Last updated on January 3rd, 2018 at 07:34 pm
If your guests pay online at the time of booking, you will see the paid amount registered as a prepayment in the booking. From an accounting perspective, these prepayments can be considered deposits or guarantees. Depending on your booking policy, at times the prepayment may even be refunded.
In any case, those prepayments should not be viewed as final sales until a receipt or invoice has been created, which usually happens at the date of departure.
How can I account for prepayments?
Let’s say a guest books a room online totaling $100. You are using PayPal and request a 30% deposit, so the guest pays $30. The booking is created in Sirvoy with a record of the payment received.
- By the end of the day (or month), you export a report from PayPal and give it to your accountant. The accountant records +$30 in the PayPal ledger account and indicates that the money came from the “Deposits” ledger account.
- A few months later your guest has completed their stay and is about to check out. You create a sales receipt for $100. (This is when the actual sales take place.)
- The $30 deposit recorded in the booking is now transferred to the cash receipt and used as a “payment method” to reduce the balance due. The guest only pays the remaining $70.
- At the end of the day, you export an accounting report from Sirvoy. Based on that report, the accountant records the $100 sales, and credits $30 to the “Deposits” ledger account and $70 to the “Cash” ledger account.
In other words, prepayments received through PayPal (or any other payment provider) can be recorded daily or monthly as a lump sum, using a ledger account such as “Deposits” or similar. Once a sale is finalized, often at the date of departure, the sales receipt is “paid” in part or full by using the funds available in the “Deposits” account.