While running a travel business or a travel agency sounds fun and lot of travel agents are experts in all things travel and do not break a sweat when creating long itineraries or conducting intensive tours/ trips; a lot of them put up their hands when it comes to accounting. Number crunching may not be fun but it is one of the integral pillars of a healthy travel business. In fact, they say that the financial health of a travel agency is the key to the survival of travel agents in the long run. Analyzing and controlling finances of your travel business leads to strong plans and better strategic decisions.
Now that we have established that accounting is an important part of running any business, especially travel companies, the question is are we handling accounting the right way?
It is difficult to gauge this with the same metric as different travel agents have different ways of doing it. Some still use good old-fashioned ledgers and accounting books to manage their finances, while other travel agents have moved on to using excel sheets to maintain their accounting records. Manual operations will make you re-enter data on each check while taking the chance of omitting some of the ledger entries. Using excel sheets for accounting is far easier and more reliable than physical accounting records. However, both the ways are cumbersome and time consuming for a travel agent if seen from an execution point of view.
Of course, travel agents don’t have to do all this by hand or in Excel spreadsheets alone. There are already specialized online travel solutions in the market. The well established travel agents may also use software like tally that can not only help in maintaining accounting records but also help to do more like invoicing, reconciliations etc.
Further, it is good to note that not every accounting software is apt for a travel agency. There are a few needs that are specific to a travel agent and may not be covered in the features that may get with a ready to use accounting software available freely.
Here is a short but not exhaustive, list of the must-have features a travel agency accounting platform should include:
2. Inventory management and tracking
3. Bank reconciliations
4. Data security
5. Travel agent commission management
6. Sales analysis
7. Voucher creation
8. Supplier data handling
Your accounting software should have features to address questions such as: How much has the customer paid and how much is the remaining balance? 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? Etc.
How do I know that my accounting software is working fine for my travel agency?
Having no mistakes on invoices is the initial guarantee for an accurate and reliable accounting. As you keep using the software, it should keep reducing your work in accounting, reduce back and forth with your travel suppliers/ banks and make the whole process faster and easier.
Again, using an accounting software, custom made for the travel industry will make a travel agent save a lot of time, reduce risks of error and guarantee professionalism as part of your travel agency’s accounting management.
And less work for a travel agent in administrative and accounting works also means more money in his/her travel agency’s pockets because every minute gained, is a minute more you can spend in getting more business!
There are other ways to save time and at the same time boost revenue for a travel agent. Read more on How to increase your Travel Agency Revenue through a customer loyalty program.