Every second counts in the hospitality industry. Guests expect seamless service, and hotel teams must operate with precision and efficiency to keep everything running smoothly and profitable.
But while front-of-house operations focus on delivering top-tier guest experiences, what’s happening behind the scenes in your accounts payable (AP) department could be silently draining resources, slowing down operations, and putting your hotel’s financial stability at risk.
If your hotel’s AP process still relies on manual invoice approvals, paper checks, and outdated workflows, you’re not just wasting time – you’re losing money. Late payments damage vendor relationships. Errors create overpayments. Poor visibility makes cash flow unpredictable. And with fraud on the rise, hotels are prime targets for cybercriminals looking to exploit weak AP controls.
Can your hotel afford to keep running AP this way?
The reality is, inefficient AP isn’t just an administrative headache – it’s a growth killer. If your finance team is buried in paper invoices and checks and manual reconciliations, they aren’t focusing on financial strategy, revenue optimization, or guest-centric initiatives that drive profitability.
It’s time to stop letting AP inefficiencies hold your hotel back.
The good news? With the right strategies, you can streamline AP, eliminate manual bottlenecks, enhance security, and accelerate payments – all while cutting costs. This article shows you how.
The Biggest AP Challenges Hotels Face
Before diving into solutions, it’s important to recognize the biggest AP challenges that hotels encounter, how they impact daily operations, and how they can hinder growth.
- Manual processes. Sorting, entering, and approving invoices manually leads to delays, errors, and higher operational costs. Lost invoices and approval bottlenecks can result in late fees and strained vendor relationships. When invoices pile up, hotel teams scramble to resolve issues, diverting attention from guest-focused initiatives. Manual processing also increases the risk of duplicate payments or missed invoices, cutting profit margins.
- Lack of visibility. Without a centralized system, hotels struggle to track invoices and payments in real time. This lack of transparency makes budgeting, forecasting, and financial planning more difficult. Cash flow surprises can disrupt operations, forcing hotels to delay investments in property upgrades, staffing, or guest services. Without access to financial data, decision-makers are left in the dark, making it harder to react swiftly to business needs.
- Payment inefficiencies. Many hotels still pay suppliers using paper checks, which are slow, expensive, and highly vulnerable to fraud. Checks require printing, mailing, and manual reconciliation, increasing both costs and security risks. Processing supplier payments manually costs hotels valuable time and money, often requiring AP staff to track down missing payments or resolve disputes with vendors. The inefficiencies add up quickly, impacting vendor trust and limiting a hotel’s ability to negotiate better payment terms.
- Fraud risks. Hotels process high volumes of payments, making them prime targets for fraud. Weak internal controls, outdated approval workflows, and reliance on unsecured payment methods put hotel finances at risk. A single fraudulent transaction can cost a hotel thousands – or even millions – of dollars, not to mention the reputational damage that comes with a breach. Fraudsters exploit gaps in AP security, such as email-based payment requests and unchecked bank account changes, leaving hotels vulnerable to financial loss.
- Compliance challenges. Hotels must ensure accurate reporting, tax compliance, and reconciliation with financial systems. Manual tracking and data entry make it difficult to meet audit requirements and close financial periods efficiently. Disorganized financial records can lead to tax penalties, failed audits, and inaccurate reporting, creating significant financial and legal risks. When reconciliation is slow and error-prone, hotel operators struggle to gain a clear picture of profitability, which affects long-term financial planning.
If your hotel is facing any of these challenges, it’s time to rethink your AP strategy. The longer these inefficiencies persist, the more they cost your hotel in lost revenue, missed opportunities, and risk.
5 Strategies for Streamlining AP Processes
If your hotel’s AP process is bogged down by inefficiencies, errors, and security risks, it’s not just an operational headache – it’s a threat to your bottom line that demands immediate action.
Here are five strategies for streamlining your AP processes:
- Automate invoice & payment workflows. Manual invoice processing is no longer sustainable in today’s hospitality industry. Hotels that rely on paper-based workflows or manual data entry waste valuable time and resources, leading to delayed approvals and payment errors. By automating invoice capture, approval routing, and payment processing, hotels can significantly reduce invoice approval time, often from days to minutes. Automated workflows also eliminate manual data entry errors, ensuring invoices are matched to purchase orders and routed for approval instantly. With payments scheduled automatically, hotel finance teams can focus on strategic financial management rather than chasing down invoices. The result? Faster, more accurate payments and stronger vendor relationships.
- Implement real-time tracking. Visibility into financial transactions is critical for hotels managing multiple vendors, suppliers, and properties. Without real-time tracking, finance teams struggle with forecasting, budgeting, and fraud detection. AP automation provides instant insights into invoice status, payment approvals, and reconciliation details, allowing hotels to optimize cash flow and financial planning. With automated tracking, discrepancies or potential fraud can be detected sooner, preventing errors. Having a centralized platform for monitoring invoices and payments also simplifies cash flow management across multiple locations, giving finance leaders the confidence to make more informed financial decisions.
- Pay suppliers electronically. Hotels that still rely on paper checks to pay suppliers are exposing themselves to unnecessary costs, inefficiencies, and security risks. Checks require printing, mailing, and manual reconciliation – all of which drive up operational expenses. By switching to Automated Clearing House (ACH) payments, virtual cards, and other electronic payment methods, hotels can reduce payment processing costs by up to 80 percent. Digital payments also enable faster transactions, allowing hotels to take advantage of early payment discounts while reducing inquiries and improving relationships with suppliers. Additionally, electronic payments are inherently more secure, providing a trackable, fraud-resistant way to process vendor payments without the risks associated with paper-based transactions.
- Strengthen fraud mitigation measures. Fraud is a growing concern for the hospitality industry, where large payment volumes make hotels attractive targets for cybercriminals. Strengthening security controls within the AP process is essential for mitigating unauthorized transactions and financial losses. Hotels should implement multi-factor authentication to restrict access to payment systems, while audit logging ensures every transaction is recorded for accountability. Fraud mitigation tools such as positive pay for checks help detect and stop unauthorized transactions before they occur, and the controls built into virtual cards provide an extra layer of protection. By proactively addressing payment fraud risks, hotels can safeguard their financial assets and ensure compliance with industry regulations.
- Integrate AP with your hotel’s financial management system. Disconnected AP processes often lead to reconciliation nightmares, making month-end and year-end financial close time-consuming and error-prone. By integrating AP automation with a hotel’s financial management system, finance teams can sync invoices and payments with the General Ledger in real time. This eliminates manual data entry and significantly reduces reconciliation errors, improving reporting accuracy. A unified financial view allows hotels to manage cash flow more effectively across multiple locations, ensuring smooth operations and strategic financial planning. With automation in place, finance teams can focus on optimizing hotel performance rather than dealing with inefficient, fragmented payment processes.
By implementing these strategies, hotels can speed approvals, reduce costs, enhance security, and improve visibility – freeing up resources to focus on guest satisfaction and business growth.
Choosing the Right AP Automation Solution for Your Hotel
Not all AP solutions are built for the hospitality industry.
When selecting an automated AP system, consider:
- Hospitality-specific features. Look for a solution designed for hotel workflows, with automated invoice matching, payment approvals, and real-time reconciliation.
- Seamless integration. Ensure prospective AP systems integrate with your property management system (PMS) and financial software for a single, consolidated financial view.
- Fraud mitigation tools. Segregation of duties, systematic workflows, MFA, audit logging, encryption, and secure virtual card payments are essential for protecting hotel finances.
- Scalability. Prioritize AP automation solutions that can grow with your business and adapt to your changing needs – whether it’s managing one hotel or a multi-property portfolio.
- Mobile accessibility. A web-enabled platform lets finance teams manage invoices and payments from anywhere and keeps decision-makers in-the-know while on-the-go.
By investing in the right AP automation solution, hotels can eliminate inefficiencies, improve financial control, and focus on what truly matters – delivering an exceptional guest experience.
Modernizing AP is Key to Hotel Success
Hotels that still rely on manual AP processes are at risk of falling behind. The hospitality industry demands speed, accuracy, security, and visibility – all of which are impossible to achieve with outdated systems. By automating AP workflows, transitioning to digital payments, improving visibility, strengthening security, and integrating AP with financial systems, hotels can reduce costs, increase efficiency, and drive growth. Ready to modernize your hotel’s AP process? Discover how Data Plus’ DP Pay can help your hotel automate the way it approves and pays supplier invoices.
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Send all press inquiries to Bruce Bensetler: ABB@dphs.com
