Today's Hotelier - November 2017 - 54

FINANCES

and whether union or not, they are
bought out. Usually the hotel will lose
the assistant controller or accountant
as well. From this point on their functions are performed in large part by the
outsourced vendor for a monthly fee.
From the numbers I have seen, the costs
savings in the short run are completely
upside down; in other words, no savings.
To get the outsourcing going, there is
usually an upfront one-time fee. In the
longer-term, the savings are forecast, but
they are extremely slim. We all know
what happens with cost creep. Before
we know it, we have added something
that looks almost exactly like what we
used to have. Water will always find the
lowest point.
I spoke with an experienced controller recently who had her accounts payable outsourced. She said there were
several negative aspects of the change.
Department heads and managers hate
the additional paperwork they are given,
namely scanning documents. The hotel
loses track of so many invoices that they
started logging the scans and cross referencing these with the outsourced
company. Cost creep. Vendors are up
in arms. Payments are not timely and
several vendors had demanded payment
or no delivery. A hotel without vendor
credit is not in a good position.
She also expressed concerns about
user tax being improperly assessed.
There was also confusion on her part
with the paper. The hotel still must maintain the paper for the state and municipal audits, and with the outsourced
company it is a paperless system. What
will happen when the auditors show up
and ask for documents? The last thing
she said was the most damning. The
hotel had been late paying its retail taxes
and had been assessed a fine.
Another negative result of outsourcing
the accounting function is brain drain
and the resulting challenge it creates
in succession planning. If much of the
internal accounting process is carved
out and sent to a third party, the hotel

loses the people development that propels careers in hospitality finance and
accounting. If there are no entry level
positions, no revenue auditor and no
middle management, then how does
a hotel grow controllers and directors
of finance? I have asked this question
many times, and I still do not have an
answer. This will bite our industry hard
in the future.
If hotel accounting departments are
going to take an ax to the development
pipeline, they are not going to have
financial leaders who understand the
hotel business and all its insane nuances.
I have seen several attempts to bring in
financial leaders from other industries
to lead hotel accounting functions, and
the rate of failure is high. They simply do
not get the culture, the work ethic and
the spirit of the hotel business.
Hotels are grinders. It is not a 9-5 white
collar accounting gig. It is a full-on heavy
metal jacket, boogie until you puke, get
back up again and start-all-over love
affair with the biz. If not properly trained,
super conditioned, a little bit crazy and
slightly brainwashed with the Kool Aid,
an accountant is not going to make it.
He or she will not make it through those
crazy month ends, a four-month budget
season, never-ending meetings, surprise
audits from friends at corporate, the GM
who needs a financial babysitter, the
revolving door of department managers and assistants to straighten out, not
to mention the relatively small size of
the paycheck. Hospitality already has a
huge challenge finding, developing and
retaining financial professionals, and
now the already wobbly legs have been
taken right out from underneath it.
An old general manager of mine had a
saying that he would fire at us from time
to time: "I can tell you people have a lot
of common sense, because you're not
using any!" I think that would apply here.
On the positive side, another idea
about outsourcing accounting is the
creation of a different kind of finance and
accounting leader - one who is not focused

5 4  | NOVEMBER 2017 | TODAYSHOTELIER.COM

on the accounting but who is a business
manager, thought leader and people
developer. Having a leader with knowledge of the financial mechanics at work
under the deck of the ship, who can help
to steer the other non-financial managers toward greater levels of their own
business understanding and success, is
a good thing. This in theory is exactly
what I think hotels should be doing:
developing the business skills of the nonfinancial managers. The challenge with
this idea in the outsourcing scenario
follows: Modern day hotel accounting
is a huge bunch of systems, numbers,
transactions and entries. Every time
an employee sells something, schedules someone, buys something, cooks
something, turns on the lights, takes a
payment, collects sales tax, gives credit,
checks in a room, receives goods, takes
vacation, serves someone, cleans a room,
checks out a room, takes a reservation,
makes coffee, pours a drink, fixes a
sink - I could fill the page. These "things"
I just listed result in transactions that
need to be captured, kept, managed,
budgeted, forecast, measured and, ultimately, reported. That is the mega citysized mess that lies under the deck of
the ship, tucked away from sight. If that
mess is not managed extremely well,
then your financial manager is dead on
arrival. They will have less time to be
the leader you want.
It is a given that the recoding and
management of all the processes and
systems used in the hotel need to be
right. The data that comes from these
processes is what must be captured,
measured and reported. The reporting
of this information drives the business
and decision-making. The fact is these
systems and processes are always in
need of constant and diligent attention.
There is always someone new to train.
There is a never-ending lineup of
systems to upgrade to replace the old
ones. Hotels are always playing catch
up. The staff and positions that no longer exist really handicap efforts to keep


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Table of Contents for the Digital Edition of Today's Hotelier - November 2017

Letter From the Chairman
Letter From the President & CEO
The Perfect Storm for Hotel Owners
Design That Brings People Together
New Brands Design for a New Kind of Hotel Experience
Time for a Group Sales Tune Up
AAHOA Interview
Marketing
Technology
Small Business
Finances
HR
AAHOA @ Industry Events
AAHOA Founding Members
AAHOA Vendor Partners
Classifieds
Advertiser Index
Today's Hotelier - November 2017 - intro
Today's Hotelier - November 2017 - cover1
Today's Hotelier - November 2017 - cover2
Today's Hotelier - November 2017 - 3
Today's Hotelier - November 2017 - 4
Today's Hotelier - November 2017 - 5
Today's Hotelier - November 2017 - 6
Today's Hotelier - November 2017 - 7
Today's Hotelier - November 2017 - 8
Today's Hotelier - November 2017 - 9
Today's Hotelier - November 2017 - Letter From the Chairman
Today's Hotelier - November 2017 - 11
Today's Hotelier - November 2017 - Letter From the President & CEO
Today's Hotelier - November 2017 - 13
Today's Hotelier - November 2017 - 14
Today's Hotelier - November 2017 - 15
Today's Hotelier - November 2017 - 16
Today's Hotelier - November 2017 - 17
Today's Hotelier - November 2017 - 18
Today's Hotelier - November 2017 - 19
Today's Hotelier - November 2017 - The Perfect Storm for Hotel Owners
Today's Hotelier - November 2017 - 21
Today's Hotelier - November 2017 - 22
Today's Hotelier - November 2017 - 23
Today's Hotelier - November 2017 - Design That Brings People Together
Today's Hotelier - November 2017 - 25
Today's Hotelier - November 2017 - 26
Today's Hotelier - November 2017 - 27
Today's Hotelier - November 2017 - New Brands Design for a New Kind of Hotel Experience
Today's Hotelier - November 2017 - 29
Today's Hotelier - November 2017 - 30
Today's Hotelier - November 2017 - 31
Today's Hotelier - November 2017 - Time for a Group Sales Tune Up
Today's Hotelier - November 2017 - 33
Today's Hotelier - November 2017 - 34
Today's Hotelier - November 2017 - 35
Today's Hotelier - November 2017 - 36
Today's Hotelier - November 2017 - 37
Today's Hotelier - November 2017 - AAHOA Interview
Today's Hotelier - November 2017 - 39
Today's Hotelier - November 2017 - Marketing
Today's Hotelier - November 2017 - 41
Today's Hotelier - November 2017 - 42
Today's Hotelier - November 2017 - 43
Today's Hotelier - November 2017 - Technology
Today's Hotelier - November 2017 - 45
Today's Hotelier - November 2017 - Small Business
Today's Hotelier - November 2017 - 47
Today's Hotelier - November 2017 - 48
Today's Hotelier - November 2017 - 49
Today's Hotelier - November 2017 - 50
Today's Hotelier - November 2017 - 51
Today's Hotelier - November 2017 - Finances
Today's Hotelier - November 2017 - 53
Today's Hotelier - November 2017 - 54
Today's Hotelier - November 2017 - 55
Today's Hotelier - November 2017 - HR
Today's Hotelier - November 2017 - 57
Today's Hotelier - November 2017 - AAHOA @ Industry Events
Today's Hotelier - November 2017 - 59
Today's Hotelier - November 2017 - AAHOA Founding Members
Today's Hotelier - November 2017 - 61
Today's Hotelier - November 2017 - AAHOA Vendor Partners
Today's Hotelier - November 2017 - 63
Today's Hotelier - November 2017 - 64
Today's Hotelier - November 2017 - 65
Today's Hotelier - November 2017 - 66
Today's Hotelier - November 2017 - 67
Today's Hotelier - November 2017 - 68
Today's Hotelier - November 2017 - 69
Today's Hotelier - November 2017 - 70
Today's Hotelier - November 2017 - Classifieds
Today's Hotelier - November 2017 - 72
Today's Hotelier - November 2017 - 73
Today's Hotelier - November 2017 - 74
Today's Hotelier - November 2017 - 75
Today's Hotelier - November 2017 - 76
Today's Hotelier - November 2017 - 77
Today's Hotelier - November 2017 - 78
Today's Hotelier - November 2017 - 79
Today's Hotelier - November 2017 - 80
Today's Hotelier - November 2017 - Advertiser Index
Today's Hotelier - November 2017 - 82
Today's Hotelier - November 2017 - cover3
Today's Hotelier - November 2017 - cover4
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