Key Steps
1. Accessing the Settings Page 0:03
Navigate to the Settings page located at the bottom of the menu.
Select Reservations from the options available.
2. Understanding Default Revenue Recognition 0:12
Default revenue recognition determines when the reservation amount is recorded as receivable in the general ledger.
This is crucial for accurate accounting and reporting.
Reservation journal entries are created in the general ledger at the time of booking, but the effective dates of the journal entries (for accounting and reporting purposes) are determined by your revenue recognition configurations.
3. Selecting Default Revenue Recognition Method 0:31
On this Reservations page, locate the drop-down list next to Default Revenue Recognition.
Choose one of the following options:
Check-in: Revenue recognized on the check-in date.
Check-out: Revenue recognized on the check-out date.
Booked-at: Revenue recognized on the booking date.
Pro-rata: Revenue split evenly across each night of the stay.
4. Setting Revenue Recognition by PMS Line Type 1:04
If needed, override the default for specific revenue lines by selecting the appropriate PMS line type.
For example, to set cleaning fees differently:
Select the Cleaning Fee revenue line.
Open the drop-down menu and choose the desired revenue recognition method.
Reservation Line Revenue Recognition defines the date on which revenue from each reservation line is deemed earned. This is the date on which the amount of the reservation line is recorded in the general ledger.
5. Understanding Timing Differences and Deferred Revenue 1:27
Be aware that if the default revenue recognition date differs from the reservation line revenue recognition date, it results in deferred revenue.
Ensure that the general ledger account for deferred revenue is set correctly on the accounts page.
Timing differences arising from differences between the default revenue recognition date and the reservation line revenue recognition date are recorded as deferred revenue. The general ledger account in which deferred revenue is tracked over time is determined by the Deferred Revenue assignment.
6. Example of Revenue Recognition 1:38
Consider a scenario:
Guest checks in on December 30 and checks out on January 2.
Total rents: $1,000; Cleaning fee: $200.
If default is set to Check-in and cleaning fee is set to Check-out, the following would be recorded in the general ledger:
December 30
Debit - Guest Deposits (net of A/R) $1,200
Credit - Rents $1,000
Credit - Deferred Revenues $200
January 2
Debit - Deferred Revenues $200
Credit - Cleaning Fees $200
Given the respective dates of the above general ledger journal entries, $1,000 of Rents will appear on the owner's December statement, while $200 will appear on the owner's January statement, assuming no further revenue share settings are configured on the Fees and Commissions page.
7. Finalizing Revenue Recognition Settings 2:09
Remember, once the first financial statements are published, revenue recognition settings cannot be changed.
These options will be grayed out and locked.
Cautionary Notes
Ensure that you understand the implications of each revenue recognition method before making a selection.
Changes to revenue recognition settings are not allowed after the first financial statements are published.