Even for savviest hotelier, it becomes a daunting task to maintain healthy cash flow.
Like its said 82% of businesses fail of the poor management of cash flow, as it takes a downturn in your financial position and cause your hotel business to close completely.
But it is fortunate that, there are strategic steps already into existence that helps you as a hotelier in avoiding potential problems and increase the cash flow profusely.
Here in this blog, we’ll take you through the 5 best and proven practice that steer your business in the right direction. Let’s dive deep:
Financial Projections Matter
Preparing accurate budgeting and forecasting hotel expenses as well as anticipated revenues is really important, using accurate cash flow statements.
This practice helps you predict when your business is likely to have enough cash and even warns you early on the potential shortfalls of cash.
To get a crystal clear idea on your hotel business’s current financial health, the cash flow should be forecasted on both weekly and monthly basis without fail.
Once you knew the costs, it becomes a break-even point that serves a readymade target for projecting your business’s future cash flow and predicts profit making points.
Regular Cash Flow Monitoring
Cloud based hotel accounting software like Nimble Property, niche hotel industry tool makes it easier for hoteliers to analyze their cash flows regularly.
Switch to such software, which offers a great convenience and flexibility to monitor you cash flow, make frequent projections by enabling reports generation in an accurate manner.
Investigate the major variances and escalate promptly to your managers to improve the quality of operations and hotel management.
Cash flow analysis becomes a boon for you to identify the issues early and prepare a plan of contingency for better future.
Do it well, so you stay on top of your hotel/hotel chain cash flow, all the time.
Speedy AR Collection Procedures
Get paid instantly from your vendors for your services, so you see the cash flowing into your business.
Hotel Accounting Services helps you promptly do the invoicing by importing and adding your customer data into consolidated system, for the services and goods supplied.
That approach makes it really easy for you to track your hotel account receivables and even stay alert on the aging invoices, which are ready for following up with the slow-paying customers.
Delaying in raising invoices on month ends will only cause late payment into your bank. So, ideally you got to invoice as soon as possible so the payments are received faster and collection time is reduced.
Furthermore, enabling different payment methods for your customers so they ask you to accept alternative way.
Technology is the ‘Lifesaver’
If you can leverage the cloud based technology driven hotel accounting services, your business goes to the next level.
Incorporate technology and automation in to your hotel accounting so you manage your daily sales, improve your financial efficiency, streamline operations and organize everything for the taxation season.
When you have a consolidated system, your dependency of logging into various system minimizes, which increases cash flow projections.
Limiting Your Hotel Expenses
Your focus must not only be on increasing your cash inflow but also to limit your cash outflow.
Always review and keep revisiting your costs on a regular basis and look for all the possible ways to cut down costs.
Maximize your business value out of every hotel expense, for which you have to incorporate technology to access data-driven insights on finances, so you can effortlessly manage your cash flow of your business.
Moreover, the Nimble Property consolidates and transforms the data, providing you an access to all the needful information, at your fingertips.
Implementing these significant cash flow management strategies, as a hotelier you’ll stay in control of your finances and grow your business.
The true meaning of happiness is experiencing positive cash flow, be it any business. When it comes to hotel business, it has myriad of activities running amid serving the guests. So, hoteliers need a partnership to have a pulse on the cash flow.
Hotel accounting services is what anyone can lookout for, but here the challenge is finding a tailor made and authentic one, precisely crafted for hotel industry.
The providers are never limitless in the market, but are very limited and custom made like Nimble Property.
All the successful hoteliers practice these aforementioned strategies to sustain the hard situations, which would give surprises.
Like the COVID-19 outbreak, there could be many bewildering pandemic situations that cause cash flow crisis. The sad part is, Hospitality Industry affects the most so have a back-up plan, that provides sustainability and peace of mind during the tough times.
Set goals, that are practical and achievable as they will lead you to in improving cash flow management and business success.