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In an industry as dynamic and people-oriented as the hospitality sector, hotel managers are often in a race against time to balance guest satisfaction, operations management, and, of course, the bottom line. A key component of a successful hotel operation is effective expense management – accounting for all costs incurred, tracking where the money is going, and ensuring accuracy for optimal financial health. Automating the typically time-consuming expense reporting process can save countless hours and prevent errors. This guide is created to assist you in building an automated system that seamlessly integrates into your hotel's workflow.

Step 1: Choose the Right Expense Tracking Software

Selecting suitable software is the keystone of automating expense reporting. Your software should not only track expenses but also integrate with other financial tools and provide robust reporting features. Here's how to find it:

Research and Evaluate Your Options

Start by looking at various expense tracking software solutions tailored to the hospitality industry. Check for user reviews, forums, and software comparison sites to gauge customer satisfaction and feature sets.

Identify Key Features

Make a checklist of features that are non-negotiable for your hotel. This might include real-time tracking, receipt scanning, mobile app availability, multi-currency support, and policy enforcement capabilities.

Compatibility and Integration

Ensure the software is compatible with your existing systems, including Point-of-Sale (POS) systems, credit card processors, and accounting software. Integration ensures a smooth flow of financial data.

Step 2: Set Up Expense Categories

Categorization is crucial in expense tracking for both reporting and analysis. Designing an effective categorization system upfront will make tracking and analysis more straightforward down the line.

Customize Categories to Fit the Hotel Industry

While some categories may be universal, like accommodations and food and beverage, you may need others such as maintenance, repurposing, or local community development. Tailoring these categories to your hotel's specifics is essential.

Create a Comprehensive List

Don't shy away from a detailed list. The more specific your categories, the more precise your financial reports will be. Create parent and sub-categories to capture each expense accurately.

Step 3: Establish Approval Workflows

A streamlined process with clear approval flows ensures that expenses comply with your hotel’s policies and financial regulations.

Define Approval Protocols

Decide who needs to approve expenses. For small expenses, a department head may suffice, while larger budgets might require sign-off from the General Manager or CFO.

Digital Signatures and Notifications

In your expense reporting system, use digital approvals to maintain a paperless approach, and set up notifications to remind approvers of pending tasks.

Compliance Rules

Define spending limits and rules for when exceptions can be made, and ensure these are easily enforceable by the software platform.

Step 4: Train Staff on Expense Reporting Procedures

Transitioning to automated expense reporting will require your team to understand and engage with new software.

Provide Comprehensive Training

Develop training materials and sessions that cover every aspect of the new software, from basic logging in to advanced reporting. Make the training continuous to incorporate software updates and refreshers into the process.

Emphasize Timeliness

Stress the importance of reporting expenses promptly. This not only maintains financial transparency but also allows for more accurate real-time reporting.

Step 5: Implement Receipt Capture and Integration

Capturing and storing receipts electronically is a significant step toward a completely automated system.

Integration with POS Systems

When a guest checks out of the hotel or uses hotel amenities, the expenses should be directly captured and synced with the expense tracking system.

Mobile Receipt Capture

Encourage employees to use the software’s mobile app to snap photos of paper receipts, ensuring no expense goes untracked.

OCR Technology

If your chosen software offers Optical Character Recognition (OCR), use it to read and categorize receipts automatically, saving even more manual labor for your staff.

Step 6: Monitor and Analyze Expense Data

The true power of automation lies in the ability to see and understand expenses from a high level, enabling smart monetary decisions.

Regular Reviews

Set a schedule for regular expense report reviews to catch any anomalies early.

Spend Analysis

Leverage the software's reporting features to analyze spending trends over time, allowing you to spot areas where costs can be reduced or resources reallocated.

Real-time Reporting

Utilize the feature for real-time expense reporting to stay on top of your financial health without delay.

Conclusion: The Benefits of Automated Expense Reporting

By creating an automated expense reporting system for your hotel, you reduce the risk of human error, save time on manual data entry, and gain powerful insights into where your money is going. This enables you to make informed decisions that can positively impact your hotel's profitability and streamline your operations.

Encourage your team to embrace these changes not as a challenge, but as an advancement in your collective pursuit of financial efficiency. Involve them in the process, listen to their feedback, and celebrate the smoother and stress-free expense management system you've built together. Your hotel deserves this upgrade, and its financial future will thank you for it.

Head of SEO, Ramp

Shaun Hinklein is the Head of SEO at Ramp. Prior to Ramp he built and executed SEO campaigns for Squarespace, Walmart, and Comic Con. Graduating from Rutgers University with a Journalism degree Shaun began his career at MTV News where he became responsible for maintaining Wordpress websites and gaining traffic to them. Learning SEO as a way to achieve that goal, Shaun built dozens of specialized websites for agencies, record labels, and nonprofits before starting his startup career at an incubator in Brooklyn. There he would accept the responsibility of leading SEO at , which would later be acquired for $3.3B by Walmart. When not solving SEO puzzles or building growth campaigns Shaun is scoring music for independent games from his home office in Red Bank, NJ.

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