead costs.

✅ Professional Services: Fees paid to accountants, lawyers, consultants, and other professionals.

✅ Licenses and Permits: Costs for business licenses, health permits, and other regulatory fees.

6. Tax Accounts

Keeping track of taxes is crucial for accurate tax filing, compliance and financial planning.

✅ Sales Tax Payable: Taxes collected from guests that need to be remitted to tax authorities.

✅ Income Tax Expense: Estimated taxes on your motel’s earnings.

✅ Property Tax Expense: Taxes levied on the motel property by local governments.

7. Contra Accounts

These accounts are used to record deductions or allowances.

✅ Accumulated Depreciation: The total amount of depreciation expense that has been recorded against fixed assets.

✅ Allowance for Doubtful Accounts: An estimate of receivables that may not be collected.

8. Guest Ledger Accounts

Specific to the hospitality industry, these accounts track guest transactions.

✅ Guest Folios: Individual accounts for each guest that detail charges and payments during their stay.

✅ City Ledger: Accounts receivable from non-guest entities like corporate clients or event organizers.

Simplify Your Motel’s Finances with doola Bookkeeping

Managing the finances of a motel can be complex and time-consuming. doola offers professional bookkeeping services tailored to help you keep your motel’s accounts organized and accurate.

With the guidance of our seasoned bookkeepers, you can focus more on providing excellent guest experiences while they handle the financial details.

Here’s why you should choose doola for your motel’s bookkeeping:

Comprehensive Financial Management: doola handles everything from daily transaction recording, opening business bank accounts to monthly financial reporting. We ensure that all income and expenses are accurately tracked and categorized.

Time and Cost Savings: By entrusting your bookkeeping to doola, you free up valuable time to focus on your guests and daily operations. Accurate bookkeeping also helps identify cost-saving opportunities and areas to maximize revenue.

Regulatory Compliance: We stay up-to-date with the latest tax laws and regulations, ensuring your motel remains compliant and avoids unnecessary penalties.

Interested in learning how doola can make a difference for your motel business? 

Book a demo with us and see how we can support your motel’s financial and bookkeeping needs.