8 Apr 2014 Account Reconciliation Tips for Tour Operators

Like all other types of businesses, tour operators needs to reconcile their accounts to make sure that they match those on the corresponding bank statement.

Reconciling your accounts is the only way to make sure that no mistakes have been made (for example, you accidentally entered a payment for $800 when you meant $80).

But if you don’t have an accountant to take care of it for you, it can be hard.

Here are some great tips shared by the folks behind the For Dummies books.

Tip #1: Categorise your accounts

Try to divvy up your to-be-reconciled bank accounts into 3 categories:

• Must do immediately: Your main business bank accounts. Without reconciling them you can’t really rely on your financial reports.
• Do if you have time: Credit card, savings, and PayPal accounts.
• Do if you’re feeling diligent: Loan accounts!

As long as you make sure you actually get to all of them, you should be fine.

Tip #2: Know what to do when the numbers don’t add up

If your bank account doesn’t balance, there are a few things you can do to try to figure out where the error is:

• Check your opening balance is correct. Match it against the starting point of your bank statement.
• Compare magic totals. Look at the summary of total debits and total credits. If you’re doing a bank reconciliation for the same date range as this statement, you can match the totals against each other.
• Double-check amounts. Make sure that the amount of every cheque is the same in both places.
• Use the number 9 trick. Are you out by a multiple of 9? You may have put 2 numbers back to front (for example, 685 instead of 658). If you turn a number back to front and subtract the result from its original number, the difference is always exactly divisible by 9.
• Divide by 2. Try dividing your out of balance number by 2 and look for a transaction for this amount. For example, if you’re out by 90, look for a transaction of 45. It will help you locate transactions that have been entered the wrong way around (for example, a debit instead of a credit, or a payment instead of a deposit).

If you’re still at a loss, you have no choice but to painstakingly search for the source of your error. Which is why you should…

Tip #3: Automate the process

Making sure you have your process nailed down is essential to eliminating any balance sheet inaccuracies.

Try to automate any manual steps in the process that you have. While you could try to do it all by hand or in an Excel spreadsheet, manual processes leave your data open to human error.

According to AccountingWeb, “automation of the account reconciliation process is a critical step in the road to achieving ‘balance sheet integrity’.”

Do you automate agent commission reconciliation?

Reconciling the commission you pay to your agents is all part of the regular bank reconciliations you’ll be doing for your business.

You need to reconcile these accounts regularly, and continue to monitor it to make sure it matches up with your accounting records.

From your agents’ point of view, your commission is one of many other suppliers that they need to reconcile. They may have staff internally whose job it is to do this – spending up to 20 hours per week doing so!

If you don’t have software to help, it can be tough. That’s because your agent may say, “I sent you 5 bookings” but 2 of them cancelled. They then expect 5 payments and get only 3, coming back to you demanding more.

It’s a pain on both ends – your agents don’t want to deal with it, and neither do you. Automating the commission reconciliation process helps both sides save money because the numbers are more accurate, and staff can be more productive.

Rezdy’s tour booking software can manage your agent commissions for you. Take a free trial and see how it works:

Topics accounting, operations, tour operator, tourism business strategy