Accounting Guide for Hotel Owners, B&Bs, and Short-Term Rentals

Introduction

Running a hotel, guesthouse, or short-term rental business is not just about filling rooms or delighting guests but behind every successful property is a clear and disciplined approach to accounting. Without this, margins quickly erode, bills go unpaid, and expansion plans stall. This guide sets out the accounting foundations that every hotelier, innkeeper, or rental host should know. Whether you run a ten-room boutique, a countryside B&B, or a portfolio of Airbnb listings, the principles are the same: structure your accounts properly, track revenue and costs accurately, and stay ahead of compliance obligations.

1. Setting up the right Accounting Structure

• Chart of accounts tailored to hotels: rooms, F&B, bar, spa, ancillary services, commissions, taxes.

• How to treat deposits, prepayments, and cancellations so revenue is only recognized when earned.

• Why splitting revenue categories is essential for tracking profitability (room sales vs restaurant vs extras).

2. Choosing the Right Accounting System

• The right system depends on your size and complexity.

• Small hotels and B&Bs often manage with cloud systems (QuickBooks, Xero).

• Larger independents benefit from PMS-linked accounting modules.

• Avoid spreadsheets as a long-term solution.

• → For a detailed breakdown, see our dedicated blog: Choosing the Right Accounting System for Your Hotel.

3. Daily Accounting Basics

• Recording daily sales by revenue stream.

• Reconciling OTA and channel manager reports with bank deposits.

• Cash handling and credit card controls (still common pitfalls for independents).

• Handling chargebacks and refunds correctly.

4. Occupancy and Hotel-Specific Taxes

• Occupancy or tourist taxes are pass-through liabilities, not revenue.

• Correct treatment in your accounts prevents inflated sales figures.

• Importance of clear communication to guests and avoid disputes when charges appear at check-in.

5. Payroll and Staffing Costs

• Seasonal staff management, overtime, and service charges.

• Accounting for tips and gratuities.

• Allocating payroll costs to departments (front office, housekeeping, F&B).

• Payroll system integration with your accounting platform.

6. Short-Term Rentals (Airbnb, Vrbo, etc.)

• How to handle split revenue streams (platform vs. direct bookings).

• Accounting for cleaning fees, commissions, and service charges.

• Local sales and lodging taxes must be tracked and filed — requirements vary by jurisdiction.

• Separating personal vs. rental use of a property to keep accounts accurate.

7. Fixed Costs and Capital Expenses

• Managing utilities, insurance, licenses, and marketing as recurring costs.

• Recording major refurbishments or renovations as capital expenses rather than operating costs.

• Using depreciation to spread the cost of furniture, fixtures, and equipment.

8. Financing and Debt

• Many hotels and B&Bs rely on loans or mortgages.

• Accounting correctly for loan repayments vs. interest expense.

• Understanding debt service coverage and can the business meet its financing obligations?

• Importance of cash flow planning when loan repayments rise.

9. Inventory and Cost of Goods

• Food, beverage, and minibar stock control.

• Accounting for linens, guest amenities, and cleaning supplies.

• Spotting wastage, theft, or over-ordering that eats into margins.

10. Owner Withdrawals and Personal Expenses

• Common trap: mixing personal and business funds.

• Why a separate business bank account is essential.

• Accounting treatment for drawings vs. legitimate business expenses.

• Transparency protects you if audited or when seeking financing.

11. Financial Reporting

• Key hotel metrics: Occupancy rate, ADR (average daily rate), RevPAR.

• Cash flow forecasts to handle seasonality.

• Spotting breakage: unbilled extras, missed OTA invoices, incorrect charges.

• Monthly reconciliations as the minimum standard.

12. When to get Professional Help

• Difference between a bookkeeper and an accountant.

• Outsourcing vs. in-house accounting support.

• Knowing when complexity justifies professional help — tax compliance, financing, or expansion planning.

Conclusion

Accounting should sit at the heart of every hotel or rental business. Clear structures, accurate records, and disciplined reporting are what turn occupancy into profit. Whether you run a family B&B or a growing independent hotel, following these accounting principles will help you avoid costly mistakes and build a business that can withstand seasonality, market shocks, and growth demands.

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