Accounting For Travel Agencies: 5 Reasons to Use a Software Tailored for the Travel Industry

by François Lacoste-CPA auditeur,CA, March 21 2017
Accounting For Travel Agencies: 5 Reasons to Use a Software Tailored for the Travel Industry

A generic accounting software is unable to automate the travel agency’s accounting processes : accounting for travel agencies is a specific job!

I was appointed more than 10 years ago to computerize the accounting of a travel agency. Having no knowledge in the travel industry, I had to meet the great challenge of implementing a reliable system in order to manage all the accounting specificities of this industry. At that time, we were discussing the optimization of customer payment follow ups, commissions to be received from travel suppliers, taxes to be paid to the government, commissions to be paid to travel agents etc. 

When analysing the best IT solutions, I clearly noticed that the generic accounting software sold in retail stores were inappropriate and meant dealing with accounting gymnastics in order to obtain all the necessary accounting data related to a travel agency. A fulltime job for the  internal staff of a small travel agency! A generic accounting software is unable to automate the travel agency’s accounting processes as it has not been designed to take into account all the specificities of the travel industry.

Accounting for Travel Agencies:  A Specific Job!

An accounting software tailored to the travel industry must have these 5 benefits:

The Number 1 Benefit for an Accounting Software for Travel Agencies: Being Able to Access Detailed File History with all the Accounting Implications

A good accounting software for travel agencies has to link all the parameters set as a rule.

It is essential to be able to visualize in a file’s history all the accounting implications. What is the remaining balance owed by the customer? What is the balance to be received or  paid to a travel supplier? What is the remaining balance to be paid to travel agents to be in compliance with the travel legislation? What are the applicable taxes to be applied in a specific situation?

In the invoicing step, mainly assumed by travel agents, a reliable travel software with integrated processes will allow you to save 6 accounting entries which would have had to be done manually when using a generic accounting software.

The Number 2 Benefit for an Accounting Software for Travel Agencies: To Automate your Invoicing Process

A reliable accounting software tailored to the software industry has to be fully interfaced to a GDS like Sabre or Amadeus or booking engines (for example, SIREV for package tours in Canada, online reservation from insurance companies. Reservations made in one of these booking tools activate the automatic generation of the invoice in the accounting software and this, without any manual intervention or double data entry with all the related risks of error.

Having no mistakes on invoices is the initial guarantee for an accurate and reliable accounting.

The Number 3 Benefit for an Accounting Software for Travel Agencies: Automatically Issue Checks in a batch

The process of issuing checks is often time-consuming in a travel agency’s administration. A robust accounting software has to allow for automated check printing with the accurate data exported from the invoice while including this in the batch for several suppliers at the same time.

Otherwise, manual operations will make you re-enter data on each check while taking the chance of omitting some of the ledger entries.

The Number 4 Benefit for an Accounting Software for Travel Agencies:  To Facilitate Bank Reconciliations

A well proven accounting software for travel agencies will facilitate the preparation and the deposit management directly within the system. It can automatically generate a deposit slip you can use with your bank institution. It is  no longer necessary to fill out paper slips in parallel.

All of this will enable you to facilitate bank reconciliations with the accounting being automatically updated when transactions are made.

The Number 5 Benefit for an Accounting Software for Travel Agencies: To Generate Specific Reports Tailored to the Travel Industry

An accounting software for the travel industry must generate advanced reports that are useful and specific to the travel industry. Minimally, to make sure you can easily generate in real time:

  • Sales analysis by travel agents, by product
  • Reports related to the Consumer Protection Funds (if applicable by legislation)
  • Tax reports
  • Trust account reports
  • Commissions to be paid to travel agents

As a conclusion, the use of an accounting software tailored to the travel industry will make you save a lot of time, reduce risks of error and guarantee professionalism as part of your travel agency’s accounting management.

If you are a member of the accounting staff working internally for a travel agency, this is an essential accounting tool that will make you more productive within your organization.

If your travel agency hires an external travel accountant, he or she would love to use such a great system that reduces the workload related to his/her accounting tasks.

And less work for your travel agency also means more money in your travel agency’s pockets!

By François Lacoste, CPA, an active user of TravelWorks software

http://www.francoislacoste.com

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