The following script is from Evention’s Automated Back Office Briefings Podcast, Episode 3: Accounting Automation & Centralization – Transforming Modern Hospitality.
Listen to the full episode here.
Episode 3 – Accounting Automation & Centralization – Transforming Modern Hospitality
HOST: Hello and welcome to another episode of Automated Back Office Briefings. I’m your host, Claire Kenney, and today I’m sitting down with Evention Owner and Co-Founder, Mike Baldinger. Hi Mike, welcome!
MIKE: Hi, Claire. Good to be here.
HOST: Can you tell us a little bit about yourself and the history of Evention?
MIKE: Absolutely! Evention was founded 16 years ago by myself and my two business partners, Erik and Brian. Our first hospitality solution was born in 2006 to automate gratuity payroll for one of the largest hotels in Chicago. From that starting point, it has really been our mission to automate accounting processes in hotels and we are so excited today to have a suite of four solutions that are used in thousands of hotels worldwide to automate cash management, tip and gratuity payroll, credit card reconciliation, and group billing.
HOST: Certainly 2020 has been a tough year for the hospitality industry. How has hospitality accounting evolved in the face of the current pandemic?
MIKE: You are correct that this was and still is a very tough year for the hotels. Most of our hospitality clients are in what are classified as the upper upscale and luxury markets and many of these hotels had to shut down in March/April in the U.S. and across Europe. Group and business travel evaporated and it was an enormous shock to the entire industry. It really was the upper end of the market that got hit the hardest with luxury hotel occupancy falling below 10%. Although most hotels have re-opened, occupancy and RevPAR are still down in most markets. It will continue to evolve as hotels often open with just a few outlets to start and are ramping up as travel resumes.
HOST: Yet, as the trending hashtag #hospitalitystrong suggests, hospitality is resilient. How has hospitality evolved, specifically the industry’s accounting operations, in the face of the current pandemic?
MIKE: Yes, the industry is resilient and we really are seeing several major initiatives from the hotels:
Clustering or Shared Services – The harsh reality now is that with revenues and occupancy down, hotels are consolidating labor. There are fewer resources at the hotels and that will likely be the norm for quite some time. There has been a push toward centralization and shared services over the last several years, but the pandemic has absolutely accelerated this. When I use the term shared services this doesn’t always mean outsourcing. What we are instead seeing is management companies consolidating accounting teams by country or region to truly scale their resources. Instead of having a full accounting staff at each and every hotel, the focus is to staff the hotels with minimal key resources and technology and then centralize all other aspects of accounting.
We are seeing this play out on two different levels. In some organizations, the centralization of a shared accounting team is done across all hotels (by country as example). However, in other examples, we are seeing hotel clustering at a smaller region (perhaps by city or state). In this setup, if I have five hotels in Chicago for example, I could have the majority of accounting processes run out of just one of those hotels.
These types of efficiencies can increase standardization while also reducing labor/costs to help hotel navigate through the recovery.
HOST: And we’re also really seeing a focus on integration and automation?
Integration – Hotels are also challenged with having many systems to run and manage their business. For example, different from a retailer, a hotel could easily have four POS systems – one for F&B, one for front desk, another for spa, and a fourth for golf! This can be an enormous challenge as accounting needs to oversee and reconcile all these systems. This is where integration is key. Any technology that can streamline accounting processes must be able to work across all systems and also integrate with the accounting systems (general ledger as well). Enabling this smooth flow of data is critical, especially in the move to centralization.
Automation – The other initiative now is to leverage automation. With fewer resources due to furloughs and decreased occupancy, the same tasks that were being performed in February before COVID still need to be completed today, but it just isn’t economical to staff at those previous February levels. This is where technology really comes in to create those efficiencies.
I see automation being most effective on two levels – software and robotics.
To centralize staff and processes, that is almost impossible without software and integration. The shared service or centralized team needs data from all hotels they oversee with integration and workflows. By delivering this through cloud-based solutions, one person can reconcile and oversee multiple hotels from anywhere. There are many accounting processes that can be centralized now through technology including credit management, auditing, reconciliation, and much more!
On the robotics side, it is truly amazing what can be automated now that wasn’t even possible a few years ago. At Evention, we leverage robotic cash recyclers to completely reinvent the management of cash – a process that hasn’t really changed in decades. In 2020 and beyond, it no longer makes sense for people to count and reconcile cash. To solve this, cash recyclers can issue cash to cashiers, allow for change buying 24/7, and then secure and verify deposits. All of this can then be integrated with the POS and Property Management systems to automatically reconcile cash. The appropriate use of technology can save significant labor and allow for the hotel staff to spend more time with the customers.
HOST: You mentioned cash automation as an example, but Evention is streamlining the management of other payment methods as well, correct?
MIKE: That’s correct. I believe that in any hospitality company, customer service is key, and consumers should be able to pay in a manner that suits their preference. Hospitality is all about consumer preference and catering to provide the best experience possible for those preferences. As a technology provider for hotels, our goal is to enable hotels to be able to accept any payment method (touchless, credit card, and cash) and then to streamline the process to manage and reconcile all of that centrally for accounting.
Reconciliation for any payment method can be extremely time consuming for the accounting staff and automation can greatly minimize that challenge.
HOST: At Evention, pushing the status quo and really listening to our customers’ needs drives Evention’s automation innovation. And this philosophy really goes all the way back to our initial founding.
MIKE: That’s right. Over 15 years ago, my co-founders and I were presented with the opportunity to analyze and develop a solution for the manual gratuity process at a local Chicago hotel. This opportunity paved the way for what is known today as Evention’s automated Tips & Gratuities solution.
From that starting point, we listened to our customers and added three more solutions to our product suite to automate cash management, credit card reconciliation, and group billing.
Fulfilling this need to automate the traditional tip and gratuity payroll process paved the way to innovating other manual back office processes – for example, transitioning manual cash management to an automated cash reconciliation and recycling scenario to more accurately count bills and remove the burden of multiple spreadsheet comparison. Evention’s group billing solution helps hotels transition to the shared services environment, a contemporary trend in hospitality, by centralizing group contract components and condensing all areas of group contract – from contract obligations and credit management to forecast-based planning and accounting of actualized services.
There is no bigger thrill for me that to listen to a customer challenge and then show them how we can help them automate and streamline that process. Every time we can automate a task, remove a risk, increase employee happiness, or centralize processes, it drives our entire team.
And I’m excited to say that we are hiring now to continue to grow our engineering team as we are developing new products and modules based on our customer feedback.
HOST: That’s right. Those interested in applying can visit our career page www.eventionllc.com/careers.
HOST: Well, thanks again, Mike for discussing automation’s impact on the back office, particularly in the hospitality environment. Thanks for coming on.
MIKE: Of course.
HOST: And thank you to our listeners. Be sure to follow Automated Back Office Briefings to stay up-to-date on the latest in back office automation. Leave us a review or 5-star rating on your listening platform.