Room-nights, venue hire and deposits in the ledger
How room-nights and venue hire post to their own revenue accounts in Achekam's Hospitality pack, and how deposits are held until the stay or event.
By Achekam · · 4 min read · For Hospitality businesses in South Africa, Nigeria, Kenya
Launching soon. The Industry CRM add-on described in this article is launching soon. This article describes it as it will work at launch.
A country hotel earns money in two very different ways: guests sleeping in its rooms, and organisations hiring its venue for conferences and weddings. The owner wants to know how each side is doing. The accountant wants to know something harder: the deposit a couple paid in March for a December wedding, is that March's income or December's?
Books that lump everything into one sales account cannot answer the first question, and books that count every deposit as income the day it arrives give the wrong answer to the second. Achekam's Industry CRM, with the Hospitality & hotels pack, addresses both. This article explains how, for hotels, lodges and venues in South Africa, Nigeria and Kenya.
Two revenue accounts for two businesses
Switching on the Hospitality pack adds the industry's revenue accounts to your chart of accounts:
- Accommodation (4290), for room-nights and related charges.
- Events and venue hire (4300), for conferences, functions and equipment.
If your chart already uses one of those codes for a different type of account, the activation is refused and names the account in the way, so you can rename or renumber it first. Ask your accountant to look before you switch the pack on.
Separate accounts make the management accounts readable. A month in which room revenue fell while events grew tells a very different story from one where both fell, and one sales line hides the difference.
Starter items for rooms and events
The pack's starter catalogue lists room-nights, an extra person, a day conference package, venue hire and equipment hire. None of them has a price; you set your own.
Room items post to Accommodation and event items to Events and venue hire. Before using them, set your rates, and agree with your team which item to use for each thing you sell, so the same kind of charge always lands in the same place.
Invoice lines that name the account
Every invoice line names the revenue account and the product it sells, so revenue is posted to the account that belongs to it, and cost of sales goes into the same journal where there is one. Issuing an invoice posts it to the ledger as debtors, sales and output VAT.
In practice, a conference invoice with a day package, an overnight room for the speaker and a projector hire splits itself across the two accounts without anyone choosing an account by hand. That is what makes the split reliable: it does not depend on whoever raises the invoice remembering which account to use.
Recording a deposit and how it was paid
When a guest or event organiser pays a deposit, staff record it and how it was paid. Be precise about the method, whether a card payment on a pay link, a bank transfer or mobile money. When a deposit is queried months later, the record of how it arrived is the first thing anyone asks for.
Keep the deposit tied to the booking or event it belongs to. A deposit that cannot be matched to a date is a deposit nobody can account for properly.
Deposits held until the date
A hospitality deposit is held as deferred revenue until the stay or the event.
In plain terms, a deposit received in March for a December wedding sits in the books as money received for something not yet delivered. It is not counted as March's revenue. When the wedding takes place, it becomes revenue for that period. The March management accounts no longer look flattered by money that has not been earned, and December's show the wedding as the income it is. Investopedia explains why payment received in advance is a liability until the service is delivered, and how it is then recognised as revenue.
This also makes cancellations clearer. If a booking is cancelled before the date, the deposit is still sitting there as an amount held, and how much of it is refunded and how much is kept is a decision under your booking terms, not a reversal of income already reported. Agree with your accountant how a kept deposit should be treated in your books.
If you have been invoicing deposits as ordinary sales, as described in group booking deposits without a pro-forma, talk to your accountant about the deposits already in your books before you start, so the old and new treatments do not overlap.
What changes for your accountant
| Before | After |
|---|---|
| All invoice revenue in one account, Professional Services Revenue (4100) | Accommodation and events revenue in separate accounts |
| A deposit invoice posted as sales when issued | Deposits held as deferred revenue until the stay or event |
| Account chosen by whoever raised the invoice | Account set by the item on each invoice line |
At month end, your accountant will want to review the deferred revenue balance against the list of future bookings and events with deposits paid. Every amount held should belong to a date still to come. Anything held for a date already past needs looking at, as does a future booking that should have a deposit and shows none. A quick month-end routine is to list every deposit held, tick each one off against the reservations and events diary, and ask about anything that does not match.
The cost side follows its own route; paying food and beverage suppliers in parts covers supplier bills, and weekly pay runs for casual and shift staff covers the wage bill that events and busy weekends bring.
Have your accountant check the chart for clashes with 4290 and 4300, price the starter items, and list the deposits you currently hold with their dates. With that done, the next set of management accounts can show what the rooms and the venue each earned, in the month they earned it.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
