Matching a hotel's asset register to the ledger
How a hotel keeps its fixed-asset register in agreement with the ledger, and how a yearly walk-round proves the beds, ovens and vehicles still exist.
By Achekam · · 4 min read · For Hospitality businesses in South Africa, Nigeria, Kenya
Ask a hotel's bookkeeper what the furniture, kitchen equipment and vehicles cost, and the ledger gives one answer. Ask the general manager to show you those assets, and the register gives another list: one that may still include a minibus sold two winters ago, or the bedroom televisions that were replaced and carried out to the skip.
AccountingTools defines a fixed asset register as a detailed listing of every fixed asset a business has acquired or built. The ledger holds the totals and the register holds the detail. When the two disagree, either the books are wrong or the list is, and in a hotel, with assets spread across rooms, kitchens, laundries, conference rooms and grounds, both happen more easily than anyone would like.
Register and ledger must tell the same story
The register records each item: what it is, what it cost, when it was bought, where it is and how it is depreciated. The ledger records the same assets in a few accounts per class, such as furniture and fittings, kitchen equipment and vehicles, each with its accumulated depreciation.
They agree only if every movement reaches both. AccountingTools says regular reconciliation keeps additions, disposals, depreciation and impairments in agreement in both records, and that the register should be reconciled to the general ledger at least monthly or quarterly, depending on transaction volume and risk. A hotel in the middle of a refurbishment has volume and should reconcile monthly; a small guesthouse that buys little may manage quarterly.
How the comparison is done
- Choose the date, normally a month end.
- Total the register by asset class: cost, accumulated depreciation and carrying amount.
- Run the trial balance at the same date. In Achekam the trial balance shows each account for a period or at a date and says whether debits equal credits.
- Compare class by class.
- For each difference, open the general ledger, which lists every posted line, and find the entries in the asset accounts that the register does not explain, or the register entries the ledger lacks.
- Correct the record that is wrong, and note who did the work and who reviewed it.
The usual culprits in a hotel are easy to recognise:
- a new mattress order coded to repairs on the supplier bill, so it sits in expenses while the register lists it, or the other way round;
- a manual journal posted straight to an asset account;
- a disposal written into one record and not the other;
- depreciation posted by hand outside the register.
A yearly walk-round of rooms, kitchen and grounds
A reconciled register can still list things that are gone. AccountingTools recommends an annual physical inventory of fixed assets to verify their existence and condition, and notes that auditors can use the register to verify the same things. A register that has been walked is one an auditor can rely on.
Plan the walk-round by area: guest rooms, kitchen and bar, laundry, conference rooms, offices, grounds and vehicles. For each area:
- print the register extract for that area;
- tick each item seen, and note its condition;
- write down anything found that is not on the register;
- use two people, one who knows the area and one who is not responsible for its assets.
The quiet season is the natural time, when rooms can be entered without disturbing guests. Tagging assets makes the walk much faster; tagging assets on the register describes how a school does it, and the method transfers well.
Missing, broken and replaced items
The walk-round produces a list of exceptions. Each one needs a decision:
- Missing. Investigate first: it may have moved to another room or property. If it is truly gone, remove it from the register as a disposal and report the loss.
- Broken beyond use. Dispose of it in the register. If it is damaged but still in use, ask your accountant whether its value needs writing down.
- Replaced. The new item was added; check the old one was taken off. A replaced fridge left on the register is the most common error of all.
- Found but not listed. Trace the purchase. If it was charged to expenses, decide with your accountant whether it should have been capitalised.
Whether a piece of spending was an asset or a repair in the first place is the subject of refurbishment: asset or repair.
Disposals and depreciation in Achekam
Achekam's fixed-asset register lets a business add assets at cost, depreciate them monthly by straight line or reducing balance with a journal each month, and dispose of them with the profit or loss posted. Because the depreciation and the disposals post from the register itself, the monthly comparison can concentrate on what reaches the asset accounts by other routes: purchases coded on bills and manual journals.
Two limits to note. The register does not work out tax wear-and-tear, which your accountant handles separately. And it is not part of Business Essentials, so check that your plan includes it. If you are still choosing between straight line and reducing balance for equipment, choosing a depreciation method sets out the difference.
AccountingTools' guide to the fixed asset register explains what a register should hold, how often to reconcile it and how auditors use it.
Run the class-by-class comparison at this month end, clear the differences you find, and put the walk-round in the diary for the next quiet month. The second time is always quicker than the first.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
