Complying with The Uniform System of Accounts for the Lodging Industry (USALI) isn’t just a box to check. It’s the foundation of financial integrity in hospitality. USALI sets the standard for how hospitality businesses track revenue, manage expenses, and benchmark performance. Ignoring these guidelines isn’t an option. Misclassified revenue, inconsistent reporting, and a lack of transparency can erode trust, distort decision-making, and put a property at a serious competitive disadvantage.
The release of the 12th edition of USALI raises the bar with new reporting requirements, enhanced labor cost tracking, and updated revenue classifications. Financial management systems that can’t keep up will leave hospitality finance teams scrambling to manually adjust reports, increasing the risk of errors and compliance failures. Properties that fail to adapt risk falling behind industry standards, making it harder to attract investors, secure financing, and maintain operational efficiency.
Now is the time to ensure your financial management system is ready. This article details what to look for when selecting a financial management system to help your business comply with USALI.
What’s New in USALI 12th Edition—And Why It Matters
The 12th edition of USALI introduces several key updates designed to reflect the evolving needs of the hospitality industry. These changes address new revenue streams, the growing impact of labor costs, and the expanding role of technology-related expenses in modern hospitality operations.
- Updated revenue and expense classifications. The 12th edition restructures certain revenue and expense classifications to reflect changes in the way hospitality businesses operate today. For example, as properties increasingly generate revenue from digital channels and ancillary services such as resort fees, parking, and wellness amenities, USALI has adjusted its classification to provide better visibility into these revenue streams. This ensures financial statements reflect an accurate and modern representation of income and costs.
- Enhanced labor reporting. Labor costs are one of the largest expenses in hospitality. The 12th edition places a stronger emphasis on tracking labor costs by refining classifications for salaried and hourly employees, contractors, and benefits. By providing more detailed breakdowns of labor expenses, hospitality finance leaders can gain better insights into workforce management, optimize scheduling, and control costs more effectively.
- New operating metrics. USALI 12th edition introduces Key Performance Indicators (KPIs) to help properties benchmark their financial performance against industry standards. These KPIs include RevPAR (Revenue Per Available Room), GOPPAR (Gross Operating Profit Per Available Room), and TRevPAR (Total Revenue Per Available Room). With these benchmarks, finance teams can make more data-driven decisions to improve profitability.
- Greater emphasis on technology costs. With the growing reliance on cloud-based property management systems (PMS), digital payment solutions, and guest experience platforms, USALI now requires better categorization of IT-related costs. This ensures that hospitality businesses can track their t
These updates make it critical for hospitality finance teams to ensure their financial management system is designed to handle the latest USALI structure, seamlessly automate new reporting requirements, and efficiently facilitate compliance with minimal manual effort.
The Role of Financial Management Systems in USALI Compliance
A financial management system (FMS) is more than just an accounting tool – it automates reporting, enhances data accuracy, and streamlines audits to mitigate compliance risks.
- Standardized financial reporting. One of the benefits of an FMS is its ability to structure financial data according to USALI’s format, ensuring consistency and reliability across all reports. This allows hospitality businesses to generate standardized financial statements that align with industry benchmarks and make more informed, data-driven decisions.
- Enhanced data accuracy. Manual data entry and traditional spreadsheets increase the risk of errors in revenue classification, payroll accounting, and expense tracking. An FMS automates data capture, classification, and reconciliation, reducing the risk of misreporting and financial discrepancies. With built-in validation rules and automated error detection, an FMS ensures that financial data is accurate, consistent, and compliant with USALI standards.
- Improved benchmarking. With built-in USALI-compliant reporting, an FMS enables finance teams to compare financial performance against industry standards and similar properties. These benchmarks help finance assess profitability, costs, and operational effectiveness. By identifying trends and performance gaps, finance can make data-driven decisions to optimize revenue streams, control costs, and enhance overall financial health.
- Streamlined audits. Most hospitality companies undergo internal and external financial audits. A USALI-compliant FMS ensures all financial data is properly categorized, documented, and easily retrievable, simplifying the audit process and reducing compliance risks. With audit trails and detailed transaction histories, finance teams can provide auditors with the necessary documentation, minimizing disruptions and ensuring a smoother audit.
- Better adaptability. USALI updates are designed to evolve with industry needs. An FMS with configurable and flexible reporting capabilities allows finance teams to adapt to future USALI changes without requiring extensive system modifications or manual interventions.
Without an FMS tailored for USALI compliance, the finance teams at hospitality companies may struggle with reporting inconsistencies, manual data adjustments, and compliance risks.
What to Look for in an FMS for USALI Compliance
Selecting the right FMS is crucial to ensuring USALI compliance. Hospitality finance leaders should prioritize the following features and evaluate prospective solutions to confirm they meet these needs.
- USALI-compliant chart of accounts. USALI has a specific structure for financial information, including how revenue and expenses should be classified. An FMS should include a pre-configured chart of accounts that follows USALI standards or allow for easy customization to align with these requirements. Ensure that the system has preloaded USALI templates to save time on setup. Confirm that the chart of accounts is configurable so it can be adjusted as USALI updates occur. And ask prospective FMS platform providers if their system supports secure, automatic, real-time updates to seamlessly align with future USALI revisions without requiring manual intervention or costly system upgrades.
- Automated financial reporting. Manual report generation is time-consuming and prone to errors. A USALI-compliant FMS should be capable of generating financial reports that adhere to USALI’s formatting, revenue classifications, and reporting requirements. Verify that the system can generate preformatted financial statements that match USALI guidelines. Look for features like scheduled reporting, so financial statements can be automatically created and distributed at set intervals. And confirm that the system can produce profit and loss statements, revenue breakdowns, and departmental reports in USALI-compliant formats.
- Real-time financial insights. Having real-time access to financial data enables finance leaders to make proactive decisions based on current performance, rather than relying on outdated reports. Ensure that an FMS offers live dashboards and real-time financial tracking instead of requiring manual data entry and uploads. Look for built-in data visualization tools that make it easy to interpret financial trends. And ask if the system integrates with other hospitality platforms (e.g., expense management) to provide a complete financial picture.
- Multi-property and departmental reporting. For hospitality groups and multi-property businesses, the ability to consolidate financial data across multiple locations while maintaining detailed property-specific reports is key for compliance and decision-making. Ensure an FMS allows for property-level financial reporting while supporting consolidated reports across multiple locations. Look for department-specific tracking, so revenue and expenses can be broken down by different business areas (e.g., food and beverage, spa services, housekeeping). Additionally, ask if the system allows for customizable reporting by entity, brand, or region, which is critical for chains and management companies.
- Customizable KPIs and benchmarking. USALI benchmarks financial performance using industry-standard metrics such as RevPAR, GOPPAR, and TRevPAR. An effective FMS application should include built-in KPI tracking and benchmarking tools. Verify that the system has predefined USALI KPIs that can be tracked automatically. Ensure the system allows finance teams to compare performance across properties, regions, or industry benchmarks without manual calculations. And look for a solution that enables custom KPI creation, so finance leaders can track additional metrics beyond those prescribed by USALI.
- Integrated labor cost tracking. The 12th edition of USALI places greater emphasis on tracking labor costs by department and employee type. An FMS should have a dedicated labor cost module that provides detailed visibility into wages, overtime, and benefits. Ensure that prospective systems automatically categorize labor costs in alignment with USALI classifications. Look for daily labor tracking, so finance teams can monitor staffing costs and avoid budget overruns. Additionally, confirm that the system integrates with payroll solutions to minimize discrepancies between payroll records and financial reports.
- Scalability and flexibility. As financial regulations and industry standards evolve, an FMS should be adaptable to future USALI updates and capable of supporting growing business needs. Prioritize a system that is modular and scalable, allowing for expansion as a business grows. Look for a vendor with a track record of keeping up with USALI updates and offering system enhancements. And confirm that the system has integration capabilities with third-party applications, ensuring it remains compatible with future technologies.
Selecting the right financial management system is essential for ensuring compliance with USALI 12th edition. With the latest updates, finance leaders must ensure their system is equipped to handle new revenue classifications, labor reporting enhancements, and technology cost tracking.
Conclusion
The latest USALI updates demand immediate action from hospitality finance leaders to ensure their systems can properly classify revenue, track labor costs with greater precision, and account for rising technology expenses. Without a system that aligns with these new requirements, properties risk inaccurate reporting, compliance failures, and less credibility in financial benchmarking. An FMS that automates compliance, improves reporting accuracy, and enables benchmarking will empower finance teams to make informed decisions and maintain alignment with industry best practices.
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Send all press inquiries to Rob Williams: rgw@dphs.com
