A letter to Hostel Owners
Subject: Accounting tips for the hostel owners
Accounting plays a significant role in the hostel business because balanced books can help in forecasting months financially and let you prepare for potential financial gaps.
Therefore, we’d like to share a few essential accounting tips that could help you in saving time, effort and money:
1. Open A Separate Bank Account For Your Hostel
This is the first thing you should do after opening a hostel because if you don’t do that, your hostel expenses and revenue will mix up with your personal ones. And soon, it’ll become very difficult to figure out which transaction belongs to your hostel.
Having separate bank accounts will make it easier for you to keep a check on your current cash flow too.
2. Proper Bookkeeping
Bookkeeping = Recording financial transactions.
It is a part of the accounting process in the business. And it is necessary to maintain proper and accurate records because it helps in budgeting, tax preparation, decision making, and managing finances. Moreover, it will give you peace of mind.
3. Categorize Revenue and Expenses
Highly detailed information is not required in the financial records that’s why you are advised not to keep a large number of accounts.
Categorizing revenue and expenses into a small number of accounts simplifies the information and maintains consistency as shown in the image above.
4. Don’t Lose The Receipts!
If you think that storing receipts at a safe place is not necessary, then you are wrong. Receipts are proof of expenses and warranty. It also helps in budgeting, reconciling and tax deductions.
Pro tip: Keep important receipts for at least 5 years.
5. Go Digital!
The whole world has gone digital so why haven’t you? There is no need to maintain dozens of registers. It saves a lot of space and keeps every important document safe.
One way to go paperless is by downloading the EazyPG Manager App.
EazyPG is a zero-typing mobile app that automates tenant documentation, rent collection, expense management, and complaints resolution for PG, hostel/flat owners & tenants.
We hope you liked our tips and would use it to manage your hostel’s accounts effectively.