Hotel Accounting Software: A Practical Guide for UK Hotels

20 January 2023 Michael
Home > Marketing > Hotel Accounting Software: A Practical Guide for UK Hotels
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The short answer

Hotel accounting software helps you record income and expenses, reconcile payments and prepare financial reports. For a UK hotel, the right setup combines accounting tools suited to your business with a reliable connection to your property management system (PMS). Check how the connection handles invoices, deposits, refunds and VAT before choosing a provider.

A busy hotel can take a deposit today, host the guest next month and receive a payment provider’s payout on another date. Add restaurant bills, OTA commissions and supplier invoices, and the challenge becomes clear: your bookings, sales and bank receipts need to tell a consistent story.

This guide explains how to compare accounting software for hotels, what to test in an integration and where RoomRaccoon fits into the process.

Is hotel accounting software the same as a PMS?

No. A hotel property management system manages the stay: reservations, room allocation, guest folios, invoices and related operational tasks. Accounting software manages the wider business finances, including supplier bills, bank reconciliation and financial statements.

A guest folio is the record of charges and payments for a stay. A general ledger brings together the business’s accounting entries. Connecting the two systems can reduce repeated data entry, but the scope and timing of each integration vary.

Your accounting setup should help produce a profit and loss report, a balance sheet and a view of cash flow. Occupancy, average daily rate (ADR) and revenue per available room (RevPAR) provide operational context; they do not show whether the hotel is profitable after wages, commissions, utilities and other costs.

Use hotel reporting tools alongside your accounts. Our guide to hotel data analytics explains how operational information can support decisions.

Guest making a contactless payment with a smartphone at a hospitality venue.

How does an accounting integration work in a hotel?

An accounting integration transfers agreed financial data between your hotel systems and your bookkeeping software. Depending on the connection, this may involve individual invoices, payments or summarised entries. An API connection does not automatically mean every field is transferred instantly or in both directions.

  1. Record the transaction. The PMS records accommodation and extras, while a connected point of sale (POS) system may add restaurant or bar charges to a guest’s folio.
  2. Assign the accounting category. Map each supported item to the appropriate ledger account and tax code, such as accommodation, breakfast or parking.
  3. Transfer the agreed records. Check the export schedule, posting date and treatment of changes made after an export.
  4. Reconcile the money. Match payment records and settlement statements to bank transactions, accounting for fees, refunds and timing differences.
  5. Resolve exceptions. Investigate failed transfers, duplicate entries, unallocated payments and unexplained balances.
Example: a payment is not the same as a payout

Suppose a guest pays £240 and the payment provider deducts an illustrative £4 processing fee. The bank receives £236. Your records should explain the £240 guest payment, the £4 fee and the £236 settlement. Matching only the bank receipt to the guest bill could leave an apparent £4 shortfall.

This is a simplified reconciliation example, not a RoomRaccoon fee quote. VAT and revenue recognition are separate accounting questions.

Keep restaurant revenue from appearing twice

If your POS sends sales directly to the accounts and also posts room charges through the PMS, agree which system creates each accounting entry. Test both a resident charging dinner to a room and a non-resident paying at the restaurant. Their payment routes differ, even when both buy the same meal.

Laptop displaying a hotel calendar with room types, nightly rates and availability.
Your PMS holds operational details such as room rates and availability. An accounting connection transfers the financial records supported by that integration.

What should you look for in hotel accounting software?

Compare systems against transactions from your own hotel. A demonstration using a straightforward paid invoice will not reveal how the software handles a cancelled group booking or a stay crossing month-end.

Checks to make before choosing a system
Requirement What to ask the supplier to demonstrate
PMS integration Which records transfer, in which direction and how often? Show an invoice, a refund and a failed transfer.
Deposits and dates Show a deposit for a future stay and a booking crossing month-end. Explain payment, invoice and accounting dates.
Payment reconciliation Match a payout containing several guest payments, a processing fee and a refund to the bank receipt.
Departmental reporting Separate accommodation, food and beverage, and other income. Show how associated costs are allocated.
UK tax requirements Confirm support for your VAT scheme, tax codes and applicable Making Tax Digital submissions.
Controls and access Show accountant access, user permissions, correction history and the process for closing an accounting period.
Supplier bills and payroll Identify which functions are included, which need another product and how their costs enter the accounts.
Multiple properties If relevant, show reporting by property and legal entity, including how consolidated accounts are produced.

On smaller screens, scroll the table horizontally to see both columns.

What benefits should you measure?

Record how long your team currently spends entering invoices, matching settlements and resolving discrepancies. After implementation, compare those tasks using the same definition and period length. Also track unresolved items and the time needed to close the month. These measures reveal whether the connection is improving your workflow.

Hotel receptionist speaking on the telephone while working at the front desk.

What do UK hotels need to check for VAT and Making Tax Digital?

For VAT-registered hotels, accommodation is normally standard-rated at 20%. The temporary hospitality VAT reductions ended on 31 March 2022. Specific supplies and circumstances can require different treatment, so agree your tax codes with your accountant rather than applying one setting to every item.

VAT-registered businesses generally need to keep digital VAT records and submit returns using compatible software, unless exempt. Check the requirements in HMRC’s VAT record-keeping guidance.

Where multiple programs form your functional compatible software, the required records must pass between them through digital links. HMRC accepts methods including APIs and CSV imports and exports; copying and pasting between programs is not a digital link. A connected PMS alone does not establish that the whole process meets MTD requirements.

Ask your accountant to confirm the VAT treatment of advance payments, cancellations and packages, and review the data flow against VAT Notice 700/21. Make these decisions before activating automatic postings.

Which accounting software should a UK hotel consider?

The best option depends on your accountant’s workflow, your reporting needs and the quality of the PMS connection. Start by checking whether your existing accounting package can meet those requirements.

Xero

Xero offers UK cloud accounting with bank feeds, invoicing, bills, financial reporting and Making Tax Digital support. Its hotel accounting offering also describes departmental tracking and accountant collaboration. Check the plan, transaction allowances and any additional payroll or reporting requirements.

QuickBooks Online

QuickBooks Online offers UK bookkeeping tools including bank connections, invoicing and financial reporting. MTD for VAT is available on supported plans, while payroll is a separate consideration. Confirm that the product and subscription you choose support your VAT scheme and hotel workflow.

More complex hotel groups

If you manage several legal entities, require approval workflows or need consolidated financial reporting, assess a specialist hospitality or enterprise accounting platform. Ask it to demonstrate your ownership structure and reporting requirements. Room count alone is not enough to determine the right system.

RoomRaccoon’s UK accounting integrations page identifies Xero and QuickBooks as available connections. Confirm the exact product version, supported records and setup for your property.

Illustration of RoomRaccoon financial reporting connected to accounting providers including QuickBooks, Xero, Sage, Twinfield and Visma.
Illustration from the original guide. Tax rates shown are not UK VAT guidance. Confirm current availability and functionality for your chosen accounting product.

How much does hotel accounting software cost?

Compare the total cost of the setup, not just an introductory subscription price. Ask for a written quote covering:

  • The accounting subscription, users and any transaction limits.
  • PMS integration or connector charges.
  • Ledger mapping, migration, training and accountant involvement.
  • Optional payroll, expense management and reporting tools.
  • Ongoing support, renewal pricing and contract terms.

Keep payment processing fees separate from software subscription costs. For the hotel management side, check RoomRaccoon’s current packages and pricing, including the integrations and reporting available in your package.

How do you set up a hotel accounting integration?

Bring your accountant, hotel operations lead and software providers into the setup process. Agree who owns each step and who will investigate discrepancies after launch.

  1. Map your records. List sales categories, tax codes, payment methods, deposits, refunds and outstanding balances.
  2. Agree posting rules. Confirm the chart of accounts, relevant dates and the treatment of advance receipts and adjustments.
  3. Set a cut-off. Decide what historical data will move, how opening balances will be checked and when the new connection starts.
  4. Run representative tests. Include a direct booking, an OTA payment, a restaurant room charge, a partial refund and a month-end stay.
  5. Check the results. Compare source records, accounting entries and bank settlements. Confirm that nothing is missing or counted twice.
  6. Assign ongoing checks. Document how staff monitor exports, resolve errors and review the first month-end close.

How does RoomRaccoon support hotel accounting?

RoomRaccoon connects hotel operations with external accounting software. Its accounting integrations support the export of guest folios and the mapping of components such as accommodation, extras and taxes to ledger accounts.

Integrated hotel payments help keep payment information connected to reservations, while reporting supports the review of hotel activity. The accounting package remains responsible for the wider bookkeeping and financial reporting functions you select it to perform.

Ask for a demonstration using your current accounting software, payment methods and revenue categories. Confirm the export timing, available reports, correction process and package requirements before agreeing the setup.

Frequently asked questions about hotel accounting software

Does a small hotel or B&B need specialist accounting software?

Not necessarily. A general UK accounting package may be sufficient when it supports your bookkeeping, tax and reporting needs. The important check is whether your hotel transactions can be recorded accurately without excessive manual work. A suitable PMS connection can help.

Can accounting software automate the night audit?

Software can automate parts of daily processing and reporting. RoomRaccoon describes an automatic rollover to the next day at midnight. That does not remove the need to investigate missing charges, incorrect postings or unexplained balances. Define which checks remain with your team.

How should guest deposits appear in the accounts?

Your records should distinguish a payment received before arrival from the revenue recognised for the stay. The appropriate entries depend on your accounting basis and circumstances, and the VAT timing can differ from revenue recognition. Have your accountant approve the rules and test them in the integration.

Will a PMS integration reconcile every bank transaction?

Do not assume so. Sending invoices or payment records to the accounts is different from matching a net bank payout. Check how the setup handles processing fees, refunds, OTA settlements and batches containing several payments.

Can I keep my current accountant and accounting package?

Often, yes. Establish whether a supported connection or suitable export can provide the records your accountant needs. Confirm compatibility before changing either system, and involve your accountant in mapping and testing.

See how your hotel data can connect to your accounts

Book a RoomRaccoon demo and bring the name of your accounting package, your main payment methods and one transaction that currently takes too much time to reconcile. Ask the team to walk through the supported workflow for your hotel.

Book your RoomRaccoon demo
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Michael

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