Short video by Donna Genie explaining why reservation system revenue figures differ from financial statements. Main point: reservation systems record revenue on an accrual basis tied to guest stays, while small-business tax/financial reporting often uses cash-basis accounting recognizing income when cash is received, so the two reports will differ and should not match.
Have you ever tried to compare your reservation system to your financial statements and found that those numbers are different? Well, let's talk a little bit about why that is the case. Reservation systems are built typically on an accrual basis. Not like accrual world, but accrual basis means that when you take the reservation, you haven't really earned the money until those folks arrive in your park and stay with you. Then you've earned it. So reservation systems track your revenues based on the people who are staying with you this month, this week, this day. In the financial accounting world, most taxes are prepared on the cash basis. For small businesses, that means the day you get the cash, it's considered to be income. And then the day you, those people come into you, there's really not a real significant piece except collecting if there's a remaining deposit. So it's strictly based on the bank statement. When the cash hits your account, that's when it's income. Now most people, if you have to refund that later on, that would be a reduction in your income as it goes back up. So, so those two systems are never going to be the same, and they shouldn't be the same.
