The article below describes the Guest ledger account - a piece of accounting information that we regularly request from our clients.

P1: Understanding the Guest Ledger

In the case of (consumed flow) accounting integrations, a guest ledger amount is posted in the journal entry along with the other revenue, VAT, payment, and deposit amounts of that day. This guest ledger account serves as a balance account in the journal entry. Whether the guest ledger amount is posted debit or credit in the journal entry on a certain day, depends on whether revenues (incl. VAT and/or taxes) exceed payments or vice versa.

The Guest ledger account (can) consist of the following components:

  • The difference between consumed revenues and payments of in-house guests (note that in-house guests usually do not pay any amount before they check-out)

  • Any deposits made before the guest arrives

  • Revenues that have been consumed by checked-out guests which have not paid yet, i.e. invoices (or Accounts Receivable, A/R, in general)

By looking at the MEWS Accounting Report (which is the main source of information for the majority of Omniboost accounting integrations), we can quickly see the total revenue, payment, and deposit amounts (please note that not all hotels make use of deposits) for a certain day. Therefore, we can also easily determine the guest ledger amount posted in a journal entry for a certain day and also on which side of the journal entry this guest ledger amount will be posted. Generally, we can do this check by applying the logic below:

  • Revenues + VAT and/or taxes are posted on the credit side of the journal entry

  • Payments are posted on the debit side of the journal entry

We can visualize the above as follows:

Let us say that payments exceed revenues (incl. VAT and/or tax) on a certain day. This thus means that the Debit side exceeds the Credit side of the journal entry:

Debit > Credit

In order to balance this journal entry, a guest ledger amount will be posted on the Credit side of the journal entry.

Vice versa, thus in case revenues (incl. VAT and/or tax) exceed payments on a certain day, the Credit side exceeds the Debit side of the journal entry.

Debit < Credit

In order to balance this journal entry, a guest ledger amount will be posted on the Debit side of the journal entry.

Some hotels also make use of a deposit functionality which enables distinguishing deposit amounts in the MEWS Accounting report. In MEWS, deposit can be positive or negative (amounts). Depending on whether the total deposit amount on a certain day is positive or negative, this deposit amount will be posted on the debit or credit side of the journal entry. The following logic applies:

  • Total Deposit amount is positive: the Deposit amount will be booked on the credit side of the journal entry

  • Total Deposit amount is negative: the Deposit amount will be booked on the debit side of the journal entry

We can visualize this as follows:

(In case the total Deposit amount is positive)

(In case the total Deposit amount is negative)

Based on the above logic, we can look at some practical examples.

The screen image above shows the following amounts:

  • Revenues excl. taxes: 19076.28 USD

  • Payments: 13078.41 USD

  • Taxes (total): 3383.29 USD

Therefore, the guest ledger amount as calculated by our accounting integration will be as follows:

(19076.28 + 3383.29) - 13078.41 = 9381.16 USD

In the case of the above example, the revenue + tax amount exceeds the payment amount. Therefore, the guest ledger posting in the journal entry for that day will be 9381.16 on the Debit side.

A simplified visualization of the journal entry would look like follows:

Let us look at another example:

The screen image above shows the following amounts:

  • Revenues excl. taxes: 18044.15 USD

  • Payments: 29840.87 USD

  • Taxes (total): 3347.72 USD

Therefore, the guest ledger amount as calculated by our accounting integration will be as follows:

(18044.15 + 3347.72) - 29840.87 = -8449.00 USD

In the case of the above example, the payment amount exceeds the revenue + tax amount. Therefore, the guest ledger posting in the journal entry for that day will be 8449.00 on the Credit side.

A simplified visualization of the journal entry would look like follows:

To conclude, the guest ledger entry in the journal entry accounts for the difference between revenues (incl. VAT and/or tax) and payments. Therefore, the guest ledger account balance in your accounting platform will fluctuate on a daily basis.

*Please note that in the above examples, we ran the Accounting report at 12:00AM. In case we let your integration run at a a different time than 12:00 AM < > 12:00 AM, the Accounting report should also be ran at this different time.

P2: Understanding the Dynamics between the MEWS Accounting Report and Accounting Ledger

There are many hotels which find the Guest ledger amount posted in journal entries (and the Guest ledger account balance in their accounting platform in general) to suffice for reconciliation purposes. Other hotels, however, prefer additional details in the sense that they would like to have an overview showing the individual guests / items of which the Guest ledger balance in their accounting platform consists.

From an accounting perspective, this is understandable. As we have seen in the first part of this document, the guest ledger balance can consist of several parts, which are:

  • The difference between consumed revenues and payments of in-house guests (note that in-house guests usually do not pay any amount before they check-out)

  • Any deposits made before the guest arrives

  • Revenues that have been consumed by checked-out guests which have not paid yet, i.e. invoices (or Accounts Receivable, A/R, in general)

One of the things that a hotel can do in order to get a more detailed insight into the above components of which the guest ledger consists, is setting up a separate deposit ledger account in its accounting environment. When this deposit ledger account is mapped to the accounting category under which deposit amounts are posted in MEWS, the hotel will be able to have a more detailed overview of the deposit balance in its accounting platform.

Secondly, the hotel can get additional details from the Accounting Ledger in MEWS. This is where the dynamics between the MEWS Accounting report and Accounting ledger become important.

Please find some practical examples, which explains these dynamics, below.

Let us look again at the above screen image coming from the Accounting report. In the first part of this documentation, we have seen that the Guest ledger posting for this day would be 9381.16 on the Debit side. We are also able to find the amount of 9381.16 in the MEWS Accounting ledger. Note that the above Accounting Report is ran for September 11. In order to find the guest ledger amount in the Accounting Ledger, we have to run the Accounting Ledger for September 11 and September 12.

More generally, in case we would like to reconcile the Guest ledger (as found from the numbers in the Accounting Report) with the Accounting ledger for a certain day X, we have to run the Accounting ledger for that day X and the following day Y.

Please see below and note that the parameters of the Accounting ledger are set at:

Mode: Detailed

Type: General

Time: 12:00AM (please note that in case we let your integration run at a different time than 12:00 AM < > 12:00 AM, the Accounting ledger should also be ran at this different time)

Group by: Customer

Tax: Included (this is because we also included the tax amount in our Guest ledger calculation)

The column in the Accounting ledger that we should look at in order to find the amount similar to the Guest ledger amount from the Accounting Report is the ‘General ledger’ column. More specifically, we have to look at the ‘Total’ amount of this column.

Accounting ledger September 11:

Accounting ledger September 12:

Consequently, we subtract the General ledger column’s total amount on September 11 from the General ledger column’s total amount on September 12:

= (26048.54 – 16667.37) = 9381.16 USD.

By looking into the Accounting Ledger, the hotel is thus able to see a more detailed breakdown of guests which make up for the Guest ledger postings as sent over by our accounting integration.

Important

Above, the following was stated:

''The column in the Accounting ledger that we should look at in order to find the amount similar to the Guest ledger amount from the Accounting Report is the ‘General ledger’ column.''

The above still might be a bit confusing because one might ask the following; why not look at the Guest ledger column specifically (in the Accounting ledger) when reconciling the guest ledger amount as posted in the journal entry?

The can be explained as follows. The guest ledger amount as posted in the journal entry, which is based on a calculation from the Accounting report in MEWS, takes into account all items from the Accounting report. This includes both revenues and payments of in-house guests, as well as deposits. Therefore, in order to reconcile the guest ledger amount from the Accounting report with the Accounting ledger in MEWS, we need to look at the combined value of the Deposit- and Guest ledger columns in the Accounting ledger, which equals the total of the General ledger column.

There are exceptions; the case of some integrations, we should look specifically at the Deposit- and Guest ledger columns in the Accounting ledger. Examples are the Sage Intacct and M3 accounting integrations. The reason why we should look at the Deposit- and Guest ledger columns specifically in the Accounting ledger and not at the General ledger column, is simply because we have decided to send over these items separately in the journal entry instead of sending over a combined guest ledger amount (with combined we mean that deposits are included in this amount instead of distinguished).

In case you have difficulties with determining the reconciliation process for your accounting integration, please reach out to support@omniboost.io.


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