# Hotel accounting: a practical setup for Indian hotels, in Tally Prime or Zoho Books

> Hotel accounting is ordinary bookkeeping with a few twists: revenue every night, guests who pay before, during and after the stay, and OTAs that settle weeks later. Here is how to set it up, which Tally group each hotel expense goes under, and the daily and monthly close.

- URL: https://guesthawk.com/guides/hotel-accounting
- Category: Finance
- Tags: Accounting, GST, Invoicing
- Published: 11 November 2026
- Updated: 11 November 2026
- Publisher: GuestHawk (https://guesthawk.com)

A hotel earns revenue every night, takes advances weeks before arrival, lets guests run up restaurant bills on their room, and waits a month for the OTAs to settle. **Hotel accounting** is ordinary double-entry bookkeeping built to handle that. Get the setup right once and the month closes in a day. Get it wrong and your accountant spends the first week of every month guessing which UPI receipt belongs to which guest.

This guide explains what is different about accounting in the hotel industry, the USALI layout used for hotel reporting, a ledger map for TallyPrime (it works the same way in Zoho Books), a worked day's entries and a daily and monthly close checklist. Your CA should approve the final chart of accounts and every tax treatment.

## What is accounting in the hotel industry?

The basics are the same as any business: income, expenses, assets, liabilities, GST and income tax. Four things make a hotel different.

- **Revenue is earned nightly.** A guest staying four nights generates four nights of room revenue, not one sale at checkout. The end-of-day close posts each night's charges to the guest bill (folio).
- **Money arrives at different times from revenue.** An advance paid by UPI a month ahead is a liability until the guest stays. A company that pays thirty days after checkout is a debtor. An OTA that collected from the guest owes you the net amount after commission and taxes.
- **Several departments sell.** Rooms, restaurant, banquets, laundry and cabs each have revenue and costs. Owners want to know which ones earn money.
- **Tax depends on the room rate.** Rooms at ₹7,500 a night or less carry 5% GST without input tax credit; above ₹7,500, 18% with credit. The rate decides whether GST on your purchases is a credit or a cost. See [GST on hotel rooms and restaurants](https://guesthawk.com/guides/gst-on-hotel-rooms-and-restaurants).

## USALI basics: the hotel's operating statement

The Uniform System of Accounts for the Lodging Industry (USALI) is the standard layout for a hotel's operating statement. It was first published in 1926 and is revised by a Global Finance Committee sponsored by HFTP and the American Hotel and Lodging Association. The 12th Revised Edition has an adoption date of 1 January 2026.

USALI does not replace Indian accounting standards, the Companies Act or tax law. Your statutory accounts still follow those. What USALI gives you is a management report that any hotel owner, banker or operator can read, laid out in this order:

1. **Operated departments.** Rooms, food and beverage, other operated departments. Each shows revenue, its own costs and its departmental profit.
2. **Undistributed operating expenses.** Administration and general, information and telecommunications, sales and marketing, property operation and maintenance, utilities.
3. **Gross operating profit (GOP).**
4. **Management fees and non-operating items.** Rent, property tax, insurance.
5. **EBITDA**, and below it depreciation, interest and tax.

You do not need USALI's full detail in a 20-room hotel. But if you set up your ledgers and cost centres along these lines, a management report in this shape falls out of your books every month. Our guide to [hotel profit margin](https://guesthawk.com/guides/hotel-profit-margin) shows a 20-room statement in this format.

## Hotel accounting in TallyPrime: groups and ledgers

TallyPrime comes with 28 predefined groups: 15 primary groups and 13 sub-groups. You create a ledger for each item and place it under a group. The group decides where it appears: in the profit and loss account or the balance sheet. Tally's own help describes Indirect Expenses as the group for administrative, selling and other non-direct expenses, and Direct Expenses as costs that determine gross profit.

Use **cost centres** for departments (Rooms, Restaurant, Banquets, Administration) so the same ledger, for example salaries, can be split between departments for the USALI report.

### Hotel expenses under which head in Tally

This map is common practice, not Tally guidance: Tally does not prescribe hotel heads. Agree it with your CA, then keep to it every month so the figures compare.

| Item | Ledger example | TallyPrime group |
| --- | --- | --- |
| Room nights sold | Room revenue | Sales Accounts |
| Restaurant and room service | Food and beverage revenue | Sales Accounts |
| Banquet hire, laundry, cabs | Other operating revenue | Sales Accounts |
| Food, beverages, groceries | Food and beverage purchases | Purchase Accounts |
| Guest supplies, linen replacement | Guest supplies | Indirect Expenses (or Direct Expenses) |
| Salaries and wages | Salaries, by department cost centre | Indirect Expenses (or Direct Expenses) |
| Electricity, water, gas, diesel | Power and fuel | Indirect Expenses |
| OTA commission | OTA commission | Indirect Expenses |
| Rent for the building | Rent | Indirect Expenses |
| Repairs, AMCs, pest control | Repairs and maintenance | Indirect Expenses |
| Bank and payment gateway charges | Bank charges | Indirect Expenses |
| Furniture, ACs, kitchen equipment | Furniture and fixtures, plant and equipment | Fixed Assets |
| GST charged on bills | Output CGST, Output SGST, Output IGST | Duties & Taxes |
| TDS you deduct from suppliers | TDS payable | Duties & Taxes |
| Advances from guests | Guest advances | Current Liabilities |
| Money owed by companies and OTAs | One ledger per company and OTA | Sundry Debtors |
| Money owed to suppliers | One ledger per supplier | Sundry Creditors |
| Cash at the front desk | Front desk cash | Cash-in-hand |
| UPI and card settlements | UPI clearing, card clearing | Bank Accounts (or Current Assets) |
| Deposit paid to the landlord | Rent deposit | Deposits (Asset) |
| TDS and TCS deducted by OTAs | TDS receivable, TCS receivable | Loans & Advances (Asset) |
| Bank term loan | Term loan | Secured Loans |

For TDS you deduct on rent, contractors and professional fees: from 1 April 2026 these provisions sit in the Income-tax Act, 2025. Ask your CA which payments need TDS and at what rate. For the deductions OTAs make from your payouts, see [TDS and TCS on OTA payouts](https://guesthawk.com/guides/tds-tcs-on-ota-payouts).

## A worked day's entries

An illustrative day at a 20-room hotel whose room rates are all ₹7,500 or less, so rooms and the restaurant both carry 5% GST. Thirteen rooms were sold at ₹2,200, and the restaurant sold ₹6,000 of food before GST. Two of the thirteen rooms were OTA bookings paid to the OTA.

**1. Revenue for the day (a sales voucher from the end-of-day report)**

| Ledger | Debit | Credit |
| --- | --- | --- |
| Guest ledger (control) | ₹36,330 |  |
| Room revenue (13 × ₹2,200) |  | ₹28,600 |
| Food and beverage revenue |  | ₹6,000 |
| Output CGST (2.5%) |  | ₹865 |
| Output SGST (2.5%) |  | ₹865 |

**2. Payments for the day (a receipt voucher)**

| Ledger | Debit | Credit |
| --- | --- | --- |
| Front desk cash | ₹8,000 |  |
| UPI clearing | ₹16,000 |  |
| Card clearing | ₹7,710 |  |
| OTA receivable (two rooms with GST) | ₹4,620 |  |
| Guest ledger (control) |  | ₹36,330 |

When the UPI and card settlements reach the bank, a contra entry moves them from the clearing ledgers to the bank, and the gateway's charges go to bank charges. When the OTA pays, the payout settles the OTA receivable, with commission, GST on commission and the TDS and TCS deducted posted to their own ledgers. Any difference left in a clearing ledger at month-end is something to investigate, not to write off.

Your CA will decide whether you post one sales entry per GST invoice or a daily summary backed by the invoice register; the choice depends on your GST returns and the volume of invoices. Either way, the totals must agree with your invoices. See [hotel GST invoice format](https://guesthawk.com/guides/hotel-gst-invoice-format).

> **Keep one guest ledger, not one ledger per guest**
>
> Creating a Tally ledger for every walk-in clutters the books. Keep individual guest bills in your hotel system and post a control total to Tally. Create named ledgers only for companies and OTAs that owe you money over time.

## The daily close

The [night audit process](https://guesthawk.com/guides/night-audit-process) is where accounting starts. Every day, someone should:

1. Confirm every occupied room was charged for the night, at the right rate and GST.
2. Match cash in the drawer, UPI received and card slips to the payments recorded, and note any difference with a reason.
3. Check that restaurant bills charged to rooms reached the right guest bills.
4. Record advances received for future stays as advances, not revenue.
5. Send the day's revenue, GST and payment totals to accounts, by department.

## The monthly close checklist

Most of the month-end work is reconciliation: proving that each balance in the books is real.

1. **Bank reconciliation** for every account, including the UPI and card clearing ledgers.
2. **OTA reconciliation.** Match each payout to the bookings, commission and deductions. Chase anything missing.
3. **Debtors.** List what each company and OTA owes, by age. Follow up anything past its credit period.
4. **Guest advances.** Check that advances for stays already completed have been applied, and the rest relate to future bookings.
5. **GST.** Agree output GST in the books with the invoices issued, and review any input tax credit with your CA, remembering that a 5% hotel generally cannot claim credit on rooms supplies.
6. **Payroll and TDS.** Post salaries by department, and deposit TDS deducted by the due date your CA gives you.
7. **Stock.** Count food, beverage and guest supplies, and post the cost of what was used.
8. **Accruals and depreciation.** Book bills received late (power, gas, repairs) and the month's depreciation.
9. **Management report.** Produce the USALI-style statement and compare it with last month, the same month last year and your [hotel business plan](https://guesthawk.com/guides/hotel-business-plan).

## Who keeps the books, and in what

Small hotels usually split the work three ways. The front desk produces the daily figures. A bookkeeper, in-house or part-time, posts them and the purchase bills to TallyPrime or Zoho Books. A CA reviews the books, files GST and income-tax returns and signs off the year. That split works well as long as each person knows what they hand to the next, and when.

Write it down as a one-page routine:

- **Daily, by the front desk:** the end-of-day report, cash handed over with a count sheet, and copies of every expense paid in cash.
- **Weekly, by the bookkeeper:** revenue and payments posted from the daily reports, purchase bills entered, bank and clearing ledgers checked.
- **Monthly, by the bookkeeper with the CA:** the close checklist above, GST data and the management report.

Choose between TallyPrime and Zoho Books by what your CA and bookkeeper know well, and whether you want to work from a desktop or the browser. Both handle GST, cost centres and bank reconciliation. What matters more than the brand is a clean ledger map, a fixed routine and a hotel system that hands over the same totals every day.

If you have several properties, keep each in its own company or cost centre from day one, especially if they have separate GSTINs. Untangling a shared set of books later is slow and expensive.

## Common mistakes in hotel books

- **Advances posted as revenue.** It inflates the month's revenue and the GST view, then leaves a hole when the guest arrives.
- **OTA payouts posted net.** Recording only what reached the bank hides the commission and the tax deducted, which you may be able to claim back.
- **One "expenses" ledger.** If repairs, power and supplies sit in one ledger, nobody can see which one is rising.
- **Cash differences written off without a reason.** Small, regular shortfalls are a pattern. Record each one.
- **Tally and the front desk disagreeing.** If the revenue in the books is not the revenue in the hotel system, find out why the same week, not at audit time.

## Linking your hotel system and your books

The less retyping between the front desk and the accounts, the fewer errors. GuestHawk's [billing](https://guesthawk.com/platform#billing) prepares B2B invoices ready for your accountant, and revenue syncs with your accounting software so the books agree; its [finance](https://guesthawk.com/platform#finance) reports match every shift's cash and UPI before the next one starts.

## Frequently asked questions

### What is accounting in the hotel industry?

It is recording and reporting a hotel's money: revenue from rooms, food and other services, what guests and companies owe, what the hotel owes suppliers and the tax authorities, and the costs of each department. What sets it apart is that revenue is earned every night, and payments arrive before, during and long after the stay.

### Hotel expenses come under which head in Tally?

In TallyPrime's predefined groups, operating costs such as salaries, power, rent, repairs, commission and marketing usually go under **Indirect Expenses**, food and beverage purchases under **Purchase Accounts**, and furniture, equipment and air-conditioners under **Fixed Assets**. Some hotels put kitchen and housekeeping costs under **Direct Expenses** to show gross profit. Agree the split with your CA and keep it consistent.

### Can a hotel use Tally Prime for accounting?

Yes. Many Indian hotels keep their books in TallyPrime or Zoho Books, and run guest bills, rooms and the restaurant in a separate hotel system. The two must be linked by a clear daily routine, so that revenue, GST and payments in the books match the front desk.

### What is USALI?

The Uniform System of Accounts for the Lodging Industry, the standard layout for a hotel's operating statement, written by a committee sponsored by HFTP and the American Hotel and Lodging Association. Its 12th Revised Edition has an adoption date of 1 January 2026. It sets out departments and cost lines; it does not replace Indian accounting standards or tax law.

### Should room revenue be posted daily or monthly?

Daily. Room revenue is earned each night, and the end-of-day close produces the figures. Post them every day, or at least weekly from the daily reports, so the books can be checked against the bank and the front desk. See our [night audit process](https://guesthawk.com/guides/night-audit-process) guide.

## Sources

- [TallyHelp: Ledgers and groups in TallyPrime](https://help.tallysolutions.com/ledgers-and-groups-in-tallyprime/)
- [TallyHelp: Create, alter and delete groups in TallyPrime](https://help.tallysolutions.com/tally-prime/accounting/groups-in-tallyprime/)
- [HOSPA: USALI 12th Revised Edition, an expert overview of the updates](https://www.hospa.org/_files/ugd/784558_bd81367cb38d4bb4a52f59faf706d51e.pdf)