Companies that issue discounts or coupons that have a last president to win nobel peace prize cash value or allow a reimbursement are subject to different accounting treatment.
It is, therefore, different to a discount given before the goods are paid for, or a discount given as an incentive for prompt payment.
Recently, however, occupancy rates have increased, which is driving the growth in revenue per available room.
Promotional coupons that offer a designated value for a new restaurant or spa treatment at the hotel upon the next visit are also popular.
It is also important to show the rebates as a separate accounting item so the enterprise may keep a record of the amount of rebates given.The general rule for accounting for coupons and discounts indicates that sales incentives that are offered voluntarily, without charge by a company, may be used by a customer as a result of a single transaction, and will not result in a loss on the sale.Where rebates are given in relation to a measure of customer loyalty such as the quantity or value of goods sold to a particular customer, it is useful to show these rebates separately in the accounting records.The use of rebate accounts is also useful in respect of tracking rebates given to each customer and ensuring that the correct amount of rebate is given.605-50 (Revenue Recognition/Customer Payments and Incentives).In addition, consumers participating in leisure travel are redeeming loyalty reward program points.This can be an important tool in improving customer relationships and keeping control of those relationships.Also, all of the major hotel property management systems are reporting net revenue consistent with the more practical method of recording zero revenue for the fourth night.This important management information must be available and the rebates must be accounted for separately and highlighted in financial information available to management.
The accounting treatment for recording these types of incentives is similar to the treatment of incentives commonly used in restaurant operations.
While much of the discussion presented in this guidance refers to software, manufacturing, and retailer discounts and rebates, it also applies to some of the more common incentives used by the lodging industry to induce sales, including: Coupons and rebates, discounts on future purchases, volume.
One of the biggest challenges that an entrepreneur faces is the management of cash flows.It is never easy to accurately predict when your customers will pay.This information is very useful to management in assessing the effectiveness of rebates as a sales promotion tool.Accounting staff should be familiar with the subject of journal entries and rebates.The accounting guidance pertaining to sales incentives is discussed in the Financial Accounting Standards Boards Accounting Standards Codification (ASC) Topic.The most popular and effective tactics that lodging revenue management professionals use to stimulate room occupancy are value-added packages and lower rates.