Are You Financially Ready for 2026?

The 10-Point Financial and Compliance Test for U.S. Travel Advisors

The U.S. travel industry is entering 2026 with more growth opportunities than at any time since the pandemic, but the financial landscape has changed dramatically. Regulations have eased in some areas, most notably under the Corporate Transparency Act (CTA), while expectations from banks, suppliers, and payment processors have tightened.

For U.S. travel advisors, this means one thing: being financially ready is no longer just about clean books. It’s about proving your business can handle client funds responsibly, meet compliance standards, and scale with confidence.

Here’s Antravia’s 10-point test to help you evaluate whether your agency is truly prepared for 2026, whether you’re an independent advisor or a medium-sized multi-advisor agency.

1. Beneficial Ownership Information (BOI) Reporting — Exemption for U.S. Entities

The Corporate Transparency Act (CTA) has changed course in 2025. Under FinCEN’s interim final rule published March 26, 2025, all U.S.-formed companies and U.S. persons are now fully exempt from BOI reporting.

Only foreign entities registering in the United States are required to report, with deadlines of April 25, 2025 for pre-March 26 registrations and 30 days after registration for new ones.

This means most U.S. travel advisors and agencies do not need to file or update any BOI reports.

✅ Independent advisors: No filings or updates required unless your entity is foreign-registered.

✅ Medium agencies: Review prior submissions for accuracy, but ongoing updates are no longer necessary for U.S.-formed entities.

2. Business Structure - Is it fit for your next Stage?

Your structure determines how you’re taxed, protected, and perceived. Many advisors set up as LLCs during their early years, but as teams grow or services expand, that setup may no longer fit.

• Are you registered as an LLC, S corp, or sole proprietor — and is that still appropriate for your scale?

• Are all state and local business licenses up to date?

• If you operate under a host, does your contract reflect your actual control and earnings model?

✅ Independent advisors: A single-member LLC offers simplicity and liability protection.
✅ Medium agencies: Consider whether a multi-member LLC or S corp better supports payroll, investors, or brand expansion.

3. Accounting Infrastructure - Moving beyond basic Bookkeeping

As agencies handle more bookings, virtual cards, and host reports, fragmented data becomes a real financial risk. Accounting needs to match the complexity of your transactions.

• Do you use a cloud-based accounting platform (QuickBooks, Xero, NetSuite) linked to your business bank account?

• Are supplier payments, overrides, and client refunds reconciled monthly?

• Can you produce an accurate P&L, balance sheet, and cash-flow statement quickly?

✅ Independent advisors: Cash-basis accounting (per IRS Publication 538) is sufficient if every payment, refund, and commission is documented.
✅ Medium agencies: Use accrual or modified-accrual accounting for management reporting and growth forecasting.

4. Revenue Recognition - Getting it Right without Full GAAP

Most travel agencies aren’t required to follow U.S. GAAP unless they’re audited, investor-backed, or cross-border. However, GAAP principles still define best practice for financial clarity and trust.

Under ASC 606, revenue should be recognized when it’s earned — not simply when payment arrives.

• Are you reporting net commission and service fees only if you sell as an agent?

• Are refunds and overrides reflected in the correct accounting period?

✅ Independent advisors: Apply the concept even on a cash basis so record income when earned, not when deposited.
✅ Medium agencies: Follow accrual accounting and align with ASC 606 logic for consistency and credibility.

5. Client Funds - Transparency Builds Trust

Client deposits and refunds are under closer scrutiny from merchant banks and consortia. Poor visibility can lead to disputes or frozen accounts.

• Are client funds clearly traceable to each booking?

• Are refunds processed through the same payment method used for the original transaction?

• Is there written documentation for cancellations or supplier insolvency cases?

✅ Independent advisors: Keep a separate sub-account or clear ledger of deposits and refunds.
✅ Medium agencies: Maintain internal trust accounts and review policies annually with your CPA or bookkeeper.

6. Tax Exposure - Federal, State, and Local

While BOI reporting has eased, tax enforcement has intensified. States are increasingly examining whether service fees and planning charges are taxable.

• Are you making quarterly estimated payments (Form 1040-ES)?

• Are all Form 1099-NECs issued correctly to contractors?

• Have you confirmed your sales-tax nexus in each state where clients reside?

✅ Independent advisors: Review deductible expenses under IRS Topic No. 511 (Business Travel Expenses) and the IRS General Guide to Business Expenses.
✅ Medium agencies: Conduct a state-by-state tax exposure review before 2026 to avoid surprises in audits or refunds.

7. Worker Classification - Independent Contractor or Employee?

The Department of Labor’s 2024 final rule redefined how independent contractors (ICs) are classified. If you have multiple advisors, your structure needs to reflect that.

• Do you have current, signed IC agreements and W-9s on file?

• Do ICs truly control their hours and marketing?

• Are any regular, salaried team members paid as employees (W-2)?

✅ Independent advisors: If you operate solo, keep your IC agreement current with your host.
✅ Medium agencies: Reassess IC relationships annually to avoid reclassification risk.

8. Payment and PCI Compliance - Don’t overlook the Basics

Chargebacks, data breaches, and weak refund controls are now common causes of financial loss in travel.

• Is your payment processor PCI-DSS compliant?

• Are all chargeback responses supported by dated client consent?

• Have you reviewed your merchant of record obligations if processing cards directly?

✅ Independent advisors: Use PCI-compliant platforms such as Square, Stripe, or TravelJoy.
✅ Medium agencies: Complete annual PCI self-assessments and ensure card data isn’t stored manually.

9. Financial Oversight - Think like a CFO

Even small travel businesses need financial oversight beyond bookkeeping. Understanding what drives profit allows better decisions about fees, hiring, and supplier mix.

• Do you prepare monthly management accounts with variances and commentary?

• Is there a cash-flow forecast for the next three months?

• Are key ratios like commission margin or cost-to-income reviewed quarterly?

✅ Independent advisors: A simple spreadsheet forecast is fine — but maintain it consistently.
✅ Medium agencies: Build a regular reporting pack and track trends by destination, supplier, and advisor.

10. Record Retention and Audit Readiness

Digital audits and AI-driven compliance reviews are becoming normal. Staying ready is about clear documentation, not paper storage.

IRS guidance recommends keeping tax-supporting records for at least three years, extended to six years for substantial understatements and seven years only for bad-debt or loss claims. Many advisors use seven years as a conservative standard.

• Are receipts, statements, and contracts stored digitally by month?

• Are reconciliations and approvals documented?

• Could you evidence ownership, accounting methods, and tax filings on request?

✅ Independent advisors: Retain three years as a minimum, seven as best practice.
✅ Medium agencies: Implement structured retention policies and quarterly control reviews.

Why this matters

The 2025 BOI exemption removed a paperwork burden — but the bar for financial professionalism is now higher. Advisors who manage finances with clarity, discipline, and documentation will earn trust with hosts, banks, and suppliers.

Independent advisors who maintain clean books and transparent reporting strengthen their credibility with hosts and lenders.
Medium agencies applying GAAP-level structure and oversight prepare themselves for partnerships, financing, or sale.

At Antravia, we work with U.S. travel advisors to strengthen accounting systems, ensure compliance, and build financial resilience for the future of travel.

See how your business scores on the 10-point test at Antravia.com.

References

• Financial Crimes Enforcement Network (FinCEN). Corporate Transparency Act – Interim Final Rule Exempting U.S. Entities from Beneficial Ownership Reporting, March 21 2025. https://www.fincen.gov/boi

• Internal Revenue Service (IRS). Publication 583: Starting a Business and Keeping Records (2025). https://www.irs.gov/publications/p583

• Internal Revenue Service (IRS). Topic No. 511 – Business Travel Expenses; General Guide to Business Expenses (2025). https://www.irs.gov

• Internal Revenue Service (IRS). Publication 538: Accounting Periods and Methods. https://www.irs.gov/publications/p538

• Department of Labor (U.S.). Employee or Independent Contractor Classification Under the Fair Labor Standards Act – Final Rule (2024). https://www.dol.gov

• Federal Reserve Banks. Small Business Credit Survey – 2025 Report on Employer Firms. https://www.fedsmallbusiness.org

Disclaimer:
Content published by Antravia is provided for informational purposes only and reflects research, industry analysis, and our professional perspective. It does not constitute legal, tax, or accounting advice. Regulations vary by jurisdiction, and individual circumstances differ. Readers should seek advice from a qualified professional before making decisions that could affect their business.
See also our Disclaimer page