Invoicing and chasing commission hotels owe you
How a travel agency invoices hotels, lodges and tour suppliers for the commission they owe after each stay, and follows up when it goes unpaid.
By Achekam · · 5 min read · For Travel businesses in South Africa, Nigeria, Kenya
When a traveller pays a hotel or lodge directly, at check-out or on arrival, the agency that made the booking is owed commission by the property. Unlike the traveller's money, which arrives because the traveller wants to travel, that commission arrives only if someone asks for it. An agency can be owed far more by hotels, lodges and tour operators than its books show, simply because nobody invoiced it.
The fix is to treat every supplier who owes you commission as what it is in your books: a customer. This article sets out how to invoice commission in Achekam once a stay is complete, how to keep chasing it without extra work, and how to handle the bulk payments and net settlements that hotel groups prefer.
Commission earned once the guest has stayed
Most hotel and lodge agreements pay commission on completed stays, not on bookings. A booking cancelled, shortened or moved may earn less, or nothing. So the right moment to invoice is after the guest has checked out, based on what was actually consumed.
Keep a simple list of bookings where commission is due: the property, the guest, the stay dates, the room charge the commission is based on, and the commission rate in the supplier's agreement. After each check-out date, mark the booking as ready to invoice, and confirm the final stay with the property if it might have changed. That list is your commission pipeline, and it is the first thing to check if commission income looks low.
The supplier as a customer: invoicing the commission
Set each hotel, lodge or tour operator that owes you commission up as a customer, with its accounts contact and its tax number. Then invoice the commission like any other sale.
You create the invoice as a draft, with one line per stay showing the guest name, the dates and the commission, check it, and issue it. Issuing takes the next number in your sequence and posts it to the ledger as debtors, sales and output VAT. Default terms are 30 days; agree shorter terms with suppliers if your agreements allow. At the time of writing, all invoice revenue posts to one account, Professional Services Revenue (4100), so commission income lands there with any fees you invoice to travellers. If you report commission separately, agree a monthly reclassification with your accountant.
Whether VAT applies to commission, and whether commission from a supplier outside your country is treated differently, is a question to settle with your tax adviser before the first invoice. Keeping supplier money apart from your commission covers the wider picture of what counts as your income.
Issue commission invoices in batches, once a week or once a month, one invoice per supplier covering all completed stays. One invoice listing several guests is easier for a hotel's accounts team to check and pay than a stream of small ones. An issued invoice can be downloaded as a PDF on your letterhead and e-mailed from the invoice, and a failed send is reported as not sent.
Statements and automatic reminders
Commission is easy for a supplier to forget. Credit control helps here. It is on for new workspaces, and once a day it e-mails overdue reminders and a monthly statement to every customer with a balance, never charges anyone, and records whether each e-mail went out. The default reminders go at 7, 14 and 30 days overdue, with the invoice PDF attached; working e-mail settings are needed.
Because suppliers are customers in your books, they receive these reminders and statements like anyone else. Check that each supplier's e-mail address reaches their accounts department, not the reservations desk. The server also produces a statement of account as a PDF you can send whenever a supplier asks what is outstanding, and the screen shows whether it was sent. Knowing a subscriber actually got the invoice explains how to use those send records in a dispute.
Each month, review the age analysis. Receivables are aged into 0-30, 31-60, 61-90, 91-120 and over 120 days, with overdue totals. AccountingTools explains how this kind of report sorts receivables into date buckets to show what is overdue, in its definition of an aging schedule. A lodge whose commission keeps drifting into the older buckets needs a phone call to its owner, not another e-mail.
Matching payments that arrive in bulk
Hotel groups and tour operators often pay one transfer covering many commission invoices, with a remittance advice listing what it pays. Record it once in receivables and spread it across that supplier's invoices as the remittance says. A part payment leaves an invoice part-paid, and any extra is held on the supplier's account.
Do this before you reconcile the bank. Bank lines are matched by suggestion and a person accepts each match, but matching a bank receipt to an invoice does not record the payment on the invoice: it must also be recorded in receivables. Skip that, and credit control will keep reminding a supplier who has paid. How commission from insurers reaches the bank shows the same pattern in another industry.
Suppliers who settle by paying you net instead
Some suppliers prefer to settle the other way round. Where you owe a supplier for one booking and the supplier owes you commission on another, they may pay you, or ask you to pay them, only the difference.
Net settlements save a transfer but complicate the books. Both amounts still need recording in full: the commission invoice you issued, and whatever you owe the supplier. Agree with your accountant, before the first one happens, how the set-off is recorded so that both the commission invoice and the amount owed to the supplier end up showing as settled. Ask the supplier for a written statement of every net settlement, listing both sides.
This week
Go through last month's completed stays, list every booking where commission is due, and issue one invoice per supplier. Then check that each supplier's e-mail address reaches its accounts team, so the reminders do the chasing from here on.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
