How are accounting firms helping the travel business to handle the COVID-19 situation?

In the middle of the coronavirus pandemic, many industries have been affected. The effect was felt across the whole economy of Australia. The travel industry was no exception. Some agencies have closed while some reduce their employees. A lot experienced stress and depression. This brought worry to a lot of individuals. Many have sought help from professional counsellors to be able to get through their fears and negative feeling conveyed by the coronavirus and help themselves adjust and still have a positive outlook despite the negative situation.

Aside from job losses and operation suspension, the pandemic also has affected accounting and financial reporting for many companies, including travel agencies. Because of the situation, the sales, cash flow and other business operations were strained. Also, there are constraints on some materials that creates doubt whether the travel agency can continue to operate or not. Bookkeepers need to make adjustments on their reporting and show how their financial status has been affected by the pandemic. This has been an ongoing concern because travel agencies still need to keep their financial records up to date.

Travel agencies in Australia need to keep track of accounting records, even amidst the situation. They need to keep track of these records because it is required in filing tax returns. Also, preserving a history of all accounting transaction will help them see how their agency is performing.

There are important procedures that a travel agency must give importance to. These are:

  • Cash Flow Management
  • General Ledger
  • Revenue
  • Statement of Income

Cash Flow Management – This is about how much money is going into and out of your travel agency. Bookkeepers will monitor, analyse and optimise the cash that your agency is receiving minus the expenses. You may not know it, but well-managed cash flow has a great impact on your bottom line. Running a travel agency means there will be multiple transactions on a daily basis. It’s easy to lose track of everything. Losing control over money has made a lot of entrepreneurs out of business. It’s very important to give attention to the cash flow as it’s a way to measure the financial health of your business. If you notice that your agency is spending more than what you are earning, then you have a cash flow problem.

For travel agencies in Australia, the aspect of cash flow management is essential to avoid cash shortage. Your travel agency won’t stay long if you can’t pay the bills needed to operate your business.

General ledger – this is atoll used by travel agencies to represent the financial record of the business. It includes information about your assets, liabilities, revenues, debits and credits. All business transactions must be recorded on the ledger through the use of accounting software.

You may be thinking that a travel agency is a small business that would not be a general ledger. You may be doing just fine without it. However, if you have a general ledger in your travel agency, you will have an accurate record of all financial transaction made while running your agency. Filing tax returns will be much easier because income and expenses will be stored in one place. The reports will help you stay on top of your spending to avoid shortage. Overall, it can be considered as a powerful tool that has a lot of compelling benefits for your travel agency business.

Revenue Recognition– it’s considered to be the most important accounting procedure not only in a travel agency but across all industry. However, it remains to be a big challenge for many business owners. Revenue recognition is identifying when the travel agency actually earned its revenue.

The moment your agency receives payment from your customer, you should be able to figure out your revenue even if the service has not been completed yet.

Statement of Income – it is a financial statement that shows the profit and loss of the travel agency. It serves the same purpose of cash flow statement, and it’s just that cash flow keeps tracks of the cash while the income statement also shows the profit.

The statement of income will show you the revenue, expenses and the resulting net or loss over a period of time. A transparent and accurate income statement will help you understand your agency’s overall profitability.

Accounting and bookkeeping transaction is hard to keep up within your travel agency business, especially if you are too busy running it. If you want to keep track of every financial record of your travel agency, then you need a qualified sydney bookkeeper to the accounting task for you. With their help, you’ll be able to get to know your business and the challenges you may be facing. You’ll have peace of mind knowing that you are maintaining a healthy relationship with the important numbers in your industry.

When you are running a travel agency, your focus should be making profits. This will all start if you know the correct numbers and base your decision from them. Hiring booking services will help you get the right accounting procedure for your travel agency. You can get complete and accurate financial reports without having you deal with complicated tasks. It would help if you focus your time and effort in providing customer service and taking care of your customers while letting the experts handle the accounting job for you.