General vs Hospitality Accountants: Why Sector-Specific Expertise is Key to Efficiency

The hospitality industry has long been exposed to varied challenges, making relevant, up-to-date accountancy support invaluable to businesses such as hotels, restaurants and entertainment venues, for whom generalised business advice or financial management processes may be less applicable.

Specialist hospitality accountants act as business mentors and financial advisers, working with companies across each niche. They grasp the importance of informed decision-making and real-time reporting and help companies respond to changing market conditions in this fast-paced trading environment.

One of the most important factors is that your business accountancy team knows the sector inside out and can make recommendations to ensure you maximise opportunities, identify and control risks, and remain fully compliant while having the time and capacity to focus on running and sustaining a strong, viable business.

How Are Hospitality Accountants Different From Other Finance Professionals?

Accountants, tax advisers, and consultants working within hospitality don’t study an alternative qualification or accreditation and are professional accountants who can offer myriad services, from accounts preparation to tax management and audit processes to ongoing bookkeeping support.

The contrast is that a hospitality accountancy team has years of expertise within the sector, working with clients throughout each lifecycle, including ambitious start-ups and entrepreneurial businesses, as well as more established corporations, chains, and franchises.

That expertise is essential since the accounting procedures and planning you implement will often vary considerably from those in other industries, recognising aspects such as:

• Variable incomes due to seasonality or the need to manage different room rates or pricing schedules.
• The need to monitor specific variables, such as hotel occupancy levels, restaurant advance booking rates, or average spend per customer or user.
• Changing overheads, especially where seasonal or temporary workforces apply.

Hospitality accountants work efficiently to analyse risks, maximise business growth rates, and determine how best to develop your business strategy, without needing to go back to basics, learn the fundamentals of your business, or understand the pressure points you likely deal with.

For example, implementing internal controls may help streamline your operations by eliminating errors or producing regular, insightful management accounts that allow you to determine which aspects of your business are performing well and generating positive returns and those that may need attention.

The Benefits of Consulting Expert Hospitality Accountants

One of the many difficulties for business owners and managers is that hospitality businesses inherently move quickly, and their core focus is on the smooth day-to-day running of their company, dealing with customers and enquiries. These priorities apply across the board, whether you own:

• A restaurant, bar, or traditional pub
• A sporting, music or gaming venue or arena.
• A hotel, guest house or private hire residence
• A catering, décor, or entertainment service

Keeping sight of your overarching financial goals and creating a pathway to achieve those aspirations is often incredibly difficult when dealing with pressing daily tasks – but having realistic targets and identifying the factors that will help you reach them is fundamental to scalability.

Hospitality accountants could, for example, provide added-value input beyond the basics of mandatory financial reporting and tax accounting by looking at how well you are utilising annual investment and capital allowances, revisiting your business valuation, comparing financing solutions, or reconfiguring the way you track cash flow to avoid bottlenecks or arrears.

Another benefit is the ability to respond agilely when legislation changes, often affecting hospitality businesses without significant advance warning. You might be able to make tax-efficient adjustments or plan upgrades to follow reforms, giving you the space to make those changes without putting strain on your reserves.

The Role of Hospitality Business Accountants in Supporting Business Sustainability

Seasonality is inherent in the hospitality sector. Venues, restaurants, and accommodation businesses almost always have peak periods when rates are higher and occupation or booking levels are greater, counterbalanced by quiet periods of the year when they may be reliant on reserves to finance overheads.

Accountancy specialists can work with businesses to determine whether there are potential alternative revenue streams or ways to structure their financing to act as a cushion during slower months when income falls.

The key is always to monitor existing revenue streams, analyse their reliability, look for income gaps or variations in sales forecasts, and then use that knowledge to create a tailored plan that works for the business and uses its assets wisely.

While the right solutions will differ for every business, a specialist accountant and business mentor can step back from your day-to-day operations and review data and performance to determine whether there is untapped earning potential within your business.

Using Hospitality Sector Accountancy Services to Future-Proof Your Company

Businesses need to consider their preparedness for the future, which for many means a need to review controls, ensure forecasts and budgets are accurate and reliable, and look at the accounting and reporting software the business depends on.

There are numerous options, but either bookkeeping and accounting software specifically adapted for the hospitality industry or with the functionality and features to enable faster, real-time reporting and with full Making Tax Digital compatibility can be beneficial.

Hospitality operators and business owners might, for instance, require an accounting system they can access through a mobile device from any location, wish to log expenditures or review booking figures on demand, or need a solution that can track business finances on a daily basis.

Each of the services we’ve covered is available in addition to general accountancy support. This ensures that hospitality companies aren’t solely focused on filing statutory reports, scheduling audits, or submitting tax and VAT returns but have real control over their performance and are proactive and confident in making progressive changes that put them in a great position now and into the future.

For more information about hospitality accounting services, business mentoring or creating a dynamic commercial strategy, please contact the James Todd & Co hospitality specialists at your convenience.