travel agency chart of accounts

Travel Agency Accounting: COA Template & Account Hierarchy

Travel agencies play a vital role in the tourism industry, offering services such as flight bookings, hotel reservations, and tour packages. Effective financial management is essential for the success of any travel agency, and a critical component of this process is the Chart of Accounts (COA). In this article, we will discuss the importance of a COA for travel agencies, provide an example template, and outline the account hierarchy.

What is a Chart of Accounts (COA)?

A Chart of Accounts (COA) is an organized list of all financial accounts used by a business to record and report its financial transactions. The COA serves as the foundation for the company's accounting system, enabling accurate tracking and reporting of financial activities. For travel agencies, a well-structured COA can provide insights into profitability, cost management, and areas for improvement.

Example COA Template for Travel Agencies

The following is an example COA template designed specifically for travel agencies. Keep in mind that every business is unique, and your COA should be tailored to your specific needs and requirements.

1. Assets  

1.1. Current Assets

1.1.1. Cash

1.1.2. Accounts Receivable

1.1.3. Prepaid Expenses  

1.2. Non-Current Assets

1.2.1. Property, Plant, and Equipment

1.2.2. Intangible Assets

2. Liabilities  

2.1. Current Liabilities

2.1.1. Accounts Payable

2.1.2. Accrued Expenses

2.1.3. Deferred Revenue  

2.2. Non-Current Liabilities

2.2.1. Long-term Debt

2.2.2. Deferred Tax Liabilities

3.1. Owner's Capital

3.2. Retained Earnings

4.1. Commission Income

4.2. Service Fees

4.3. Tour Package Sales

4.4. Other Income

5. Expenses

5.1. Cost of Services

5.1.1. Supplier Payments

5.1.2. Tour Package Costs

5.2. Operating Expenses

5.2.1. Salaries and Wages

5.2.2. Rent and Utilities

5.2.3. Marketing and Advertising

5.2.4. Travel and Entertainment

5.2.5. Insurance

5.2.6. Depreciation and Amortization

5.3. Interest Expense

5.4. Income Tax Expense

Account Hierarchy in Travel Agency Accounting

Account hierarchy is essential for maintaining consistency and accuracy in financial reporting. A typical account hierarchy for travel agencies consists of the following levels:  

Category: The highest level in the hierarchy, representing the main divisions of the financial statement (assets, liabilities, equity, revenue, and expenses).  

Subcategory: A more detailed level within the main categories, further segregating accounts based on their nature or function (e.g., current assets, non-current assets, operating expenses).  

Account: The most detailed level, representing individual financial accounts used to record specific transactions (e.g., cash, accounts payable, commission income).

A well-organized Chart of Accounts is crucial for effective financial management in travel agencies. By creating a customized COA tailored to the specific needs of your travel agency and establishing a clear account hierarchy, you will ensure accurate financial record-keeping , facilitate reporting, and provide valuable insights for decision-making.Travel agencies have unique accounting needs, such as tracking commissions, managing supplier payments, and handling deferred revenue. It is essential to consider these specific requirements when developing your COA. You may also want to include accounts for refunds, cancellations, and loyalty program expenses, as these are common financial events in the travel industry.As your travel agency grows and evolves, it is essential to review and update your COA periodically to accommodate changes in your financial structure, new service offerings, or shifts in business strategy. This will help maintain a robust and effective accounting system that supports the ongoing success of your travel agency.By implementing a well-designed COA and maintaining an organized account hierarchy, you can improve your travel agency's financial transparency, ensure compliance with accounting standards, and make informed decisions based on accurate financial data. As a result, you'll be better equipped to manage your business's finances, allocate resources efficiently, and identify opportunities for growth and improvement in the competitive travel industry.

Travel Agency Accounting

Today, accounting is recognized as an information system and is designed to communicate the right information to the internal as well as external users. Accounting involves recording, classification and summarizing the accounting information directed toward the determination of financial strength and weakness of a travel agency.

To manage a travel agency / tour operator profitably demands accurate recording and preparation of financial statements. These are essential in determining the true and fair status of the business and for making strategic plan and decisions.

Travel Accounting System

The basic objective of accounting is to ascertain the profitability and finance position of a travel agency operation. To achieve this, every travel agency prepares the following journals and statements:

• Sales Journal
• Cash Receipt
• Account Receivable

Cash Disbursement

• IATA ledger
• General Ledger
• Profit and Loss Account
• Balance Sheet

Sale Journal

In this journal, all credit sales are recorded. Sometimes, a travel agency provides extends credit facilities to its clients i.e., leisure and commercial clients. It, in fact, makes a cash loan to its clients. However, it has been noticed that only large-scale travel agencies can afford to extend credit to corporate customers, but even then, a thorough credit check is required before a credit amount is opened.

To maintain the up-to-date record of all credit sale, travel company prepare a sales journal.

Cash Receipt Journal

It is used to record all revenues received by the travel agency during the period. In other words, transactions concerning cash, credit cards, cheques are recorded in this journal. For example sale of the tour package, the commission received from the hotel, airlines and other vendors are recorded in it.

When a travel agency purchases tourism products, services from the supplier on credit, the amount owed to producers/suppliers/sellers are referred to as an account receivable.

Cash outflows are recorded in cash disbursement journal. Cash outflow means the operating expenses of the travel agency like rent, salaries, telephone expenses, administrative expense, financial and legal expenses, selling and distribution expenses etc.

These are mostly paid by cheques or through bank drafts. Cash disbursement journal is also called Cost Journal . Thus, cost journal is used to record the payments made by a travel company to its employees and others.

IATA Ledger

The IATA ledger is known as ‘ Chief Book of Accounts’ and is the destination point of entries made in the journals or sub-journals. It is used to balance the accounts of the travel agency. In accounting, ‘Balance Account’ means continuous and consistent check and verification of the accuracy of a travel agency’s accounting system.

The main objectives of IATA ledger are:

• Identification of travel agencies revenue sources.
• Determination of total sales (cash and credit).
• Determination of total commission earned by the travel agency.
• Find out the total amount owned to IATA.
• Evaluate the performance of each travel agency ( which is recognized by IATA).

The procedure of posting IATA Ledger is very simple and easy to understand. Today, almost every travel agency is using Electronic Data Processing System (EDP) to maintain an up-to-date record of each cash as well as credit card transactions.

The procedure of posting Cash and Credit Card Transaction in the IATA Ledger is:

• Enter the date, items, and invoice number.
• Enter the gross amount of cash and credit-card transaction.
• Calculate the commission and enter in the agency commission column.
• Subtract the commission form the gross sale and enter the result in the Net Amount column.
• If any amount is due then record it in the due column.

Pay Roll Journal

In this journal, a travel agency maintains the record of salaries and other benefits (financial) given to its employs like the number of employees on the payroll, total salaries, insurance premiums, compensations, housing facilities, medical facilities and other benefits to the employees.

Practically, the total from each journal is compiled monthly and posted to the general ledger. In this ledger, all types of the account are maintained/transferred from the various individual journals to provide ready information for the preparation of the financial statements.

ASTA Accounting System

In 1979, Touche Ross and Co. , developed the ASTA Travel Agency Accounting System to facilitate travel agent and tour operators specifically for ARC and IATA reporting. All items in the balance sheet and income statement are numbered from 100 to 699.  Each three-digit number convert the information for the users.

Basically, an accounting system is designed to record the agency’s assets, liabilities, capital, revenues/income/gains, and expenses or losses etc. A brief discussion of these follows:

Assets are economic resources which are owned and used by the travel agency and are expected to benefits in future operations. Hence, assets can be expected eventually to increase the cash inflow of the travel agency. Assets are two types:

• Current assets
• Fixed assets

Liabilities

These are the claims against travel agency assets. Practically, liabilities are future sacrifices of economic benefits arising agency’s debts to transfers assets or provide services to other as a result of past business transactions. These are of two kinds

• Current or short period liabilities
• Long-term liabilities

Capitals represent the amount of paid or contributed by owners, shareholders to the agency. More precisely

Capital = Assets – Liabilities

It is equal to the difference between the values of what is owned by the agency and the value of what is owed by the travel agency. Capital represents the net worth of the agency to owners.

Income/Gains

It is the monetary value of goods and services sold by the travel agency such as the sale of the tour, airlines commission and interest received etc. Revenues are cash inflows of the agency for the services rendered to the clients during a specific period.

Expenses represent the cost of doing travel agency business. Basically, these are cash outflows and are paid by the agency to obtain or purchases goods and services from the providers. Other expenses are included in it like as salary, administrative expenses, financial and legal expenses etc.

Financial Statements

Financial statements are the formal output of any accounting system and are prepared to provide accurate, timely understandable, objective and comparable accounting information to the users. Today, these statements are considered as a base for making rational decisions concerning the future of the travel agency.

Types of Financial Statements

Financial statements are mainly categorized into two types. These are as follows:

Income Statement

Position statement.

It is also known as profit and loss account and is prepared to provide information on an agency’s profitability over a given time period. It is the statement of the revenues earned and other gains made during a year; matched with the amounts spend to earn these revenues.

It shows whether the travel agency earned a profit i.e. the excess of income over expenditure or has suffered a loss i.e. the excess of expenditure over income.

An income statement contains a summary of figures relating to the cost of tours sold; various operating and non-operating expenses and provisions for expenses. These are then compared with sales and various operating and non-operating revenues.

The income statement provides important data for the financial planning, profit planning and debt-paying ability of the travel agency. Essentially, this statement provides vital financial information to the internal as well as external users.

It represents the financial health of a travel agency at a given time and therefore, it is often called a ‘ statement of financial position ‘. A position statement may be defined as statements prepared with a view to measuring the true financial position of a travel agency on a certain fixed date . It is prepared by the transferring all balance that belongs either to personnel or to real accounts.

These balance either represents assets or liabilities existing at the last date of the accounting period. In the technical world, it provides details about the resources of a travel agency and how these resources financed, either by lending funds or by investing capital in the business.

Users of Financial Statements

Financial statements are the mirrors which reflect the financial position and operating strength or weakness of a travel agency. These statements are useful to owners, creditors, suppliers, management, government, and other outside parties. Users of the financial statements are as follows:

The owner is mainly concerned with the managing the investment and long-run success of the travel agency. They are also interacted to know whether their money is used for those purposes for which they have invested it. The income and position statements tend to be the primary source of information to the owner.

2# Creditors

They represent persons, banking and financial institutions which have loaned funds to the travel agency. They are interested in knowing entity’s debt-paying ability for a short or a long term.

3# Suppliers

Suppliers in the travel business are not similar to the creditors. They are the producers/principals such as airlines, hotels , tour operators , transport operators, cruise liners for whom the travel agency collects revenues or collects product lines to formulate tourism product or tour package.

These suppliers are interested in knowing the agency’s debt-paying ability. Even some suppliers demand bank verification and audited financial statements etc.

4# Management

Management uses accounting information as an input to make rational decisions and to achieve profitability objective. Apart from financial statements, management needs some other reports too like the – booking commission report, employees and suppliers reports.

Ironically, management is interested only in knowing the existing profits, EPS, chances of survivals, a possibility of growth and diversification, relative performance, so that it can chalk out suitable strategies for its travel agency/operator.

5# Employees

Basically, employees are concerned with job satisfaction, job security, promotion, welfare schemes and other financial incentives given by the travel agency. So they want information on the profitability and the future prospects of a travel agency.

6# Financial Advisors

These advisors make their living by advising clients how and where they should invest their shaving. However, before they offer any advice they need financial information about the company which they may recommend to invest money.

7# Government

The financial statements are used to assess the liability of a travel agency and are also used to determine the overall performance of the travel industry. These statements provide valuable information to an authority for the determination of tax liability.

Government act as a base for farming and amending the regulatory structure of travel agency business.

Financial Analysis and Control Techniques Used in Travel Agency Business

It is observed that financial statements convey much useful financial information to internal management and outside users, and for this reason, it has become imperative to discuss the various tool for analyzing financial statements and control techniques used in travel agency business.

The emphasis is focused on the application of tools and techniques which are key indicators of a travel agency’s financial health and are considered vital for wise decisions to improve an agency’s profitability, financial soundness, and strong financial strategies.

Accounting Ratios

Accounting ratios are known as ‘ financial ratios ‘ and are considered key indicators for measuring the agency’s profitability and financial performance. They may be calculated at one point of time or may cover several time period to identify trends in several years. It is also used to compare one’s own position with an average industry.

According to Wixon and Kelly in 1970, “ an accounting ratio is an expression of the quantitative relationship between two numbers. It is a simple arithmetical expression of the relationship of one amount to another like 100 to 200 or 600 to 700 etc .”

The main ratios which are widely used to analyze an agency’s performance are:

Liquidity Ratio

Current ratio.

• Quick Ratio

Profitability Ratio

• Profit Margin
• Return in Assets
• Return on Investment

Activity Ration

• Fixed Assets
• Accounts Receivable
• Account Payable

Leverage Ratio

• Capital-gearing Ratio
• Financial Leverage
• Operating Leverage
• Debt Equity Ratio

It means an agency must be able to pay its short period debts and obligations from its short period financial resources to remain in the business. The most common used liquidity ratio is the current ratio.

This ratio compares the agency’s current assets to current liabilities. A high current ratio indicates that the travel agency is liquid and has the ability to pay its current obligations in time as and when they are due.

Activity ratios measures how effectively a travel agency manages its resources. Practically, funds are invested in various assets of a business to enhance sales and earn profits. The greater the return which can be derived from the assets, the more attractive the investment and the more profitable the agency.

These ratios are also called ‘ turnover rations ‘ because they reveal how rapidly resources are converted into revenues. High ratios are generally associated with good asset management. The activity ratios are:

Account Receivable indicates the number of times the average receivables are turned over during a year. The higher the value of turnover, the more efficient is the management of account receivable and vice versa.

Account Payables  indicates how much time a travel agency is likely to take in repaying its account payables/creditors in a very short period. The less the number of times, the more is the credit period that a travel agency enjoys.

The main objective of travel agency business is profit maximization. Essentially the existence, continuance, and expansion of travel business depend, to a large extent, on the travel agency’s capacity to earn good amount of profit every year.

Profitability ratios are a fair indication of sound management of a travel agency. The main profitability ratios are profit martin/net profit to sales ratio, return on assets and return on investment.

Capital Structure Ratio

It measures the relationship between long-term debts and owner’s equity. Generally, debt financing increases the risk of investment in the business. So a higher leverage ratio is associated with higher risk and vice versa. However, there are times when a travel agency can make use of borrowed capital than equity.

The debt-equity ratio and debt servicing ration are used to measures the capital structure of an agency. The debt-equity ratio compares the total debt with total owner’s equity of an agency.

Cash Flow Analysis

Cash flow analysis is a measurement of the amount of money that a travel agency has in navel at any point in time. It enumerates the net effect of the various transactions on cash and takes into account the receipts and disbursements of cash. It also summarizes and causes of changes in the cash position of a travel agency between the different dates of balance sheets.

The long-term survival of any travel agency depends on its ability to generate cash from its main trading activities.  The cash flow analysis is prepared by using the information contained in a travel agency last two year’s annual reports.

Practically, cash flow analysis is based on the profitability and liquidity of the travel agency and it helps the users to assess and identify:

• Travel agencies’ ability to generate future net cash inflow from the operations.
• An agency’s need for external financing.
• The reason for the difference between net income and net cash flow from the operational activities of the agency.
• The effects of cash and non-cash investing and financing transactions.

Moreover, by analyzing cash flow, the owners, shareholders and the management know exactly where the travel agency stands at any given time, on the other hand, credits, or suppliers, and the financial institutions use cash flow analysis to determine whether the travel agency can repay loans or has the debt paying capacity.

Break Even Point

A travel agency is said to be ‘break’ even when its total revenues are equal to total costs . It is a point where there is no profit or loss and at this point, the contribution is equal to fixed costs.

Budgetary Control

The keystone of planning and control activities in the travel agency is the budgetary control system, which is a major part of the day-to-day operations of the accounting system. It is applied to a system/technique of a management and accounting control by which all travel agency operations and activities are forecasted and actual results, are compared with budget estimates.

The process of budgetary control involves the establishment of budgets, relating the responsibilities of executives to the requirements of a policy, and the continuous comparison of actual result with budgeted results, either to secure by individual action the objectives of that policy or to provide a basis for its revision.

Practically, budgetary control technique is a useful accounting tool for translating strategic objectives/goals into realities. It also provides the management useful parameters for measuring the travel agency’s performance so that agency management can be tape corrective and timely actions if actual results are below the planned ones.

Some advantages of the budgetary control system are following as:

• It helps the management of an agency to conduct its business in a more efficient and effective manner.
• It lays emphasis on staff organization.
• It is helpful in measuring the efficiency of the whole organization and each department individually.
• It promotes the feeling of cost consciousness.
• It forces the manager to concentrate on the future.

Detailed Guide To Travel Agency Accounting

• Post author By varun
• Post date December 1, 2022

As far and wide the services of a travel agency expand, so is the elaborateness of its accounting procedures. Being a business model operating with multiple parties under unique financing arrangements, these agencies need to keep the flow of funds fairly sorted. This needs to be done for a clear bookkeeping and accounting of money received or paid. And so, understanding the procedure and details of accounting becomes quite a necessity for someone planning to run or establish a travel agency. 

Even though the availability of travel management platforms like Pathfndr has simplified accounting for these agencies, it is imperative to know the thick and thin of travel agency accounting if planning to run a travel agency.

Accountancy for travel agencies is a dedicated information system designed to provide the necessary details. These details can be related to the company’s monetary stature, its transactions, financial executions, and everything else related to its management. 

The success of travel agency management is critically based on efficient recording, accuracy of such record maintenance and the financial statement preparation. For suitable formulation of strategic business decisions and plans, travel agency accounting can be the concrete support needed. 

Travel agency accounting is also needed to assess the fair status of the company. It can be simply said to be a process that enables profitability assessment of the agency as well as its financial status in both short and long run. Platforms like Pathfndr only assist with the elaborate accounting system that a travel agency may need to follow. 

Below given is a detailed guide on the types of books maintained for travel agency accounting along with the financial statement preparation requirements and other pertinent details related to the procedure. Meanwhile, it can be useful to check out the role that travel agency management platforms like Pathfndr can play in maintaining the books of travel agency accounting for these companies.

Books That Need to be Created for Travel Accounting

Travel agencies need to prepare a host of books, statements, and journals for the purpose of essential travel accounting. These companies would need to create one or more of the following records and statements to keep the travel agency accounting right in place.

Journal for cash receipt

A cash receipt journal allows you to record the receipt of all revenue generated for the travel agency. The journal is recorded for an annual period and receives entries for all transactions made in cash, cheques, and credit cards. 

Whether the business receives payments for tour package sale and any commissions received from a partner operator, which can include airlines, bus operators, hotels, and the likes. 

While you would need to make these entries manually, using an online travel management platform like Pathfndr simplifies these records as they are directly accounted for through necessary tools used on these platforms.

Sales journal

A sales journal is used to account for all transactions that a travel agency makes in credit. In case your travel agency extends credit facilities to partner operators and customers, the entries would form a part of the sales journal. 

Usually, travel agencies operating on a large scale use these journals. With access to the likes of Pathfndr, all credit sale records are updated automatically to this journal.

Accounts receivable

A journal of accounts receivables is used to record transactions that the travel agency makes in credit in lieu of products and services received from supplying partners. It sums up the amount that the business would owe to its suppliers, sellers, and producers for the period involved.

Journal for cash disbursal

The total outflow of cash from the travel agency’s entirety of finances is recorded in the cash disbursement journal. A majority of this journal’s entry is made with respect to its operating cost for the period, including the likes of rents, administrative expenses, selling and/or distribution expenses, legal expenses and salaries/wages paid. 

Also known as the cost journal, entries to this travel agency accounting record are mostly made for cheques and drafts issued. But all of these essential entries are simplified through automation processes that platforms like Pathfndr provide.

Payroll journal

A payroll journal is an altogether separate journal that is maintained as a record of salaries/wages and other financial benefits paid to its employees. It gives a detailed insight on the total employees working with the agency, the total outflow made in the form of salaries and wages, compensations, insurance protection provided, medical facilities, compensations, and other benefits that may be available to its employees.

Chief book of accounts

The chief book of accounts is primarily a ledger book and a summed point of accounting record for all the balance entries that the company may have. It is a critical bookkeeping record that can direct identification and verification towards all revenue sources, a total of cash and credit sales, commissions earned, and such other crucial travel agency accounting aspects. 

The use of Electronic Data Processing or EDP systems in almost all travel agencies operating today simplifies all these entries, their identification and verification for performance evaluation. Platforms like Pathfndr are fast changing how these EDPs are integrated into the travel agency accounting system.

Travel Accounting System

A travel accounting system follows a design that aims to record all items related to the business’s balance sheet as well as its income statement. These items spread across the likes of the agency’s assets, liabilities, incomes, revenues, gains, losses, expenses, as well as the capital invested. 

An automated travel accounting system is integrated into the operation of travel management platforms like Pathfndr to simplify the recording and identification of these accounting items of the business. It can thus be greatly useful to create your travel agency’s official website on these platforms with dedicated domains and other customized functionalities.

Below given is a list of items that are included in the accounting statements prepared as per the travel accounting system with their short descriptions.

Capital invested

The capital of a business in general, including a travel agency, comprises the contributions from the owners of the entity, company, partnership, or firm. The capital of the company comprises both paid and unpaid contribution of the owners to the company. It can be summed up as the net worth of the travel agency that it owes to the owners. Depending on the type of the company a travel agency is established as, the capital and ownership can either be considered as separate or as one and the same.

Irrespective of the ownership-entity divide, the items comprising the capital of the travel agency must be accounted for individually. In the case of a company form of travel agency, the capital can include its shares and debentures. For travel agencies formed as partnership firms, the contributions of individual partners comprises the capital of the agency. In case of individual owners, their entire investment comprises the capital of the travel business. 

A travel agency runs on definite resources that it utilizes to generate revenue. Such resources are invested into the business to generate benefits from operations in the future. These resources that contribute to benefit generation over the time are known as assets of the company. 

The identification of assets is intended to increase the business’s cash flow in the long run through cyclic usage. A travel agency’s, or any company’s for that matter, assets can be identified under two classes, namely fixed and current assets. It is crucial to identify these assets separately for the purpose of travel agency accounting .

Liabilities

A liability of a travel agency can be identified as a claim against the assets that it utilizes for revenue generation and profitability. These can also be understood as the future sacrifice of economic benefits that the business undertakes for asset generation or for providing services, ultimately leading to debt creation charged on these assets. Like assets, liabilities of a travel agency are also identified under two types, and are known as long-term and short-term (current) liabilities. 

Be it assets, liabilities, or any other item of the accounting system that the travel agency needs to maintain can be easily identified under the aegis of travel management platforms like Pathfndr. These records are summed up at the end of each accounting period and can be accessed through website accounting automation processes run through Pathfndr.

Revenue/gains/income

The total value of services/products that a travel agency provides, the interest received from clients, commissions from partner operators and such other contributions that form a part of the total incoming monetary value can be identified under this accounting head. Revenue of the company is the total value of sales made, out of which the gains are identified as revenue minus the expenditure incurred.

The total cost that a travel agency incurs, including the cost in the long as well as short term, for running the business can be accounted for under the expenses head of the travel agency accounting system. Expenditures are also identified as the sum of cash outflow made by the agency in return of services or products received towards the entity’s operation in short as well as long run.

While maintaining the travel agency accounting system can be quite extensive for an agency, the use of travel management systems like Pathfndr can make the entire process of handling the business’s accounts simple and convenient, requiring minimal manual efforts and time. 

Financial Statements That Need to be Prepared

For any accounting system, including that of travel agency accounting , the output of the records need to be formally created based on the identified and accepted statements. These statements are popularly known as the financial statements of the travel agency and are categorized under income statements and position statements.

Income statement: An income statement of a travel agency is also maintained as a profit and loss account for the company. It is created to assess the overall profitability of the company for an identified period based on the income and expenditure made for the said duration. It is an important part of travel agency accounting.

Position statement: A position statement of a travel agency is created to assess its overall financial health. It is a periodic statement, and is often created at the end of the definite term identified for the accounting cycle. It usually comprises the assets and liabilities of the travel agency on a said date and helps identify the resources used and their financing.

In the overall consideration of travel agency accounting system maintenance for the travel agency, creating a dedicated department and hiring the skilled personnel for the purpose can be an extensive process. It also involves resource allocation and can be a tedious process overall. 

As an alternative, a travel agency can seek to automate the entire travel agency accounting system through necessary tools in place. One of the best ways to implement this automation is to create the business website through Pathfndr, a travel management platform that comes preset with all the tools necessary for accounting and bookkeeping of the agency. 

The automated processing tools are well-designed to automatically record and compute the accounting results as and when desired. So, the travel agency does not have to go through an extensive travel agency accounting process periodically.

Travel agency accounting is a crucial aspect that a travel agency needs to take care of at all times, irrespective of its scale and geography of operation. The availability of travel management platforms like Pathfndr and their integration of automated accounting tools amps up the overall financial management of the company. 

Creating your agency’s travel website through these platforms can benefit in so many more ways than just adequate and timely recording and assessment of the financial aspect of the business. 

Accounting Procedures for Travel Agencies

• Small Business
• Accounting & Bookkeeping
• Accounting Procedures
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Revenue Manager Duties

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When you start a travel agency, you need to keep accurate accounting records for your business. These records help you keep track of your agency's performance and are necessary for preparing your tax return. The most important accounting procedures for a travel agency are the cash flow statement, the general ledger and the income statement.

Cash Flow Management

One of the most basic goals of your accounting procedures is to keep track of your agency's cash flow. While running a travel agency with multiple daily transactions, it can be easy to lose track of your sales and your incoming payments. Through the use of your accounting software, you can keep track of your company's net cash flow from sales and expenses. This keeps track of the cash management of your business and helps identify any financial problems. Make sure that your agents post all business transactions in your accounting records.

General Ledger

Another accounting tool for a travel agency is the general ledger. The general ledger gives an overview of your company's current position. This ledger keeps track of your agency's assets, everything your company owns and what it owes. The accounting impact of all business transactions should be recorded on your general ledger through your accounting software. Most businesses update their ledgers daily or weekly. It is crucial to update your general ledger regularly so you can keep track of your agency's financial status.

Recognizing Revenue

An important accounting procedure for any business is the process of revenue recognition. This principle establishes when a business has officially earned revenue and can declare the earnings on its accounting statements and for taxes. A travel agency, as a service industry, must use the cash method for recognizing revenue. Your agency must recognize revenue as earned as soon as a payment is received. It does not matter when you complete your service to the customer, as soon as you receive payment, you must recognize the payment as revenue.

Income Statement

The last accounting procedure for running a travel agency is the maintenance of an income statement. The income statement records your total income and expenses to calculate your net profit over a period of time. The income statement serves a similar purpose as the cash flow statement. While the cash flow statement only keeps track of cash, the income statement measures the profits of your business. When you start your agency, the cash flow statement is more important as you get the handle of your company's daily cash flow. In the long-run, your income statement is more important as it gives a better description of your company's total profitability.

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David Rodeck has been writing professionally since 2011. He specializes in insurance, investment management and retirement planning for various websites. He graduated with a Bachelor of Science in economics from McGill University.

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Travel agencies play a pivotal role in the multifaceted landscape of various sectors and industries, ranging from transportation and hospitality to meticulous planning. Seamlessly managing the intricate web of responsibilities demands precise attention, particularly when it comes to navigating the labyrinth of financial complexities that emerge from their presence in diverse locations. Efficiently orchestrating the financial intricacies of such businesses commences with a robust accounting system.

Effective bookkeeping not only ensures a streamlined operation but also serves as the bedrock for sustained business growth. As a travel agency proprietor, the dynamic nature of the industry, characterized by ever-evolving trends and client needs, likely resonates with you. In the relentless pursuit of progress, spending countless hours deciphering cash flows, tracking expenses, analyzing revenue, and other critical financial metrics is undoubtedly a daunting prospect.

However, such challenges should not hinder your focus on steering the ship of your enterprise and capitalizing on the vast potential for expansion. Recognizing the indispensable significance of sound financial management , our comprehensive guide seeks to demystify the intricate terrain of accounting and bookkeeping tailored explicitly for the unique demands of travel agencies. By delving into the fundamental nuances of this indispensable process, we endeavor to equip you with invaluable insights, empowering you to streamline your business operations and cultivate sustainable growth.

Bookkeeping: Your Business’s Ticket for Successful Financial Landing

Effective bookkeeping is a fundamental pillar in the financial architecture of any thriving enterprise. Within the realm of modern business, meticulously recording and organizing all financial transactions is an indispensable facet known as bookkeeping. Its significance is not confined to mere administrative tasks; rather, it serves as the bedrock for informed decision-making and sustained fiscal health. By diligently documenting the ebb and flow of funds, tracking revenues, payroll disbursements, tax payments, and other monetary movements, businesses can gain comprehensive insights into their financial landscape.

For all stakeholders, ranging from discerning investors to vigilant regulators, the efficacy of financial data management cannot be overstated. The meticulous maintenance of transparent and detailed records is the key to not just tracking a company’s financial standing, but also fostering an environment of trust and accountability. The transparency afforded by comprehensive bookkeeping instills confidence in the stakeholders, engendering a sense of trust in the financial stability and operational integrity of the company.

Beyond Operations

The quintessential role played by bookkeeping extends beyond the realm of operational logistics. It serves as the lighthouse guiding a company through the tumultuous waters of regulatory compliance. By maintaining meticulous records and adhering to standardized bookkeeping practices, companies ensure seamless compliance with the labyrinthine regulations stipulated by the Internal Revenue Service (IRS) and other financial governing bodies. The repercussions of non-compliance can be onerous, resulting in legal entanglements and reputational damage. Effective bookkeeping not only mitigates these risks but also fosters a culture of prudence and integrity within the organization.

In the dynamic landscape of modern business, bookkeeping transcends the boundaries of a mere administrative function. It assumes the role of a compass, guiding businesses through the tempestuous terrain of financial uncertainties. Through the systematic recording and organization of financial data, bookkeeping arms businesses with the tools necessary to navigate the intricate web of financial complexities.

Furthermore, the importance of bookkeeping is underscored by its pivotal role in enabling businesses to gauge their financial health accurately. By meticulously summarizing the inflows and outflows of resources, businesses can derive invaluable insights into their operational efficiencies and identify potential areas for optimization. Periodic analyses of the meticulously maintained books of accounts yield comprehensive reports such as balance sheets, income statements, and cash flow statements, empowering businesses to chart strategic pathways for growth and expansion. These reports not only provide a panoramic view of the financial landscape but also serve as the springboard for setting realistic and strategic business goals.

As businesses expand their horizons and venture into new markets, the role of bookkeeping assumes an even more significant dimension. It becomes the bridge connecting operational efficacy with financial prudence, facilitating informed decision-making and fostering sustainable growth. The adage that ‘knowledge is power’ holds particularly true in the context of business, and bookkeeping serves as the conduit through which this knowledge is distilled into actionable insights and strategic foresight.

Significance of Bookkeeping for Travel Agencies

In the dynamic world of business, irrespective of its industry, scale, location, or ownership, bookkeeping stands as a cornerstone of financial management . This fundamental practice plays a pivotal role in maintaining an organized and comprehensive record of financial transactions, and travel agencies are no exception to this rule. As a travel agency owner, embracing regular bookkeeping is imperative for several compelling reasons.

Organizing Crucial Financial Information

• The financial records of your travel agency are a mirror reflecting the true health of your organization. Whether you’re seeking loans, grants, or conducting basic business analysis, having your financial information meticulously organized is paramount.
• Without proper bookkeeping, your transaction data is scattered, making it nearly impossible to determine your capital, profits, and areas that require attention. Bookkeeping bridges these gaps by consolidating your financial information into an easily readable format.

Informing Business Decisions

• Successful business ownership entails being a constant decision-maker, often in a high-pressure, fast-paced environment. Effective bookkeeping , followed by accounting, empowers you to make well-informed decisions.
• In the realm of travel agencies, decisions can range from hiring more employees, expanding geographically, diversifying services, securing additional office space, exploring new marketing channels, providing raises to your employees, or offering enticing customer discounts. The list is endless, and a deep dive into your financial records facilitates these decisions, enabling you to gauge your business’s financial capacity at any given moment.

Filing Taxes Accurately

• When the word ‘taxes’ is mentioned, deductions often come to mind. Accurate tax filing hinges on meticulous financial records. Inaccurate bookkeeping can transform tax season into a stressful and perplexing ordeal.
• Organized bookkeeping means you possess detailed records of your travel agency’s receipts, invoices, and balance sheets. This, in turn, simplifies the process of tax filing and can also help identify potential tax exemptions, thereby potentially reducing your tax liability.

Performance Analysis and Budgeting

• Effective financial planning and budgeting are underpinned by a comprehensive understanding of your past performance. Well-organized, clear, and up-to-date records, facilitated by diligent bookkeeping, allow you to assess past performance and formulate future strategies accordingly.
• For your travel agency, meaningful performance metrics may encompass annual revenue, revenue growth in comparison to the previous year, ROI on various marketing expenditures, and fluctuations in service costs over time. Sound financial planning requires budgeting for expenses ranging from personnel to marketing, investments, growth initiatives, and everything in between, which necessitates accurate bookkeeping.

Attracting Investors

• Scaling your travel agency often requires external investments in the form of capital, equity, grants, or debt. However, potential investors demand a lucid understanding of your business’s financials before committing funds.
• In the absence of comprehensive accounting records, investors cannot gauge the potential success or pitfalls of your travel agency, rendering them hesitant to invest. Venture capitalists and angel investors typically insist on up-to-date books as a prerequisite for funding. Without meticulous bookkeeping, securing vital investments becomes an arduous endeavor.

Simplify Your Travel Agency Bookkeeping with Remote Books Online

In conclusion, proficient bookkeeping stands as a foundational cornerstone of sound financial management for travel agencies . It serves as the bedrock for maintaining meticulously organized financial records, facilitating well-informed decision-making, seamlessly navigating intricate tax obligations, conducting comprehensive performance evaluations, and fostering a conducive environment for essential investments.

As a discerning proprietor of a travel agency, the incorporation of regular and rigorous bookkeeping practices transcends being a mere preference; it represents an unequivocal necessity for steering your enterprise towards an upward trajectory of expansion, profitability, and long-term viability. Operating within the realm of a fast-paced and dynamic industry such as travel, managing the intricate accounts single-handedly can readily become an overwhelming endeavor, particularly when one is actively pursuing business growth and scaling initiatives.

Gone are the antiquated days of manual accounting practices, replete with cumbersome registers and ledger books. Contemporary cloud-based accounting and bookkeeping solutions have ushered in an era of operational ease, streamlining crucial business functions in unprecedented ways.

Enter Remote Books Online, a comprehensive and specialized answer to all your financial management imperatives . Our tailored cloud-based bookkeeping and accounting services are precisely calibrated to meet the specific demands of your travel agency enterprise, effectively alleviating the burdens associated with bookkeeping, tax compliance, expense tracking, payment management, and an array of other intricate financial tasks. We pledge to handle these intricacies with meticulous care and attention to detail.

Embrace the transformational potential of Remote Books Online and redirect your energies towards the cultivation of astute business decisions, secure in the knowledge that your financial department is in the most capable of hands.

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August 16, 2023

Travel Agency Accounting: What Agency Owner Needs to Know

Travel agencies provide countless people with the opportunity for amazing, once-in-a-lifetime experiences. Owners and tour operators are experts in organizing incredible vacations, but may be less familiar with the financial side of the business, including the accounting process. As it is a crucial part of running a business, let’s dive deeper into how you can manage your financial reports more efficiently and strengthen your decision-making due to accurate numbers.

What is travel agency accounting, and why does it matter?

Accounting is the system of recording, organizing, and overseeing a business’s economic transactions. In tourism, accounting and bookkeeping allow travel agencies to oversee various financial operations, including selling travel packages, booking hotels, and managing travel expenses. To illustrate the importance of accounting for travel agencies, we’ll consider the example of an agency owner named Katherine.

Katherine’s tourism agency brought in many clients because she enjoyed meeting people, planning couples’ vacations, and making money. She loved coordinating trips for her clients, but she disliked having to record economic transactions. What was the result?

Because Katherine lacked the financial data and reports, she ended up missing out on tax deductions and paid more in taxes than she should have. She also had no idea how much capital the company actually had, and would occasionally overspend. Moreover, when Kate wanted to grow her business, she didn’t have accounting data to help her understand if she could afford to hire additional employees. Because Kate took a lax approach to collecting financial data, she was unable to make effective decisions and her business was left in a more uncertain situation.

If you own a travel agency, you can avoid these complications. A precise and effective accounting system will guarantee that you have reliable financial data at hand, helping you to optimize operations, strategize for the future, and prevent problems at tax time.

How to manage travel agency accounting

Travel agency accounting involves recording every transaction in which money flows into or out of the business. A travel agency brings in revenue when it sells tickets, hotel reservations, tour packages, and other services that ensure a comfortable journey. An agency’s expenditures, on the other hand, often include staff wages, advertising campaigns, travel spending, and maintenance of vehicles and equipment. Because there are so many transactions to oversee, it is important to establish an effective approach to bookkeeping for travel agencies.

Determine your accounting system

Before you can record transactions, you need to decide whether to use cash or accrual accounting. These methods are very different. Cash basis accounting only records transactions when funds enter or leave your account. This method, while intuitive, gives you only a limited understanding of your financial situation.

Accrual accounting considers transactions as they actually occur, regardless of when money changes hands. Suppose your customers book a $1,500 tour one month but plan to pay the next month. You should record this transaction at the time of booking, rather than when the customers have paid. This approach to accounting gives you a more comprehensive understanding of your financial position. It is also the only GAAP compliant method, which means it must be used for any official purposes.

Bookkeeping setup and bank account opening

Next, you need to select a method for recording operations. Consider the following criteria:

• Do you plan to do bookkeeping offline or online? An online, cloud-based system is the most popular and convenient solution.
• Will you do the accounting yourself or work with a financial specialist?
• What software are you planning to implement?

Before answering these questions, take into account the estimated size of your business. For smaller travel agencies, you may be able to handle your own bookkeeping to a certain extent. For larger businesses, you will need to recruit professional assistance and use the appropriate software.

Define payment methods

Consider how you want customers to pay bills – via cash, bank cards, or transfers. These options must be specified before the accounting process can begin, as your financial specialist will need to register and check all systems that you use to settle with counterparties. By sticking to this predefined list of payment methods, you can massively simplify your financial reporting workload.

Keep financial records

To effectively manage your books, you need to record every single transaction. Most travel agencies encounter daily transactions with customers, so you will need to consistently track the movement of funds. This financial data will help you to create the following reports:

• The income and expense statement. This document shows your profit and loss for a specific period. It allows you to identify how the agency is using its capital, as well as determine the current ratio of its assets to its liabilities.
• The cash flow report. This document demonstrates a firm’s liquidity, and warns of possible problems with cash that may prevent investment or the payment of bills.
• The balance sheet shows the company’s economic position in a certain period. It shows your assets, liabilities, and personal capital, which helps you to assess the state of your business and make decisions for its future development.

Careful monitoring and record-keeping is required to keep track of all revenue, expenditures, and other operations. You should check your books every few weeks to ensure that your information is accurate and up to date.

Financial statements for travel agencies

Financial statements reflect your travel agency’s current economic situation, including its strengths and weaknesses. They also inform stakeholders, external and internal, in the following ways:

• Owners: you should use your financial statements to make informed decisions about the company’s prospects for long-term growth, such as attracting investors. You can also control the flow of funds for specific purposes. Entrepreneurs often focus on the profit and loss statement.
• Lenders: these are individuals and financial institutions that lend money to businesses, including travel agencies. In order to assess whether an investment is worthwhile, investors will consult financial statements to see if the agency can pay off its debts in the short and long term.
• Suppliers: in tourism, this category includes carriers, tour operators, hotels, and other partners. In order to work with you, these counterparties will want to verify that your agency is solvent.

Prominent investors often consult with financial advisors for advice about how to maximize their investment. In order to recommend investment in your travel agency, these advisors need financial statements to back up their recommendation.

Tips to organize travel agency accounting

It is crucial to properly organize your finances. After all, it’s nearly impossible to grow your business if you don’t know what is going on financially. Consider a few recommendations from experts on effective financial management:

• Create separate accounts: your agency’s finances must be completely separate from any personal finances, including accounts and credit cards. Otherwise, you significantly complicate the accounting process.
• Classify expenses correctly: discuss with a tax professional how to reduce your tax base with deductions. For example, maybe you can earn a deduction for the food you offer to tourists during the tour or the cost of traveling from to the tour’s starting point. Knowing the laws allows you to classify each operation, which can help lower your tax burden.

Some entrepreneurs try to conduct their own travel agency accounting, but they don’t always have the time to consider every transaction. Instead of this risky approach, you should consult with financial professionals who can provide all the necessary accounting services, including business integration with bookkeeping platforms, account receivable and payable control, and more.

The best bookkeeping software for travel agencies

If you are in the travel business, you should find the best bookkeeping platform to suit your needs. You will need a program that provides a full range of features tailored to the needs of travel agencies. Some reputable platforms include:

• QuickBooks Online: this program is like the Swiss Army knife of financial software. It offers a suite of functions, from invoicing processing, budgetary control, and tax calculation, giving you everything you need for effective financial management in one platform.
• Xero: this is another cloud-based software that offers the same tools as QuickBooks, but with a more user-friendly interface. For added convenience, this system syncs with other digital products, such as travel booking apps and payment platforms.

When choosing software for your agency, you need to consider your budget. The market offers a range of free, inexpensive, and more costly software options. If you operate a smaller travel agency, you may not need the most intensive software.

Get support of professionals

Proper bookkeeping is critical to success as a travel agent. Accurate records of transactions facilitate financial reporting, improve cash flow management, and ensure compliance with tax laws.

BooksTime provides the precise and up-to-date financial data that tourism agencies need to operate effectively. Our seasoned accounting experts can take care of the entire process, or provide custom solutions for specific tasks, such as the preparing financial statements or setting up accounting software. Let our team optimize your finances so you can focus on organizing unforgettable vacations. Just let us know what bookkeeping services you need!

This article is not intended to provide tax, legal, or investment advice, and BooksTime does not provide any services in these areas. This material has been prepared for informational purposes only, and should not be relied upon for tax, legal, or investment purposes. These topics are complex and constantly changing. The information presented here may be incomplete or out of date. Be sure to consult a relevant professional. BooksTime is not responsible for your compliance or noncompliance with any laws or regulations.

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Author: Charles Lutwidge

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Chart of accounts travel expenses.

Travel expenses are an unavoidable part of business operations. Whether it’s attending conferences, meeting clients, or visiting remote project sites, travel can add up quickly. To ensure that your travel expenses are accurately recorded and organized in your financial statements, it’s crucial to have a well-designed chart of accounts.

What is a Chart of Accounts?

A chart of accounts is a comprehensive list of all the accounts used by a business to record financial transactions. It provides a standardized system for organizing and reporting financial data. A chart of accounts typically includes assets, liabilities, equity, revenue, and expense accounts.

Why is a Chart of Accounts Important for Travel Expenses?

A well-designed chart of accounts is essential for accurately tracking and reporting travel expenses. It allows you to categorize expenses by type, such as airfare, lodging, meals, and transportation. By doing so, you can easily monitor and control your travel expenses, identify areas for cost savings, and ensure compliance with tax laws.

How to Design a Chart of Accounts for Travel Expenses?

Designing a chart of accounts for travel expenses requires careful consideration of your business’s unique needs. Here are some steps to follow:

Step 1: Identify the Categories of Travel Expenses

Begin by identifying the different categories of travel expenses that your business incurs. These may include airfare, lodging, meals, transportation, and incidental expenses. Each category should have its own account in your chart of accounts.

Step 2: Determine the Account Numbering System

Determine the numbering system for your chart of accounts. This can be either a simple numbering system, such as 100 for assets, 200 for liabilities, 300 for equity, 400 for revenue, and 500 for expenses, or a more complex system that adds additional digits for each account.

Step 3: Set Up Sub-Accounts

Set up sub-accounts for each category of travel expenses. For example, under the transportation category, you may have sub-accounts for taxis, rental cars, and mileage reimbursement. This allows you to track expenses more accurately and make more informed decisions.

Step 4: Assign Budgets to Each Account

Assign budgets to each account based on your business’s needs and goals. This helps you to manage your travel expenses more effectively and avoid overspending in specific categories.

A well-designed chart of accounts is essential for accurately tracking and reporting travel expenses. By following the steps outlined above, you can create a customized chart of accounts that meets the unique needs of your business. Regularly reviewing and adjusting your chart of accounts can help you to manage your travel expenses more effectively and make more informed decisions.

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Maintaining accounting for travel agents

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Accounting is a major factor in any kind of business. It is designed to communicate, record, and pass the correct information to the internal as well as external users and recognized as an information system. The classification, recording, and summarizing accounting information to determine the financial strength and weakness of an agency is done through accounting . It is no doubt an important area in a travel agency business.

A travel agency profitably demands all accurate information, recordings, and preparations of its financial statements. As mentioned earlier, accounting plays a vital role in determining the correct and fair status of the travel agency business and also helps in making strategic plans and decisions. If you run a business or are thinking of running a travel agency soon, you must be preparing for some kind of investment to make for your business. It is really important to keep a record of every penny you use for starting or running your business to calculate the amount you have spent and the profit you had from it. The basic objective of accounting is to get the information of the profit and finance position of your travel business. To achieve this objective you are required to prepare and keep journals and some statements as listed below.

Maintaining Sales Journal by Travel Agencies

Sometimes some travel agents in a travel operation extend credit facilities for its customers like leisure and commercial clients—all these credit sales of travel business are recorded in a sales journal. A travel agency also makes some cash loans to its clients at certain points, which are also recorded in the sales journal. However not every travel agency can afford to extend credit. It has been recorded that only large-scale travel businesses do so for their corporate customers although a thorough check for credit is required prior to opening of a credit amount. A sales journal is extremely important for a travel agency during accounting .

Accounting for travel agents

Accounting Record of Cash Receipt

Keeping a record of receipts is extremely important for travel agencies during accounting . One of the important categories of accounting is to record all revenues received by the travel agency during the period of running the business. The transactions concerning cash, cards like debit or credits, and cheques for tour packages, commissions received by travel business from hotels and airlines, and other sources like vendors are all recorded in an accounting journal.

Account Receivable in Accounting

Account receivable is the term referred to the amount owned to producers, sellers, or suppliers for the purchase done by a travel agency for tourism services and travel products on credit. It is one of the important data for accounting to be recorded in the  travel business.

Keeping a Record of Cash Disbursement for Accounting

Also called a cost journal, in cash disbursement journal all cash outflows of travel business are recorded. It is important to keep track of all the operating expenses of a travel agency for ease in accounting . The salaries of employees of the  travel business, rents, telephone expenses, financial and legal expenses and administrative cash outflow, selling and distribution expenses, etc should all be recorded in the cash disbursement section of a travel operation.

Cash and cards transactions

Travel Ledger—The Chief Book of Accounts in Accounting

The chief book of accounts is the destination point of entries in journals and sub journals used for balancing the accounts of travel agency business. Balancing the accounts in accounting means the continuous and consistent check and verifications of accuracy of the accounting system of a travel agency. There are certain objectives of travel ledger in accounting for a travel agency as listed below.

• The identification of the revenue sources of travel agency
• Determining total sales in both cash and credits
• Determining total commission earned by travel agency through various sources
• Determining and finding out the total amount owned to travel ledger
• Evaluation of performances of all travel agencies recognized by travel ledger

Almost all travel agencies use Electronic Data Processing System or EDP these days for maintaining their accounting data resulting in an up to date record of each cash and credit transactions. The procedure of posting travel ledger is also really simple and understandable. All you have to do is enter the date, items, invoice number prior to entering the gross amount of cash and card transaction. Then calculate the commission and feed the travel agency commission column with that value. Now you have to subtract the commission from gross and enter the result in net amount column if any due is remaining simply put it in the due column.

Payroll Journal of Travel Agency for Accounting

Here, all the records of salaries and other benefits relating to finance are maintained by a travel agency. All these records include the number of employees and their salaries, insurance premiums, compensations, the total budget for salaries, housing facilities, medical facilities, etc. In any travel business, all the records from every journal are complied monthly and posted in a general ledger.

Any travel agency business requires a good accounting system for cash flow, profit and loss statistics, financial statements, which are basically the reflection of financial position and operating strength or weakness of a travel business, the establishment of budgets, etc. Accounting also helps in relating the responsibilities of executives, and a continuous comparison of the position of the travel agency can also be made by providing the agency useful parameters in measuring travel business’s performance. The travel agency management will be able to tape correct information and timely actions through the  accounting system. An accounting system in a travel agency helps to conduct its business efficiently and effectively as a whole.

Going the Digital Way

When it comes to data collating, calculation, and safety, online travel management software is the answer.

There are many such software in the market that you can check out and subscribe to. If you want to stay ahead of the competition, going digital and online is your best bet.

Also check:

How to start a travel agency

Itinerary software for travel agents

What is customer relationship management - all you need to know

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• Understanding the Chart of Accounts: A Fundamental Guide

By Charles Hall | Accounting

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What is a chart of accounts? If you are new to accounting, you may not know. But you need to understand this part of bookkeeping and accounting whether you use a manual system or an online one such as QuickBooks. A chart of accounts is helpful whether you are using FASB , GASB , or special purpose frameworks . 

Below, I explain what a chart of accounts is and how you will use it in bookkeeping and accounting. I also provide thirteen steps to developing a chart of accounts. 

What is a Chart of Accounts?

A chart of accounts (COA) is a structured list of an organization’s financial accounts used to categorize and record financial transactions. It serves as the backbone of an accounting system, providing a framework for organizing financial data in a logical manner . The COA is tailored to an organization’s needs and can vary widely in complexity.

The COA is usually hierarchical, with accounts organized in categories and subcategories . These categories include assets, liabilities, equity, revenue, and expenses. Each account within the COA is typically assigned a unique identifier, usually a numerical code (see examples below), to facilitate data entry and reporting.

Example Chart of Accounts

Here’s an example of a chart of accounts:

– 1010: Cash

– 1010.1 Operating Checking

– 1010.2 Payroll Checking

– 1010.3 Special Projects Checking

– 1020: Accounts Receivable

– 1030: Inventory

– 1040: Fixed Assets

– 1040.1: Buildings

– 1040.2: Machinery

Liabilities

– 2010: Accounts Payable

– 2020: Loan Payable

– 2030: Accrued Expenses

– 3010: Owner’s Capital

– 3020: Retained Earnings

– 4010: Sales Revenue

– 4020: Interest Income

– 5010: Cost of Goods Sold

– 5020: Rent Expense

– 5030: Utilities Expense

– 5040: Salaries and Wages

Next, I’ll show you how to create account codes. 

Account Coding

The numbers used to identify an account (e.g., 1010 for Cash) vary from entity to entity. Account coding involves several elements , including the following:

• Length of the code (the number of digits or characters in the account number)
• Use of spaces, dots, or spaces
• Hierarchical structure (using general categories and subcategories)
• Numerical and alphanumeric (numbers and letters; e.g., 1010AA-15)

Here are examples of operating cash accounts for different companies:

As you can see, the account code for each operating cash account can vary significantly from entity to entity . So, why the differences?

Factors Affecting Account Coding

Several factors drive the account coding , including the following:

• Laws or regulations (e.g., state law can dictate account coding for governments)
• Industry guidelines
• Business needs for certain information
• Software requirements (some software packages require the use of specific account coding, such as the number of characters)

Additionally, some entities use prefixes to identify the type of asset, liability, equity, revenue, or expense . Here are examples:

Using the prefixes, the cash and receivable accounts might appear as follows:

More complex entities may have longer account codes to accommodate the reporting needs of the entity. For example, a company might use prefix numbers for specific accounts, such as cash. Here’s an example with the first 10 representing assets and the second 10 representing cash.

So, why would you add these additional layers in the chart of account number? Additional account coding can make it easier to create financial statements. For example, in the preceding table, total cash can be determined by adding all accounts preceded with 10-10 .

So, a company can use account coding to generate certain information, such as total cash.

Next, I’ll show you how the chart of accounts is a part of the financial statement building process. 

The Building Blocks of Financial Statements

Key building blocks in the creation of financial statements include:

• Chart of accounts
• Journal entries
• General ledger
• Trial balance
• Financial statement

First , let’s look at how the chart of accounts and journal entries work together . 

The relationship between journal entries and the chart of accounts is akin to the relationship between a script and its cast of characters. The COA serves as the cast —a structured list of all accounts where financial transactions can be recorded. Journal entries, on the other hand, are the script — the actual recording of financial transactions as they occur.

Each line in a journal entry uses an account from the COA. The account’s unique identifier (e.g., 1010.1) is used to specify where the debit or credit is to be recorded.

Second , let’s see how the journal entries feed into the general ledger which feeds into the trial balance . 

The COA helps categorize transactions appropriately. For example, if a company makes a sale, it debits an asset account (like Accounts Receivable or Cash ) and credits a revenue account ( Sales Revenue ), as defined in the COA. The company records each transaction ( journal entry or accounting entry) in the general ledger account, and the general ledger totals create the trial balances .

For example, if there are ten checking account transactions in May, those are added or subtracted from the May 1 opening balance in the general ledger to arrive at the May 31 balance (e.g., $125,453 in the table below).

Third , here’s how the trial balance feeds into the financial statements . 

Now, the trial balance (the summary of all account balances) checking account balance reflects $125,453 at the end of May which is included in the financial statements . 

Accounting Sequence

So, let me summarize and say once more what the accounting sequence is.

• Accounting entries are made to the general ledger
• The general ledger feeds into the trial balance
• The trial balance feeds into the financial statement. 

Summarizing Accounts for Financial Statements

Here is an example of a company’s cash accounts being combined for presentation in the financial statements. 

From here, we use the total cash balance in the balance sheet.

Financial Statements

Here are a few lines in the balance sheet:

In addition to assisting with financial statement creation, there are other advantages to using a chart of accounts. 

Four Advantages to a Chart of Accounts

• Consistency and Standardization: The COA provides a standardized framework for recording transactions. This ensures that everyone in the organization uses the same numbering system when making accounting entries, which is crucial for consistency and accuracy.
• Budgeting and Analysis: The COA allows for easier budgeting and financial analysis. Management can assess performance against budgets or historical data by reviewing entries in specific accounts (e.g., sales).
• Compliance and Regulation: A well-defined COA ensures that journal entries comply with regulatory requirements for financial reporting, especially in sectors like governments and nonprofits.
• Error Detection: A well-organized COA can help you quickly identify accounting entry errors. If an entry doesn’t align with the account type (e.g., crediting an asset account when it should be debited), it’s easier to spot. 

In light of the above, you may be wondering, “What steps should I follow to get this done?”

Thirteen Steps to Set Up Your COA

Here are steps you can use to set up your COA:

• Understand the Business Structure: Before you start, understand the nature of the business or organization. Is it a manufacturing company, a service provider, a nonprofit, or a government entity? The type of organization will influence the accounts you need.
• Identify Reporting Needs: Determine the financial statements and reports the organization will need. For example, review sample city financial statements to see what is required if your entity is a city government. This will help you structure the COA to align with the financial statements.
• Determine the Basis of Accounting: Cash basis accounting, for example, differs from generally accepted accounting principles (GAAP). GAAP requires accrual accounts such as Accounts Receivable, and the cash basis of accounting does not.
• Consult Regulatory Guidelines: For certain types of organizations, especially governments and nonprofits, regulatory guidelines might dictate the structure of the COA.
• Choose a Numbering System: Decide your account numbering system. A common approach is to use a series of numbers, often in increments of 10 or 100, to allow for future additions.
• Create Main Categories: List the main categories of accounts, such as Assets, Liabilities, Equity, Revenue, and Expenses.
• Add Subcategories: Within each main category, add subcategories. For example, Assets contain Current Assets and Noncurrent Assets .
• Assign Account Numbers: Assign a unique number to each account based on your numbering system.
• Provide Descriptions: Briefly describe each account to clarify its purpose (e.g., operating cash). This is especially useful for anyone not involved in setting up the COA.
• Implement in Accounting Software: Most accounting software allows you to customize your COA. Input the accounts, numbers, and descriptions into the software. Before creating your COA, ensure your accounting software allows your desired numbering system. For example, the software might limit the account number to ten digits.
• Test and Revise: Test the COA by recording sample transactions after initial setup. Make any necessary adjustments.
• Train the Team: Ensure that everyone using the COA understands how to use it correctly.
• Review Periodically: Business needs change, and your COA should accommodate those changes. Review the COA periodically and make updates as necessary.

Additional Chart of Account Considerations

Here are some things you need to consider as you develop your chart of accounts:

• Balance the number of accounts with your reporting needs. Create additional accounts only when necessary. For example, create salary sub-accounts for each department (e.g., operations salaries, logistics salaries, oversight salaries, management salaries) in a large organization, but one salary account might be sufficient in a small entity.
• Some industries, such as healthcare, provide sample COAs. (You’ll find healthcare COA examples on the Internet. The same is true of other industries.) Moreover, some sectors have required COAs . For instance, local governments in Georgia must follow a state-mandated COA .
• There are competing issues in developing account codes: Desire for short account numbers versus Desire for additional information. Short account numbers take less time to enter, but they may limit the entity’s informational abilities. The result: the company may need to export account numbers and balances to Excel and manually compute the required information. Many entities lengthen their account numbers to automatically generate information without additional steps (such as exporting to Excel). The 10-10 prefix for all cash accounts (see above) is an example.
• A s you develop the chart of accounts, share it with all stakeholders , those that this will affect (e.g., department heads in your organization). It’s best to get negative feedback as you develop the chart of accounts, not after it is live in your accounting system. 
• If you are creating a new account coding system, consider all the information you need (now and in the future) and design the codes accordingly. A common problem for all entities is they outgrow their account codes ; when they do, the business may need to revamp the entire account coding—not a pleasant process.

Give Some Love to COA

As I close, let me encourage you to give your chart of account decisions plenty of thought . You’ll be glad you did. If you don’t give your chart of accounts the early love it deserves, you may regret it. Creating a new accounting systems six years out, for example, would be a major headache. 

I wish you well as you create your chart of accounts. 

About the Author

Charles Hall is a practicing CPA and Certified Fraud Examiner. For the last thirty-five years, he has primarily audited governments, nonprofits, and small businesses. He is the author of The Little Book of Local Government Fraud Prevention, The Why and How of Auditing, Audit Risk Assessment Made Easy, and Preparation of Financial Statements & Compilation Engagements. He frequently speaks at continuing education events. Charles consults with other CPA firms, assisting them with auditing and accounting issues.

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10 Best Accounting Software for Travel Agencies

Do you ever feel like you’re drowning in a sea of financial data? Are you tired of spending countless hours tracking down transaction records, trying to reconcile accounts, and manually generating financial reports?

If you’re a travel agency, you know that managing finances can be an overwhelming task. But fear not, intrepid travel agency, because we’re here to help you navigate the choppy waters of accounting software.

Let’s face it, money is the lifeblood of any business, and travel agencies are no exception. Without proper financial management, your business could easily go off course. That’s why it’s essential to have top-of-the-line accounting software to keep your finances organized and running smoothly.

In this article, we’ve compiled a list of the best accounting software options for travel agencies to help you make an informed decision. 

So, get ready to say “bon voyage” to financial stress! With the right software, you’ll be able to navigate the financial waters with ease, so you can focus on what you do best: creating unforgettable travel experiences for your clients. 

The List of Best Accounting Software for Travel Agencies:

1. quickbooks online.

Some may argue that QuickBooks Online is the best accounting software for travel agencies. QuickBooks online is the equivalent of a Swiss Army Knife. It’s packed with features to help you manage your finances, from invoicing and payment processing to expense tracking and tax preparation. Plus, it’s cloud-based, so you can access your financial information from anywhere, at any time. With QuickBooks Online, you’ll have everything you need to keep your travel business running smoothly.

Xero is another cloud-based accounting software for travel agencies. It offers similar features to QuickBooks Online but with a more user-friendly interface. Xero also integrates with a wide range of other business applications, such as travel booking platforms and payment gateways, so you can streamline your entire financial process.

3. FreshBooks

FreshBooks is a great choice for travel agencies that want easy-to-use accounting software that’s packed with features. With FreshBooks, you can send professional invoices, track expenses, and accept payments – all from one platform. Plus, its mobile app makes it easy to manage your finances on the go, whether you’re at the airport or lounging on a beach somewhere.

Wave is a free accounting software that’s perfect for small travel agencies. It’s ideal if you’re just starting out and don’t want to invest a lot of money in accounting software. Despite being free, Wave still offers a range of features, including invoicing, payment processing, and expense tracking. Plus, it integrates with a range of other business applications, so you can customize your financial process to suit your needs.

5. Zoho Books

Zoho Books is a cloud-based accounting software that’s perfect for travel agencies looking for a comprehensive solution. It offers invoicing, expense tracking, and payment processing capabilities, along with a mobile app that lets you manage your finances on the go. Plus, it integrates with other popular business applications like Zoho CRM, so you can streamline your entire financial process.

6. Sage Business Cloud Accounting

Sage Business Cloud Accounting is a powerful accounting software designed for small to medium-sized businesses. It offers a range of features including invoicing, payment processing, and expense tracking, along with inventory management and project management capabilities. With Sage Business Cloud Accounting, you’ll have all the tools you need to manage your finances and grow your travel business.

7. NetSuite

NetSuite is a cloud-based accounting software that offers a range of features to help travel agencies manage their finances. It provides invoicing, payment processing, and expense tracking capabilities, along with robust reporting and analytics to help you gain valuable insights into your finances. With NetSuite, you’ll have a comprehensive solution that seamlessly integrates with your other business applications.

8. Zoho Invoice

Zoho Invoice is a user-friendly accounting software that offers a range of features to help travel agencies manage their finances. It provides invoicing, payment processing, and expense tracking capabilities, along with time tracking and project management features. Zoho Invoice is also an online accounting software for travel agencies, so you can create professional invoices and accept payments online, making it easy to get paid for your travel services.

9. MYOB Essentials

MYOB Essentials is a cloud-based accounting software that offers a range of features for small to medium-sized travel agencies. It provides invoicing, payment processing, and expense tracking capabilities, along with inventory management and payroll features. MYOB Essentials also integrates with other popular business applications, such as payment gateways and customer relationship management (CRM) software.

Choosing the Right Accounting Software for Your Travel Agency

Now that you know some of the best accounting software options for travel agencies, how do you choose the right one for your business? Here are some factors to consider:

Your budget: Some accounting software options, like Wave and Zoho Invoice, are free or low-cost, while others, like NetSuite, can be quite expensive.

Your business size: If you’re a small travel agency, you may not need all the features of a larger accounting software solution like NetSuite. Look for software that fits your business size and needs.

Your industry-specific needs: If you need features like commission tracking or trip costing, consider accounting software options like TravelWorks that are specifically designed for the travel industry.

Integration with other business applications: Look for accounting software that integrates with other applications you use, such as payment gateways or CRM software, to streamline your financial process.

The level of support and customer service is another important factor to consider. It’s crucial to have access to knowledgeable support staff who can help you troubleshoot any issues that may arise and answer any questions you have about using the software.

The ease of use and user interface of the accounting software you’re considering. The software should be intuitive and user-friendly, allowing you to navigate through the system and perform tasks with ease.

Your long-term goals for your travel agency . As your business grows and evolves, your accounting software needs may change as well. Look for software that can scale your business and offer advanced features as you need them.

Don’t Let Finances Hold You Down: Accounting Software Can Help You Soar!

Managing your travel agency’s finances can be a daunting task, but with the right accounting software, you can make it a breeze. From the free and easy-to-use options like Wave and Zoho Invoice to more comprehensive solutions like NetSuite and TravelWorks, there’s a software option to suit every travel agency’s needs.

It’s not just about choosing the right accounting software, it’s also about seamlessly integrating it with your other business applications. That’s why Travel Booster’s comprehensive ERP comes with endless integrations, making it seamless to integrate your accounting software. This results in an even more efficient financial process, freeing up your time to focus on other aspects of your business.

And we know that every travel agency has unique financial needs, which is why our software supports all types of accounting transaction methods, whether it’s domestic/outgoing, agents vs. sales and purchases, or anything in between.

Our unique TBAPI allows us to export all accounting data into a generic Excel format that can be easily transmitted onto any accounting software. This means that you have the freedom to choose the best accounting software for your travel agency’s needs, without worrying about compatibility issues. We believe that financial management should be stress-free and seamless, and our accounting software is designed to make that a reality.

So if you want to take your travel agency’s financial management to the next level, look no further than Travel Booster. Our comprehensive ERP enables endless integrations, providing you with the tools you need to succeed in today’s competitive travel industry.

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Setting Up Your Travel Agency’s Financials

Most of us aren’t in the travel business because we love numbers and bookkeeping. Yet, as a small business owner, you’re most likely going to have to be doing the bookkeeping (as well as the sales, marketing, and customer service). So let me give you a heads up on how to start your agency with a strong financial infrastructure. 

This is one of those “learn from my mistakes” and “I wish someone had told me this when I started” articles. 😊

Setting Up a Business Bank Account

For those of you taking our 7-day Setup Challenge , you just chose your business structure ! Yay! (For those of you not taking our challenge, you really should!)

Keeping [business and personal finances] separate from the get-go will save you a lot of time in the future!

Why is business structure important when it comes to setting up a business bank account? Well, if you’re a Sole Proprietor you can use your personal bank account, so you don’t technically need to have a separate business bank account. That said—and please, take it from me—it’s a hassle to mix your finances. Keeping them separate from the get-go will save you a lot of time in the future! If you listen to one thing in this article, this should be it.

For those of you that chose an LLC or S Corp route for your travel agency business structure, I didn’t forget about you! Except for Sole Proprietor, any other business structure is required to set up a business bank account whether you want to or not. (IRS’s rules, not mine.)

Let's discuss.

How do Business Bank Accounts Differ From Personal Ones?

Business bank accounts are going to differ from your personal bank account in a few ways:

• You vs. Your Agency: Your clients make checks out to your travel agency, not your personal name. It’s thrilling seeing your first check with your agency's name on it!
• Interest (or lack thereof): Not all business accounts earn interest, either on the savings or checking. Boo. 🙁
• Cash Deposit Limits: Most biz bank accounts will have a limit on the amount of cash you can deposit each month. After that, plan for a fee. Note: Most agencies aren’t going to reach the monthly limits and if you do, don’t worry, the fees aren’t going to require that you sell your firstborn. (They vary quite a bit, but $5,000+/month for a cash deposit limit is a safe bet).
• Monthly Transaction Limits:  You’d think banks would want you to be making loads-o-business deposits since that means they’d be sitting on heaps of your cash (seeing how they’re not paying out interest and all) … but no. Since business accounts usually involve more transactions than personal accounts, they’re deemed to be more work. As such, the banks will need some compensation.

Business and personal bank accounts do have some similarities—you can also count on minimums to open your account and monthly fees! That is . . . unless you look at a CREDIT UNION (enter cue music)!!

Credit Unions, A Steph Favorite

Here’s my little plug. A community credit union is a great option and typically less expensive than the Big Banks. Credit union business accounts typically have fewer fees and they usually do away with the cash deposit limits —deposit away! You can search for a local credit union here .

Still not sold? Alright, I see I need to pull at your lil’ heartstrings and not just your financial sensibilities.

Here’s my story: I personally switched over all my bank accounts from Wells Fargo to my local credit union once I started Host Agency Reviews. Yes, it was a bit of a hassle, but as a small business owner, I liked the idea of supporting a local, non-profit small business that was owned by its members. Bonus : My credit union business account was free to open and had fewer (and lower) fees than Wells Fargo’s business account option!

And if that doesn’t sway you, maybe the quote on my local bus stop bench will, Big Banks, No Thanks! (Or, the memory of the 2008 Financial Meltdown might do the trick?). End of plug.

Things to Consider When Choosing a Bank

When you’re choosing your banking partner, here’s a few things you may want to consider:

1. Location:

The closer, the better. When it’s 4:30 pm and you have a check you need to be cashed before the end of the day, the miles are gonna matter.

2. Branches:

Does your bank have other branches? Of course, one of the advantages of the Big Banks is that they have a zillion branches, which is admittedly quite handy.

Are there hidden (or not so hidden) fees? Here are fees to look out for so you can see what aligns with your budget:

• Monthly service fees
• Cash handling fees
• Excess Transaction fees
• Overdraft/stop check/cashier’s check/wire transfer fees

In addition to fees, here are two other factors that might influence your choice:

• Minimum to Open
• Average Monthly Balance: Do you need to maintain a certain average balance?

It’s up to you what you prioritize! Every bank’s website will have its business account fees listed. Just make sure you’re reading the fine print!

Business Documents Needed by Banks

Imagine if I went into my bank and told them I had started up a new agency and would like to open a business checking account. They’re going to want some proof showing my agency is a legal business and that I’m the owner of said agency.

For those of you doing the 7-day Setup , you’ve already taken care of registering your name with your state and getting your Federal Employment Identification Number (FEIN) in yesterday’s action items. (If that last sentence was gibberish to you, make sure to sign up for our free 7-Day Setup challenge !)

It’s always good to give the bank a call before going in to set up your new business account to ensure you’re bringing everything you need. But, I know you’re chomping at the bit so mentally prepare to bring this stuff in (listed by business type):

Sole Proprietorship:

Here's what you need for sole proprietorship:

• SS# or FEIN (and I really, really recommend getting an FEIN)
• Business license showing both business and owner’s name, or
• Business name filing document , such as a Fictitious Name Certificate or Certificate of Trade Name, showing both business and owner’s name
• Your First Born (HA! Gotcha! Just making sure you were paying attention.)

Partnership

Here's what you need for a partnership:

• Partnership Agreement showing business name and name of partners, and
• Business name filing document , such as Fictitious Name Certificate or Certificate of Trade Name, showing business name and name of partners

Is an LLC more your style? Here's what documents you need:

• FEIN (notice a pattern here?)
• Articles of Organization or Certificate of Formation
• Corporate Resolution identifying authorized signers if officer names are not listed on Articles of Organization or Certificate of Formation

Opening a Business Credit Card 

Your business is going to have expenses and a business credit card will be pretty hard to live without. You’ve already got a credit card, you say? Just like a business bank account, a separate business credit card isn’t required for a Sole Proprietor (although I do recommend it), but it is required for those of you going the LLC or any other route.

Opening your credit card right away—even if you don’t need it yet—ensures that your card will be ready when the rubber hits the road. Which is soon, by the way! Eeeeekkkk!

We have a few tips on how to walk through the process of finding the right credit card for your agency below:

• 5 Best Business Credit Cards
• Top Travel Brand Credit Cards
• Find the Best Credit Card Rewards for Your Agency

As for which one is best . . . well, I can’t really answer that as some people love the airline points, some love cashback rewards. I love the ones that allow me to put a picture of my dog Rigel on the front of it. (I have my priorities!) 😊

Looking for something a little more methodical perhaps? Download our credit card tracker spreadsheet to decide what is best for you! Here's a video tutorial on how it works:

Want to give it a go? Just download it below

If you have a favorite, please feel to comment below!

Choosing Bookkeeping Software

Goodness me oh my … are we done yet?! *sigh* No. And before I launch into bookkeeping, I want to share a resource that's going to help put your immaculate bookkeeping to good use . . . HAR's tax organizer! You can download it below (and take a breather!)

Okay. Back to the task at hand. Now we’ve got to keep track of all the money coming in and out of that darn bank account we set up and the credit card we applied for! Doh, what were we thinking about setting those up? 🙂

The government is going to want to know how much commission you brought in from your travel sales so you need to keep track of that.

I’m going to launch in to bookkeeping software options, I promise, but I think it’d be smart to first explain what it is and why it’s so important . Bookkeeping helps keep track of your day-to-day expenses/income so that when tax time comes, everything is all organized in its proper category!

The government is going to want to know how much commission you brought in from your travel sales so you need to keep track of that, among tons of other things. The Balance Small Business has a recent article explaining the differences between an accountant, CPA, and bookkeeper if you’ve got 3 minutes.

Here’s the truth, most new travel agents I spoke with started with Excel as their bookkeeping software and do it themselves . It’s not pretty but it gets the job done . . . and for free!  You can check out the original thread here  (and please, feel free to share your experiences in the comments!)

Now, if you have extra cash burning a hole in your pocket, you can always purchase some bookkeeping software to make life a little easier (and prettier). Some of these are affiliate links, which means I make a little bit of moola when you buy something. Your purchase not only helps your business but helps supports Rigel's marrowbone obsession. 🙂

Without further ado, here are the main players most travel agents use for bookkeeping software:

1. Excel (Windows) , Numbers (Mac), or Google Sheets (Windows/Mac) : Tried and true. Yet at the same time tedious and not

• Excel Price: $139.99
• Numbers Price: Free for Mac users
• Google Sheets Price: Free with Gmail account

2. QuickBooks : Available in either the desktop (QuickBooks Pro) or online version (QBO). I use QBO and have been happy with the features, functionality. The support can take forever, though!

• Price: 30-day free trial. Their pricing changes with sales, but plan for $199 for the desktop version, $10/mo for QB online.

3. Shoeboxed : Send your receipts in one big envelope and the magic bookkeeping elf organizes it all! Integrates with Quickbooks.

• Price:  30-day free trial. Starts at $15/mo

4. Quicken : Also by Intuit, the makers of Quickbooks. Travel agents that use Quicken for their personal bookkeeping (which is what it’s intended for) often end up using it for business.

• Note : If your company structure is an LLC, go with Quickbooks . Having your personal and business financials mixed is a no-no for corporations.

5. TRAMS : This is the go-to, legacy, travel-agency-specific accounting system. In April 2021, it was sold from Sabre back to the original owner (Tres Technologies), which we're all pretty excited about since Sabre did a whole lotta nothing for the past 15 years with TRAMS. If you're a hosted agent with only your sales to keep track of, TRAMS, as it is now, is probably overkill. However, it's a great fit for larger agencies with more complex bookkeeping. The other thing to note is that Tres Technologies sounds like they're cooking up a new product to bring travel agency accounting into the 21st century! So keep an eye out for word on that.

• Price: As of now, June 2021, there is no pricing up on Tres Technologies website for TRAMS. Hopefully soon!

Once you’ve chosen your bookkeeping software, you’ll need to decide if you want to teach yourself the software, or you can look into hiring a professional bookkeeper (which I eventually ended up doing once my biz got off the ground because I am so terribly bad with accounting!).

Not sure where to start? Just so happens I have a few suggestions to help you find a bookkeeper for your travel agency:

1. Local Bookkeeper: Word of mouth can’t be beaten! Plus you’ll be giving this person access to your bank accounts and other sensitive information, it’s nice to meet them in person. Try putting up a post on Facebook, asking other entrepreneurs, or asking your tax person for a referral.

• Price : ~ $30-50/hr

2. Bench : I like to keep it local but sometimes, working with someone online is just plain easier. Bench gets great reviews but at around $125/mo, it’s probably spendier than a local bookkeeper.

• Price : Starts at $125/month for annual pre-paid plans

Payroll Software

When it comes to payroll, I'm just going to recommend one company to you. Gusto .

For those of use that are S Corps or another business structure that has to run payroll, we need to dish out a bit extra each month for payroll software.

You're not going to need payroll if you're a sole proprietor or single-member LLC that is being taxed as a sole proprietor. That's because you're lucky and don't have to mess with payroll! But, for those of us that are S Corps or another business structure that has to run payroll, we need to dish out a bit extra each month for payroll software.

I started with Intuit's payroll software since it integrated so nicely with Quickbooks, but their prices kept increasing—my monthly fee nearly doubled over the course of a few years!

There are other payroll companies out there, but they are more legacy companies. And what legacy means is opaque pricing (call for more details), bloated programs, and high-pressure sales. The legacy companies target medium and large-size companies. They have way more bells and whistles than most small businesses need for their payroll.

• Gusto : It's easy to set up and navigate, affordable, and does the job. Their customer support is also superb—take this from a woman who has spent days on the phone trying to set up payroll at another place.
• Pricing : Currently $19/mo with the COVID Small Business Relief Pricing , regularly $39/mo.

Note: Yes, you can do payroll manually but that requires A LOT of work. You have to submit the taxes to the federal and state governments, submit unemployment insurance reports and money, calculate any other withholdings. It's brutal.

A Video on Leveraging Your Financial Routine with Tech

Before I launch in, I wanted to share financial whiz, Stephanie Cannon's, Host Week 2024 EduSpot, From Manual to "Magic" - Leveraging Tech As Part of Your Financial Routine. She is what we officially refer to as "a numbers whisperer."

Breaking it Down, A Recap

That was A LOT of info. Cheers for getting to the end! Your brain is probably brimming over with info so I want to recap things one more time. Here are your key takeaways:

• Open a business bank account (*cough* with a credit union)
• Open a business credit card
• Decide how you want to do your bookkeeping (yourself or hire it out)
• Give this article a FB like/tweet/share or comment!

I know what you’re thinking, “Man, she’s long-winded. She babbled on for ages and then summed it up in four tiny bullet points.” As a reward, you'll get a bonus worksheet to help you choose a bank if you sign up for our  7-day Setup Challenge  🙂 Thanks for sticking with me!

Need More More Support Getting Your Agency Set Up? We Have Just the Thing

Are you in earlier stages of getting your agency set up? Kudos to you for thinking about your financial infrastructure from the get-go. That said, it's complicated, and making the best decisions right now about financial structure can save you money in the long run. If you want more personalized support in regard to finances and all things starting an agency, check out HAR's new course, The Complete Guide to Starting a Travel Agency .

The course is written and taught by yours truly and Bridget Lee professional educator with deep roots in the travel industry. Maybe you notice a last name similarity? We're sisters and we both came up in a family that is deeply rooted in the industry. Check it out !

Happy business building!

[Editorial Note:] Opinions expressed here are mine alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post. Because we all know credit cards and banks wouldn't be talking about and endorsing local credit unions or even mentioning the 2008 Financial Crisis. :) That's just straight-up Steph talk! More editorial fun: This was originally posted in Jan. 2017, and was updated on publish date listed! Ciao!

About the Author

Steph grew up in the travel industry. She worked with thousands of agents in her role as a former host agency director before leaving in 2012 to start HAR. She's insatiably curious, loves her pups Fennec and Orion, and -- in case you haven't noticed -- is pretty quirky and free-spirited.

If you’re looking for Steph, she leaves a trace where ever she goes! You can find her on Facebook, Instagram, LinkedIn and Pinterest as 'iamstephly'. 🙂 She doesn't do TikTok as no one would ever see her again.

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Best Travel Agency Accounting Software of AccFlex ERP System

Tourism is one of the most important national income sources for many countries because it provides foreign currency for the country that is most attractive to tourists. In 2019, the number of tourists worldwide reached 1.5 billion, and the tourism forms vary, there are (religious, archaeological, recreational, therapeutic, discovery, etc.) tourism, and what a large number of tourists need services (hotel reservations, flight reservations, rental car, recreational trips, transfers, sightseeing) that the tourist cannot do it himself, there must have been a large number of tourism companies specializing in one or more of these services that can be provided to tourists, in Egypt alone, there were approximately 19,000 tourism companies that perform a range of services between (hotel reservations, airline tickets reservations, organizing internal trips, Hajj and Umrah services, religious tourism, etc.), the Egyptian tourism companies are divided into three categories, which is the (a) category, which is a general activity tourism company that provides Hajj and Umrah services and domestic and foreign tourism, and the (B) category tourism company, which provides the tourist transport services and the (C) category tourism company, which is a tourism company is responsible only for providing services as an agent for the major companies and we cannot ignore the domestic tourism, so the role of tourism companies is not limited to providing services to foreign tourists, but it may be related to providing tourism and recreational services to residents as well, and with this large number of tourism companies in addition to the other parties related to tourism and travel activities such as travel agents and the International Air Transport Association (IATA), it was necessary to design an accounting system that is appropriate to the nature of the activity and organize the financial and accounting matters for the various travel and tourism companies in its various categories (A - B - C ...).

Definition of the accounting system for Travel Agencies 

Before we define the accounting system of the tourism and travel companies, we must first know what is accounting? Accounting is defined as the science that records and sorts the financial transactions data  according to a specific system to translate these data into financial information (reports) that show the financial position of the company (the organization), the results of its business of profits or losses and provide this information (reports) to internal parties (senior management- corporate departments - partners - shareholders ....) and the external parties (bank- suppliers- customers- Tax Authority-.....) these reports include (Trial Balance- General Ledger- Subsidiary Ledger- Account Balance....) as well as the financial statements such as (Financial Position- Balance Sheet- Income Statement- Cash Flow Statement- Statement of Changes in Equity ...).

It cannot be said that the accounting system of travel and tourism companies differs from the accounting system of any other company, as most of the parent accounts are common, but there may be some differences that distinguish the travel and tourism companies from other companies, travel and tourism activity are divided into two parts

Part 1: Tourism/ which are all about hotel reservations, restaurants, transportation, and recreational trips to the tourist in the country he is visiting, and of course these operations result in expenses and revenues, these reservations may be prepaid or maybe later and the accounting treatment for each case is separately and usually in the tourism companies, such procedures are performed between the tourism company and a travel agent on behalf of the hotel to be booked

Part 2: Travel / is all about airline ticket reservations for the tourist to the country which he wants to travel, and the procedures that follow such as (date change- ticket cancellation- postponing travel- ticket refund - etc.) the expenses and revenues that result from these operations may be cash or maybe credit, the accounting treatment is done for all airline ticket reservations, and the tourism company does not book directly on the airline website (Saudi Arabian Airlines- EgyptAir- Emirates Airline....) but there is a global travel agent website that all tourism companies deal through which is "International Air Transport Association" abbreviated as "IATA",  this website is considered as a travel agent between the tourism company and the airline and is the only credit account in travel cases as the airline pays for the International Air Transport Association twice a month on 15 and 31 days at the end of each month for the total value of the travel tickets due.

Revenues and Expenses of Travel Agencies

The revenues of travel and tourism companies vary according to the size of the tourism company, for example, the (C) category tourism companies, their revenues are in commissions resulting from the difference between the service sales revenue and the cost of service, whereas the revenues of the (A) category large travel and tourism company vary as follows:

1- The commission of hotel reservations resulting from the difference between hotel reservation revenues and the cost of the reservation.

2- The commission of airline ticket reservations about the difference between airline ticket revenues and the cost of the reservation.

3- Revenues from domestic and international tourism (archaeological tourism- religious tourism- performance of the Hajj and Umrah rituals- domestic tourism - recreational tours - car rental - bus revenues - other revenues ... ).

The Tourism Company issues invoices with its benefits, which include forms known as operating orders (a form that explains operating process data) and shows the following data:

(Driver's name- operating hour- operation date- operation order number- number of tourists- customer name- the name of the supervisor/ tour guide- car data- .....), then operating orders are collected related to each destination separately (a specific hotel- a specific restaurant- a specific Nile steamer- ....), an invoice is issued with the total value of the operating orders indicating the same operating order data added to it (the name of the destination to which the invoice is directed- invoice amount- value-added tax value- payment period....) and it may be done collecting the value of this invoice in cash once the operation order is completed or a credit collection according to the agreement with the party to collect the invoices from them, and all operating orders are recorded monthly in what is called a " movement journal" that differs from the subsidiary ledger for revenue, which contains an analysis of the types of revenues of the tourism company and the value of each income and percentage of each activity from the company's total revenue.

As for travel and tourism companies expenses, they vary between activity costs and general and administrative expense

A - Activity costs and include

1- Booked airline ticket costs that are paid through the IATA website.

2- Hotel booking costs which are paid to travel agents.

3- The costs of tourism trips (religious- archaeological- recreational- domestic- Hajj and Umrah ...).

4- The costs of the various tourism transportation (buses- cars- trucks-...) of drivers' wages, fuel, oils, spare parts, licenses fees, transit fees, etc.

5- Wages and salaries of supervisors, tour guides, and accompanying tourist groups.

6- Commissions of agents and marketers of tourism companies.

7- The costs of meals, clothing, and benefits in kind for employees or tourist groups.

B - General and Administrative (G&A) Expenses:

These are the expenses related to the salaries of the administration staff, the administrative and financial system of the company, as well as the rent of the company's headquarters, warehouses, utilities expenses, stationery, paper, printing inks, advertising expenses, marketing expenses, annual subscriptions of the website and others.

All revenues and expenses for the travel and tourism companies are recorded and classified in the chart of accounts to get the accounting reports that show the value of the company’s profits or losses during the fiscal year, to know how to record and classify revenues and expenses, it is first necessary to identify the chart of accounts for the travel and tourism company.

Chart of Accounts for a Travel Agency

The chart of accounts is similar for all companies; the basis of the chart of accounts is the presence of the parent accounts (assets- liabilities- equity- revenue- expense), each account is branched from a group of child accounts that may differ from one company to another, but the general layout of the chart of accounts remains the same, and the travel and tourism company chart of accounts can be displayed are as follows:

After we have covered the accounting system in the travel and tourism companies and we have covered the chart of accounts the following, we will discuss the journal entries for the most important operations of travel and tourism companies. 

Journal Entries for Travel Agencies

Journal entries for travel and tourism companies are not different from journal entries for any company, the accounting treatment is the same, but the tourism and travel companies have some of their terms

1- Revenue Journal Entries

The revenues of tourism and travel companies vary, for example

A -The case of the sale of airline tickets the journal entry is as follows: 

Note that the (Account Payable) account is only one account, BSP Payable

This is because the tourism company does not deal directly with the airline, but there is a global travel agent website, "IATA", that considers this site as an agent between all tourism companies deal with it, and it is

Tourism and airline, as we note that the tourism company is just a mediator in the performance of the service, as its revenues from sales of airline tickets are just the commission that you get from the customer and it is the difference between the cost of the airline ticket and the revenue from ticket sales to the customer.

The sale of these tickets may also be a credit or a cash sale and the account receivable collection journal entry is as follows:

 While the tourism company pays the International Air Transport Association (IATA)

Twice a month, on the 15th and on the 31st of the end of each month, by the total value of the travel tickets due,

Accounts payable journal entry is as follows: 

Ticket Refunding Cases

The process of refunding tickets is done according to the policies and procedures regulated by each airline, therefore, the refund time may vary from one company to another, and the journal entry for refunding tickets is as follows:

We note that we have created a journal entry by reversing the side of accrual to cancel the accounting effect for it, and when to refund the ticket value to the customer we must note that there are airlines that refund the value of tickets at the same time and there are companies that take some time to agree to refund the ticket, and therefore clearing account is created it is called (the refund ticket) and accrual is creating for it, and upon payment, the account of the refund ticket is closed by the journal entry 

B- The case of sale of hotels reservations

the tourism company does not directly deal with hotels while booking hotels for customers, but it is usually a travel agent who will make the reservation and the tourism company be paid the travel agent, there is more than one travel agent that the company can deal with and the journal entry is as follows:

When Paying to the travel agent, the journal entry is as follows: 

C. Tourism Transportation Revenues Mostly

the tourism companies often own a tourism transportation fleet that transports tourist groups within the country to be visited, and the tourism company may rent tourist buses to another company or office and payment may be cash or credit 

When Paying 

D- Other Tourism Revenues

There are many other revenues for tourism companies, which are (domestic tourism revenues- revenues from Hajj and Umrah trips- revenues from archaeological tourism- revenues from recreational tourism .... and others) which may be in contracts between the tourism company and a tourist marketing company and the payment is (credit), or the deal with the customer may be direct, and in most cases, the payment is in cash or prepaid, and the journal entries will be as follows:

2- Expense Journal Entries

The expense journal entries for tourism companies do not differ from other journal entries; there are costs (operational- marketing- general and administrative...), in most of recording the costs to the travel and tourism company depend on the so-called (operating), which is a form that shows all the details of the activity performed by the tourism company and the tourist group data, bus number, service, and all of its data, through this form, the service revenues, and expenses can be linked.

Expense Journal Entries

Accounting Software for Travel Agencies

The activities of the tourism companies vary, as there are (religious tourism, Hajj and Umrah, archeological tourism, recreational tourism, airline reservations, etc.) this means that there are many revenues, many expenses, and costs required to complete these activities, this makes it difficult to manage all these activities by relying on traditional paper-based systems, whether in general ledger management, fixed assets, or human resources, as well as hotel reservations, flights, etc. the tourism companies should rely on the accounting software to manage their activities and one of the best unique accounting software for the travel agencies is AccFlex ERP General Ledger Software, the best Arabic software for managing travel and tourism company general ledger accounts at all, the software has many customers (tourism and travel companies) in Egypt and the Middle East, and AccFlex ERP General Ledger Software is characterized by the following

1- Managing accounting periods for the travel and tourism companies with full flexibility, the accounting periods can be divided into a number (1-4-12) accounting period and closing each period separately, as well as managing revenue and expenses for each accounting period, the deprecation of its assets and posting its balances.

2- A flexible chart of accounts through which you can create an infinite number of parent/child accounts and change the order of accounts, as well as transfer journal entries from one account to another account.

3- Creating an infinite number of custom screens in the cash management, you can create a screen for receipts and another for payments, Airline Revenue screen, Tourism Bookings screen, etc., and assign the authorizations for each user in the software (add- edit- delete- print ... ) also, setting the user authorizations to access on screens only.

4- Creating an infinite number of customers and suppliers and set their opening balance.

5- Creating an infinite number of cost centers and branches for the travel and tourism company and assign them to the accounts.

6- A screen for foreign currency revaluation and the ability of the software to deal with more than one currency, the value of the currency can be updated at any time and the software automatically affects the values and accounts.

7- The unique screen for entering journal entries enables an infinite number of journal entries to be entered, whether by creating the journal entry or by importing the journal entry data from an Excel file, and adding attachments to the journal entry, the software is characterized by a unique set of warning and alert messages that prevent an error when creating journal entries.

8- A complete system of review and approve journal entries processes through which the chief accountant or financial manager can view the details of each journal entry, user name, data, type of journal entry, date, value, and sides (debit/credit).

9-An integrated tax system starting from linking customers and suppliers with their tax data (Tax Registration Number- Taxation Department Name- Tax ID Number....) and ending with creating the tax notifications of Withholding Tax for the customers and suppliers as well as preparing Form no (41 Withholding and Collection) every 3 months as well as the Value Added Tax - Form-10 every month.

10- A unique set of reports covering all the needs of the tourism company of information on financial statements, whether (General Ledger- Subsidiary Ledger- Subsidiary Ledger for Cost Centers- Subsidiary Ledger for Accounts/ Cost Centers- Accounts Receivable/ Payable Balances Report- Revenue and Expense Summary Report- American General Journal Report- Budget Report- Trial Balance Report- Income Statement Reports- Balance Sheet Report- Financial Position Report- Cash Flow Report- Changes in Equity Report).

11- A Fixed Asset Management Module comes with the General Ledger Software, which distinguishes the software from other software in which the Fixed Asset Management Software as another software separate from the General Ledger Software, and through the Fixed Asset Management Module, the travel and tourism company can manage the tourism transportation fleet through the Adding an Asset screen by entering the asset data (asset name, type of asset, its value, the method of depreciation, the employee responsible for the asset, cost center ....) also, the location of the asset can be changed from one location to another and the software automatically allocates the costs to the cost centers.

12- Adding an infinite number of assets in a split second using an Excel file, as the software supports the feature of importing from Excel. 

13- Creating various transactions on the assets such as (appreciation, depreciation, write-off, scrapping, selling, etc.) and the software automatically creates fixed assets journal entries and affecting the chart of accounts.

14- The software provides unique reports on the assets, which the travel and tourism companies can track and monitor the assets status as well as controls their costs, there are reports on (Asset Additions- Depreciation of Assets- Types of Assets- Book Value of Assets- Sold Assets- Written off Assets- Scrap Assets- Method of Asset Depreciation- Asset Subsidiary Ledger- Asset List By Cost Center- Asset Status History).

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Home » Chart of Accounts Complete list with Descriptions (for QuickBooks)

Chart of Accounts Complete list with Descriptions (for QuickBooks)

• Hector Garcia
• August 7, 2021

UPDATED 08/06/2021

First , If you need to setup a free 30-day trial of QuickBooks Online use this link: https://quickbooks.intuit.com/partners/irp/?cid=irp-4337#pricing If you keep the account, you will get 30% off for 12 months, best deal out there!

Second , if you want an IMPORTABLE chart of accounts for QuickBooks, you can purchase my kit for my customized “Ultimate Chart of Accounts” for Online or Desktop that I setup for my clients, here: https://qbkaccounting.com/ultimate-chart-of-accounts-for-quickbooks-desktop/

Third, I do have a free google sheets (downloadable to excel) spreadsheet with a complete list of accounts by industry and company type: https://docs.google.com/spreadsheets/d/1IDzzpG0CnHkzPiqXUeSuOTehI2he8vaaNX2DTzEkNj4/edit?usp=sharing

And finally, here is a list of the most common cost and expense accounts with descriptions…

Cost of Goods Sold Accounts:

• Blueprints and Reproduction: Blueprints, photostats, and other printing expense
• Bond Expense: Construction bonds expenses directly related to jobs
• Construction Materials Costs: Construction materials costs
• Contracted Services: Direct labor costs for contract (non-employees) performing services for clients
• Equipment Rental for Jobs: Rent paid for rented equipment used on jobs
• Freight and Shipping Costs: Freight-in and shipping costs for delivery to customers
• Freight Costs: Costs of freight and delivery for merchandise purchased
• Job Materials Purchased: Construction materials used on jobs
• Linens and Lodging Supplies: Costs of linens and other supplies for guest rooms
• Materials Costs: Cost of materials used on jobs
• Media Purchased for Clients: Print, TV, radio, and other media purchased for clients
• Merchant Account Fees: Credit card merchant account discount fees, transaction fees, and related costs
• Other Construction Costs: Other costs directly related to jobs such as waste disposal, onsite storage rental, etc.
• Other Job Related Costs: Other costs directly related to jobs such as waste disposal, onsite storage rental, etc.
• Parts Purchases: Purchases of parts for use on customer repairs or resale
• Purchases – Hardware for Resale: Purchases of hardware items for resale that are not tracked or counted in inventory
• Purchases – Resale Items: Purchases of items for resale that are not tracked or counted in inventory
• Purchases – Software for Resale: Purchases of software items for resale that are not tracked or counted in inventory
• Subcontracted Services: Subcontracted services for customer service orders
• Subcontractors Expense: Subcontracted services performed by other contractors
• Tools and Small Equipment: Purchases of tools or small equipment used on jobs
• Worker’s Compensation Insurance: Worker’s compensation insurance premiums

Expense Accounts:

• Advertising and Promotion: Advertising, marketing, graphic design, and other promotional expenses
• Auto and Truck Expenses: Fuel, oil, repairs, and other maintenance for business autos and trucks
• Automobile Expense: Fuel, oil, repairs, and other automobile maintenance for business autos
• Bank Service Charges: Bank account service fees, bad check charges and other bank fees
• Business Licenses and Permits: Business licenses, permits, and other business-related fees
• Car and Truck Expenses: Fuel, oil, repairs, and other car and truck maintenance
• Chemicals Purchased: Costs of chemicals used in farming operations
• Computer and Internet Expenses: Computer supplies, off-the-shelf software, online fees, and other computer or internet related expenses
• Continuing Education: Seminars, educational expenses and employee development, not including travel
• Depreciation Expense: Depreciation on equipment, buildings and improvements
• Dues and Subscriptions: Subscriptions and membership dues for civic, service, professional, trade organizations
• Equipment Rental: Rent paid for rented equipment used for business
• Fertilizers and Lime: Fertilizers and lime purchased for farm operations.
• Freight and Trucking: Amounts paid for freight or trucking of farm products.
• Gasoline, Fuel and Oil: Gasoline, fuel or oil used for farm machinery
• Insurance Expense: Insurance expenses
• Insurance Expense: General Liability Insurance: General liability insurance premiums
• Insurance Expense: Life and Disability Insurance: Employee life and disability insurance premiums
• Insurance Expense: Professional Liability: Professional liability (errors and omissions) insurance
• Insurance Expense: Workers Compensation: Worker’s compensation insurance premiums
• Interest Expense: Interest payments on business loans, credit card balances, or other business debt
• Janitorial Expense: Janitorial expenses and cleaning supplies
• Landscaping and Groundskeeping: Landscape maintenance, gardening, and pool maintenance costs
• Marketing Expense: Advertising, marketing, graphic design, and other promotional expenses for our company
• Meals and Entertainment: Business meals and entertainment expenses, including travel-related meals (may have limited deductibility)
• Office Supplies: Office supplies expense
• Payroll Expenses: Payroll expenses
• Postage and Delivery: Postage, courier, and pickup and delivery services
• Printing and Reproduction: Printing, copies, and other reproduction expenses
• Professional Fees: Payments to attorneys and other professionals for services rendered
• Rent Expense: Rent paid for company offices or other structures used in the business
• Repairs and Maintenance: Incidental repairs and maintenance of business assets that do not add to the value or appreciably prolong its life
• Research Services: Research costs including legal library and subscriptions for research services
• Salon Supplies, Linens, Laundry: Costs of supplies used in the course of business (includes linens and laundry services)
• Seeds and Plants Purchased: Seeds and plants purchased for producing farm income.
• Shop Expense: Miscellaneous shop supplies and related shop expenses (rags, hand cleaning supplies, etc.)
• Small Tools and Equipment: Purchases of small tools or equipment not classified as fixed assets
• Storage and Warehousing: Amounts paid to store farm commodities.
• Taxes – Property: Taxes paid on property owned by the business, franchise taxes, excise taxes, etc.
• Telephone Expense: Telephone and long distance charges, faxing, and other fees Not equipment purchases
• Travel Expense: Business-related travel expenses including airline tickets, taxi fares, hotel and other travel expenses
• Uniforms: Uniforms for employees and contractors
• Utilities: Water, electricity, garbage, and other basic utilities expenses

• 17 Comments

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17 Responses

When do you use sub accounts?

when you need more detail

I congratulate Hector Garcia is a great professional as Accountant, his tutorials have been very helpful for me.

Thank you so much for sharing their teachings!!

you welcome.

any one can share packers and movers charts of accounts

Where would union dues paid by the employer go?

Dues and Subscriptions probably

how do we classify purchase of Trash Bin?

office supplies probably

What account would you recommend for the down payment on a new swimming pool?

1.under what expense does purchase of Technical Information fall? Example: buying Vehice Tech Info from Land Transport Authority or purchase of Company Profile from ACRA/Questnet

THANK YOU for your answer

continued education?

Thanks! Hector Garcia for your information as a student I’m very grateful that this works of yours does really help me.

What account would you recommend for paying consultants (for such things as strategic planning and sales training)? We do not have an account for Professional Development, but thought that would make sense.

that seems fine

What class of Account would sale of plant and machinery be?

Fixed Asset

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Travel Agency Charts of Accounts

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What the data says about abortion in the U.S.

Pew Research Center has conducted many surveys about abortion over the years, providing a lens into Americans’ views on whether the procedure should be legal, among a host of other questions.

In a  Center survey  conducted nearly a year after the Supreme Court’s June 2022 decision that  ended the constitutional right to abortion , 62% of U.S. adults said the practice should be legal in all or most cases, while 36% said it should be illegal in all or most cases. Another survey conducted a few months before the decision showed that relatively few Americans take an absolutist view on the issue .

Find answers to common questions about abortion in America, based on data from the Centers for Disease Control and Prevention (CDC) and the Guttmacher Institute, which have tracked these patterns for several decades:

How many abortions are there in the U.S. each year?

How has the number of abortions in the u.s. changed over time, what is the abortion rate among women in the u.s. how has it changed over time, what are the most common types of abortion, how many abortion providers are there in the u.s., and how has that number changed, what percentage of abortions are for women who live in a different state from the abortion provider, what are the demographics of women who have had abortions, when during pregnancy do most abortions occur, how often are there medical complications from abortion.

This compilation of data on abortion in the United States draws mainly from two sources: the Centers for Disease Control and Prevention (CDC) and the Guttmacher Institute, both of which have regularly compiled national abortion data for approximately half a century, and which collect their data in different ways.

The CDC data that is highlighted in this post comes from the agency’s “abortion surveillance” reports, which have been published annually since 1974 (and which have included data from 1969). Its figures from 1973 through 1996 include data from all 50 states, the District of Columbia and New York City – 52 “reporting areas” in all. Since 1997, the CDC’s totals have lacked data from some states (most notably California) for the years that those states did not report data to the agency. The four reporting areas that did not submit data to the CDC in 2021 – California, Maryland, New Hampshire and New Jersey – accounted for approximately 25% of all legal induced abortions in the U.S. in 2020, according to Guttmacher’s data. Most states, though,  do  have data in the reports, and the figures for the vast majority of them came from each state’s central health agency, while for some states, the figures came from hospitals and other medical facilities.

Discussion of CDC abortion data involving women’s state of residence, marital status, race, ethnicity, age, abortion history and the number of previous live births excludes the low share of abortions where that information was not supplied. Read the methodology for the CDC’s latest abortion surveillance report , which includes data from 2021, for more details. Previous reports can be found at  stacks.cdc.gov  by entering “abortion surveillance” into the search box.

For the numbers of deaths caused by induced abortions in 1963 and 1965, this analysis looks at reports by the then-U.S. Department of Health, Education and Welfare, a precursor to the Department of Health and Human Services. In computing those figures, we excluded abortions listed in the report under the categories “spontaneous or unspecified” or as “other.” (“Spontaneous abortion” is another way of referring to miscarriages.)

Guttmacher data in this post comes from national surveys of abortion providers that Guttmacher has conducted 19 times since 1973. Guttmacher compiles its figures after contacting every known provider of abortions – clinics, hospitals and physicians’ offices – in the country. It uses questionnaires and health department data, and it provides estimates for abortion providers that don’t respond to its inquiries. (In 2020, the last year for which it has released data on the number of abortions in the U.S., it used estimates for 12% of abortions.) For most of the 2000s, Guttmacher has conducted these national surveys every three years, each time getting abortion data for the prior two years. For each interim year, Guttmacher has calculated estimates based on trends from its own figures and from other data.

The latest full summary of Guttmacher data came in the institute’s report titled “Abortion Incidence and Service Availability in the United States, 2020.” It includes figures for 2020 and 2019 and estimates for 2018. The report includes a methods section.

In addition, this post uses data from StatPearls, an online health care resource, on complications from abortion.

An exact answer is hard to come by. The CDC and the Guttmacher Institute have each tried to measure this for around half a century, but they use different methods and publish different figures.

The last year for which the CDC reported a yearly national total for abortions is 2021. It found there were 625,978 abortions in the District of Columbia and the 46 states with available data that year, up from 597,355 in those states and D.C. in 2020. The corresponding figure for 2019 was 607,720.

The last year for which Guttmacher reported a yearly national total was 2020. It said there were 930,160 abortions that year in all 50 states and the District of Columbia, compared with 916,460 in 2019.

• How the CDC gets its data: It compiles figures that are voluntarily reported by states’ central health agencies, including separate figures for New York City and the District of Columbia. Its latest totals do not include figures from California, Maryland, New Hampshire or New Jersey, which did not report data to the CDC. ( Read the methodology from the latest CDC report .)
• How Guttmacher gets its data: It compiles its figures after contacting every known abortion provider – clinics, hospitals and physicians’ offices – in the country. It uses questionnaires and health department data, then provides estimates for abortion providers that don’t respond. Guttmacher’s figures are higher than the CDC’s in part because they include data (and in some instances, estimates) from all 50 states. ( Read the institute’s latest full report and methodology .)

While the Guttmacher Institute supports abortion rights, its empirical data on abortions in the U.S. has been widely cited by  groups  and  publications  across the political spectrum, including by a  number of those  that  disagree with its positions .

These estimates from Guttmacher and the CDC are results of multiyear efforts to collect data on abortion across the U.S. Last year, Guttmacher also began publishing less precise estimates every few months , based on a much smaller sample of providers.

The figures reported by these organizations include only legal induced abortions conducted by clinics, hospitals or physicians’ offices, or those that make use of abortion pills dispensed from certified facilities such as clinics or physicians’ offices. They do not account for the use of abortion pills that were obtained  outside of clinical settings .

(Back to top)

The annual number of U.S. abortions rose for years after Roe v. Wade legalized the procedure in 1973, reaching its highest levels around the late 1980s and early 1990s, according to both the CDC and Guttmacher. Since then, abortions have generally decreased at what a CDC analysis called  “a slow yet steady pace.”

Guttmacher says the number of abortions occurring in the U.S. in 2020 was 40% lower than it was in 1991. According to the CDC, the number was 36% lower in 2021 than in 1991, looking just at the District of Columbia and the 46 states that reported both of those years.

(The corresponding line graph shows the long-term trend in the number of legal abortions reported by both organizations. To allow for consistent comparisons over time, the CDC figures in the chart have been adjusted to ensure that the same states are counted from one year to the next. Using that approach, the CDC figure for 2021 is 622,108 legal abortions.)

There have been occasional breaks in this long-term pattern of decline – during the middle of the first decade of the 2000s, and then again in the late 2010s. The CDC reported modest 1% and 2% increases in abortions in 2018 and 2019, and then, after a 2% decrease in 2020, a 5% increase in 2021. Guttmacher reported an 8% increase over the three-year period from 2017 to 2020.

As noted above, these figures do not include abortions that use pills obtained outside of clinical settings.

Guttmacher says that in 2020 there were 14.4 abortions in the U.S. per 1,000 women ages 15 to 44. Its data shows that the rate of abortions among women has generally been declining in the U.S. since 1981, when it reported there were 29.3 abortions per 1,000 women in that age range.

The CDC says that in 2021, there were 11.6 abortions in the U.S. per 1,000 women ages 15 to 44. (That figure excludes data from California, the District of Columbia, Maryland, New Hampshire and New Jersey.) Like Guttmacher’s data, the CDC’s figures also suggest a general decline in the abortion rate over time. In 1980, when the CDC reported on all 50 states and D.C., it said there were 25 abortions per 1,000 women ages 15 to 44.

That said, both Guttmacher and the CDC say there were slight increases in the rate of abortions during the late 2010s and early 2020s. Guttmacher says the abortion rate per 1,000 women ages 15 to 44 rose from 13.5 in 2017 to 14.4 in 2020. The CDC says it rose from 11.2 per 1,000 in 2017 to 11.4 in 2019, before falling back to 11.1 in 2020 and then rising again to 11.6 in 2021. (The CDC’s figures for those years exclude data from California, D.C., Maryland, New Hampshire and New Jersey.)

The CDC broadly divides abortions into two categories: surgical abortions and medication abortions, which involve pills. Since the Food and Drug Administration first approved abortion pills in 2000, their use has increased over time as a share of abortions nationally, according to both the CDC and Guttmacher.

The majority of abortions in the U.S. now involve pills, according to both the CDC and Guttmacher. The CDC says 56% of U.S. abortions in 2021 involved pills, up from 53% in 2020 and 44% in 2019. Its figures for 2021 include the District of Columbia and 44 states that provided this data; its figures for 2020 include D.C. and 44 states (though not all of the same states as in 2021), and its figures for 2019 include D.C. and 45 states.

Guttmacher, which measures this every three years, says 53% of U.S. abortions involved pills in 2020, up from 39% in 2017.

Two pills commonly used together for medication abortions are mifepristone, which, taken first, blocks hormones that support a pregnancy, and misoprostol, which then causes the uterus to empty. According to the FDA, medication abortions are safe  until 10 weeks into pregnancy.

Surgical abortions conducted  during the first trimester  of pregnancy typically use a suction process, while the relatively few surgical abortions that occur  during the second trimester  of a pregnancy typically use a process called dilation and evacuation, according to the UCLA School of Medicine.

In 2020, there were 1,603 facilities in the U.S. that provided abortions,  according to Guttmacher . This included 807 clinics, 530 hospitals and 266 physicians’ offices.

While clinics make up half of the facilities that provide abortions, they are the sites where the vast majority (96%) of abortions are administered, either through procedures or the distribution of pills, according to Guttmacher’s 2020 data. (This includes 54% of abortions that are administered at specialized abortion clinics and 43% at nonspecialized clinics.) Hospitals made up 33% of the facilities that provided abortions in 2020 but accounted for only 3% of abortions that year, while just 1% of abortions were conducted by physicians’ offices.

Looking just at clinics – that is, the total number of specialized abortion clinics and nonspecialized clinics in the U.S. – Guttmacher found the total virtually unchanged between 2017 (808 clinics) and 2020 (807 clinics). However, there were regional differences. In the Midwest, the number of clinics that provide abortions increased by 11% during those years, and in the West by 6%. The number of clinics  decreased  during those years by 9% in the Northeast and 3% in the South.

The total number of abortion providers has declined dramatically since the 1980s. In 1982, according to Guttmacher, there were 2,908 facilities providing abortions in the U.S., including 789 clinics, 1,405 hospitals and 714 physicians’ offices.

The CDC does not track the number of abortion providers.

In the District of Columbia and the 46 states that provided abortion and residency information to the CDC in 2021, 10.9% of all abortions were performed on women known to live outside the state where the abortion occurred – slightly higher than the percentage in 2020 (9.7%). That year, D.C. and 46 states (though not the same ones as in 2021) reported abortion and residency data. (The total number of abortions used in these calculations included figures for women with both known and unknown residential status.)

The share of reported abortions performed on women outside their state of residence was much higher before the 1973 Roe decision that stopped states from banning abortion. In 1972, 41% of all abortions in D.C. and the 20 states that provided this information to the CDC that year were performed on women outside their state of residence. In 1973, the corresponding figure was 21% in the District of Columbia and the 41 states that provided this information, and in 1974 it was 11% in D.C. and the 43 states that provided data.

In the District of Columbia and the 46 states that reported age data to  the CDC in 2021, the majority of women who had abortions (57%) were in their 20s, while about three-in-ten (31%) were in their 30s. Teens ages 13 to 19 accounted for 8% of those who had abortions, while women ages 40 to 44 accounted for about 4%.

The vast majority of women who had abortions in 2021 were unmarried (87%), while married women accounted for 13%, according to  the CDC , which had data on this from 37 states.

In the District of Columbia, New York City (but not the rest of New York) and the 31 states that reported racial and ethnic data on abortion to  the CDC , 42% of all women who had abortions in 2021 were non-Hispanic Black, while 30% were non-Hispanic White, 22% were Hispanic and 6% were of other races.

Looking at abortion rates among those ages 15 to 44, there were 28.6 abortions per 1,000 non-Hispanic Black women in 2021; 12.3 abortions per 1,000 Hispanic women; 6.4 abortions per 1,000 non-Hispanic White women; and 9.2 abortions per 1,000 women of other races, the  CDC reported  from those same 31 states, D.C. and New York City.

For 57% of U.S. women who had induced abortions in 2021, it was the first time they had ever had one,  according to the CDC.  For nearly a quarter (24%), it was their second abortion. For 11% of women who had an abortion that year, it was their third, and for 8% it was their fourth or more. These CDC figures include data from 41 states and New York City, but not the rest of New York.

Nearly four-in-ten women who had abortions in 2021 (39%) had no previous live births at the time they had an abortion,  according to the CDC . Almost a quarter (24%) of women who had abortions in 2021 had one previous live birth, 20% had two previous live births, 10% had three, and 7% had four or more previous live births. These CDC figures include data from 41 states and New York City, but not the rest of New York.

The vast majority of abortions occur during the first trimester of a pregnancy. In 2021, 93% of abortions occurred during the first trimester – that is, at or before 13 weeks of gestation,  according to the CDC . An additional 6% occurred between 14 and 20 weeks of pregnancy, and about 1% were performed at 21 weeks or more of gestation. These CDC figures include data from 40 states and New York City, but not the rest of New York.

About 2% of all abortions in the U.S. involve some type of complication for the woman , according to an article in StatPearls, an online health care resource. “Most complications are considered minor such as pain, bleeding, infection and post-anesthesia complications,” according to the article.

The CDC calculates  case-fatality rates for women from induced abortions – that is, how many women die from abortion-related complications, for every 100,000 legal abortions that occur in the U.S .  The rate was lowest during the most recent period examined by the agency (2013 to 2020), when there were 0.45 deaths to women per 100,000 legal induced abortions. The case-fatality rate reported by the CDC was highest during the first period examined by the agency (1973 to 1977), when it was 2.09 deaths to women per 100,000 legal induced abortions. During the five-year periods in between, the figure ranged from 0.52 (from 1993 to 1997) to 0.78 (from 1978 to 1982).

The CDC calculates death rates by five-year and seven-year periods because of year-to-year fluctuation in the numbers and due to the relatively low number of women who die from legal induced abortions.

In 2020, the last year for which the CDC has information , six women in the U.S. died due to complications from induced abortions. Four women died in this way in 2019, two in 2018, and three in 2017. (These deaths all followed legal abortions.) Since 1990, the annual number of deaths among women due to legal induced abortion has ranged from two to 12.

The annual number of reported deaths from induced abortions (legal and illegal) tended to be higher in the 1980s, when it ranged from nine to 16, and from 1972 to 1979, when it ranged from 13 to 63. One driver of the decline was the drop in deaths from illegal abortions. There were 39 deaths from illegal abortions in 1972, the last full year before Roe v. Wade. The total fell to 19 in 1973 and to single digits or zero every year after that. (The number of deaths from legal abortions has also declined since then, though with some slight variation over time.)

The number of deaths from induced abortions was considerably higher in the 1960s than afterward. For instance, there were 119 deaths from induced abortions in  1963  and 99 in  1965 , according to reports by the then-U.S. Department of Health, Education and Welfare, a precursor to the Department of Health and Human Services. The CDC is a division of Health and Human Services.

Note: This is an update of a post originally published May 27, 2022, and first updated June 24, 2022.

Support for legal abortion is widespread in many countries, especially in Europe

Nearly a year after roe’s demise, americans’ views of abortion access increasingly vary by where they live, by more than two-to-one, americans say medication abortion should be legal in their state, most latinos say democrats care about them and work hard for their vote, far fewer say so of gop, positive views of supreme court decline sharply following abortion ruling, most popular.

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How to use the Moscow Metro (PHOTOS+INFOGRAPHICS)

It’s really convenient to use the Moscow Metro and city trains. They operate from 5:30 in the morning to 1:00 at night and you can pay for them with the same ‘Troika’ ticket card. Indeed, the map of the subway looks complex. But that’s only at first glance.

For starters, let’s separate the underground metro from surface city trains. The underground map is marked by bright solid lines, while the lines of surface routes are marked by two parallel lines with a white gap in between.

Underground metro system

It has two ring lines – the brown Koltsevaya, or Circle line (5) and the new Bolshaya Koltsevaya line (Big Circle Line) colored turquoise (number 11). These rings cross all other underground metro lines, so if you need to reach another line from the outskirts – it’s convenient to use one of the ring lines.

Circle Line

We can consider that the center of the city is inside of the ring line (5). Also there’s a multitude of transfers from one line to another within the brown ring. The record holder is Biblioteka Imeni Lenina – Arbatskaya – Alexandrovsky Sad – Borovitskaya. These whole four lines crossed in one place (right next to the Moscow Kremlin). Also, you can reach the Kremlin quickly and conveniently from stations Okhotny Ryad – Teatralnaya – Ploshchad Revolyutsii, which also have transfers between each other.

Big Circle Line

You can also reach the Vnukovo Airport right by metro! The corresponding station of the Solntsevskaya Line (8A) was opened in September 2023.

How does the underground metro operate?

Pykhtino metro station, opened in 2023

The intervals between trains are really small – on average about 2 minutes; during rush hour, they run even more often. So you don’t need to run and squeeze yourself into closing doors (that’s also dangerous). Just wait for the next train, it’ll arrive quickly. Unlike the subway systems of other cities – the trains run along single lines, without branching away. So you can just board the train in the required direction without worrying that you will go somewhere you didn’t intend to.

There are only two exceptions:

• From Alexandrovsky Sad Station of the light-blue line trains run either to Mezhdunarodnaya Station (where Moscow City is located, where a lot of businessmen go) or to Pionerskaya.
• Bolshaya Koltsevaya line also has the so-called fork branching: from Savelovskaya Station to the Business Center (also to Moscow City).

Sometimes you can hear an announcement ‘This train runs to the station…’ If you need to go further, you simply need to get off at the station the train is bound for, and wait for the next train. Perhaps, this train just needs to go to the depot.

Surface routes:

Apart from the underground metro itself, the new map marks suburban trains. You can tell them apart immediately – these lines are indicated with two parallel lines with a white gap in between.

1) MCC: Moscow Central Circle (14)

Moscow Central Circle (MCC)

Let’s take a look at the map again and find a red circle, situated between the underground Koltsevaya (5) and Bolshaya Koltsevaya (11) lines. This is the Moscow Central Circle (14) or simply MCC.

This is a surface urban train that circles around the city. There are stations from where you can transfer to the underground metro. However, these transfers usually are not as short as between subway stations. Sometimes you’ll need about 10 minutes of walking to transfer.

So we don’t recommend you to use MCC purely as a transfer route. In addition, the interval between trains on MCC is longer than in the metro, and can reach 4-8 minutes, depending on the time of day.

However, a big advantage of the MCC is that it has a lot of stations that are far removed from the metro, and which are most conveniently reached specifically by the MCC.

2) Moscow Central Diameters (MCD)

Moscow Central Diameters (MCD)

Moscow diameters on the metro map are the longest lines that cross the entire city (hence, they are called diameters). They are reminiscent of urban trains, like S-Bahn in Berlin or Vienna or RER in Paris.

Those are suburban train lines that run from suburbs (from the Moscow Region, marked as a green shadow on the map) and, crossing the entire city, are bound for suburbs on the other side of the city. At some of the stations of a diameter you can get off and transfer to the metro or the MCC. During rush hour, MCD trains run with an interval of 5-7 minutes.

D1 – Belorussko-Savyolovsky Yellow Diameter runs from Odintsovo Station south-west from Moscow through Moscow City and Belorussky railway station to Sheremetyevo Airport and to Lobnya Station in the north.

D2 – Kursko-Rizhsky Pink Diameter runs from the Moscow Region city of Podolsk in the south through Kursky railway station, Three Station Square (Leningradsky, Kazansky, Yaroslavsky), and Rizhsky railway station to the village of Nakhabino in the north-west.

D3 – Leningradsko-Kazansky Orange Diameter runs from Ippodrom Station in the south-east (the city of Ramenskoye) to Zelenograd in the north.

D4 – Kaluzhsko-Nizhegorodsky Green Diameter runs from the city of Aprelevka in the south-west through Moscow City, Belorussky, Savelovsky, and Kursky railway stations, as well as through Three Station Square (Leningradsky, Kazansky, Yaroslavsky) to Zheleznodorozhnaya Station in the city of Balashikha in the east.

A fifth MCD line is also projected, which is promised to be finished by 2028. It will connect the south (Domodedovo) and the north (Pushkino).

3) Moscow Monorail

Moscow Monorail (highlighted above) and Light metro (bottom)

Look for the only monorail line in Russia to the north from the center of Moscow. It’s not just a surface line, it’s an elevated line that stands on piles. It’s a short line (13) that operates in an excursion mode – from it, you can get a beautiful view of the Ostankino TV Tower, for example.

Once per half an hour, the train runs from Timiryazevskaya Station (which is near the station of the same name on the Serpukhovsko-Timiryazevskaya (9) line, which is the gray metro line) to Ulitsa Sergeya Eisensteina Station, which is located next to the entrance to the VDNKh park and to the VDNKh metro station of the Kaluzhsko-Rizhskaya (6) metro line.

4) Light metro

Butovskaya (12) line in the south of Moscow runs from Buninskaya Alleya Station to Bitsevsky Park Station; from it, you can make a transfer to the gray Serpukhovsko-Timiryazevskaya (9) line and the orange Kaluzhsko-Rizhskaya (6) line. This line runs mostly on the surface, entering a tunnel, but is considered a part of the subway (hence, this line is marked with a solid line as other metro lines).

A useful piece of advice

The Moscow Metro website has an interactive map with all metro lines, MCC, and diameters. With it, you can build a route from the departure station to the destination station, take a look at all travel options and where you can make necessary transfers.

How to pay the fare

The convenience of the Moscow transportation system is that you only need the Troika card for travel with any type of public transport, be it the metro, suburban trains, or buses/trams. You can purchase it in ticket offices or from machines at stations. Also in souvenir shops and in the metro internet store you can purchase keychains, bracelets, and rings that work like a Troika card, as well as Troika cards with a unique and custom design.

Troika design dedicated to the 875th anniversary of Moscow

You can top up your card by simply adding a particular amount of money – or purchase the Unified ticket for 60 travels or unified unlimited ticket for 1/3/30/90/365 days.

The deposit price of the Troika card is 80 rubles, and you can get it back when returning the card to the ticket office. The validity period of the card is 5 years, so you can save it for future travels.

One MCC, MCD (in the city center), and metro trip costs 54 rubles. Transfers in the metro, MCC, or between diameters are free within 90 minutes. The fare on MCD in the suburbs costs 71 rubles.

Important: you need to pay the fare in the metro and MCC only upon entrance. On diameters, you need to activate trips upon entrance and then tap your card again at the turnstile upon exiting.

Also almost every station has a terminal where you can pay your fare, tapping your bank card.

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