Money in, money out — but the numbers don’t always match what you expect. That’s where guest house accounting comes in. Understanding how booking payments move between the guest, the channel, and your bank makes all the difference.
Two sides to every business.
Two sides to every business.In every business, you’ll deal with two groups of payments:
- Accounts Payable (AP): money you owe to others. For example, that bill for new bedding sits here until it’s paid.
- Accounts Receivable (AR): money owed to you. When a guest books, that stay becomes part of your AR.
What makes accommodation different?
Hospitality is unique because transactions overlap.
Imagine a guest books a room for R1,000 through an online channel that charges 10% commission:
- The channel immediately deducts R100 commission.
- You only see R900 land in your bank account.
Behind the scenes, though, there are actually two transactions:
- The guest owes you the full R1,000 (Accounts Receivable).
- You owe the channel R100 (Accounts Payable).
Your bank only shows the net R900.
Where businesses get it wrong.
Many smaller properties record only the R900 as turnover, because that’s what lands in the bank. If you’re on basic cash accounting, that can work.
But if you’re VAT registered, the rules are stricter:
- You must invoice the guest for the full R1,000 + VAT.
- You must also record the R100 + VAT commission from the channel as an expense.
- The R900 is only the net result of these two entries.
Why it matters.
If you skip this step, your VAT and turnover figures won’t balance. Reconciliation is key: you need to connect the dots between what the guest paid, what the channel kept, and what you actually got.
Think of it like baking a cake: the full cake represents the guest’s payment (R1,000). The slice taken out is the channel commission (R100). What’s left on your plate is the R900.
Your books need to show all three parts for accurate guest house accounting.
Tools that make it easier.
The tools you use to run your business should make this easier for you:
- Your booking system (like NightsBridge) takes care of the guest invoice side (your Accounts Receivable).
- Your accounting system is where you should capture the channel invoice (your Accounts Payable).
- And your payment processor (such as NightsBridge Pay) shows you how the money in your bank lines up with the invoice and commission, so you can reconcile properly.
The takeaway.
So, what’s the most important thing to remember? Don’t count only your bank balance as your turnover, especially if you’re VAT registered.
Always invoice the full guest amount, and always record the channel commission properly.
Yes, it feels like extra admin. But doing it right means you stay VAT compliant, your accountant is happy, and you avoid any nasty surprises later.