While managing cash well is critical for success in every kind of business, each industry will have its own unique issues to handle. The hotel business is exceptional in service industries for having a relatively low cash intake, while still having some particular cash needs and requirements.
Where Cash Comes Second
Most payments to hotels are not made in cash. Room bookings are paid by credit or debit card, either at the front desk or online when an advance booking is made. In some ways this makes it easier to manage the accounts, because money directly transfers to the hotel's bank accounts (after clearing the credit processing system, that is). But just because a hotel doesn't get paid often in cash doesn't mean it doesn't need to keep cash on hand.
Most of a hotel's cash needs have to do with outflow rather than inflow: Cash is given to customers as change, currency is exchanged as a courtesy to guests, and tips are paid out to employees.
Whether or not the hotel takes in enough cash in a day to cover all these transactions, cash must be available for when it is required. Because hotels can't rely on cash drawers being filled by customers, most rely on static cash floats of their own money in order to have cash available when needed. This cash must be tracked and taken into account just as carefully as any other service industry manages its cash.
Hotels need to be even more careful because the methods in which money comes in and goes out don't match, so there's no fast and obvious way to reconcile accounts. Without good tracking of all the money flowing into and out of the hotel, including in cash, it's impossible to tell how the business accounts stand from one day to the next.
How to Manage Hotel Cash
Taking cash seriously is the first step to managing it well in a hotel setting. Management needs to review procedures for handling, counting, and tracking cash, and make sure that all staff who are involved with it are trained in these procedures. Cash is the most difficult type of currency to track, and focusing on tracking cash will help management remove any leaks where mistakes by employees can cut into profits.
Next, the hotel needs to know where it stands by reviewing everything that is kept in the onsite vault. Finally, an automated cash management procedure can help hotels to determine how much cash they need on hand, handle it efficiently to reduce the amount of cash needed in the vault, and streamline the entire process of counting and reconciling accounts.
Automated cash management helps hotels keep better tabs on their cash floats, making sure that cash is available when and where it is needed without any of it getting lost in the shuffle and cutting into the bottom line.