What is an Expenses Report?
Expenses Report = Track Where Your Money Goes
A report showing all hotel expenses organized by category. Helps you understand costs, control spending, and identify areas where you can save money.
Why Track Expenses?
Many hotel owners focus only on revenue (money coming in) and forget about expenses (money going out). But here's the truth:
Profit = Revenue - Expenses
You can increase profits two ways: earn more OR spend less. Often, controlling expenses is easier and faster than increasing revenue.
You can increase profits two ways: earn more OR spend less. Often, controlling expenses is easier and faster than increasing revenue.
- Know where money goes: ₹10,000 here, ₹5,000 there - it adds up fast
- Find waste: Are you paying for services you don't use?
- Negotiate better: Know your spending to negotiate with vendors
- Budget planning: Plan next month/year based on actual data
- Tax benefits: Proper expense records = legitimate deductions
Categories of Hotel Expenses
Payroll & Staff 25-35% of revenue
- Salaries and wages
- Provident Fund (PF) contribution
- ESI (Employee State Insurance)
- Bonus and incentives
- Staff meals
- Uniforms
- Training expenses
Utilities 8-12% of revenue
- Electricity (biggest expense here)
- Water and sewage
- Gas (for kitchen, if applicable)
- Internet and WiFi
- Cable TV
- Telephone lines
Food & Beverage Cost 25-35% of F&B revenue
- Food ingredients
- Beverages (soft drinks, tea, coffee)
- Liquor (if bar)
- Kitchen consumables
- Wastage and spillage
Guest Supplies 3-5% of room revenue
- Toiletries (soap, shampoo, etc.)
- Bathroom supplies
- Stationery (pen, notepad)
- Welcome amenities
- Minibar items
Housekeeping 4-6% of revenue
- Cleaning supplies and chemicals
- Linens (sheets, towels, pillows)
- Laundry (if outsourced)
- Laundry chemicals (if in-house)
- Housekeeping equipment
Maintenance & Repairs 3-5% of revenue
- AC maintenance and repairs
- Plumbing repairs
- Electrical repairs
- Furniture repairs
- Building maintenance
- AMC contracts
Marketing & Sales 3-5% of revenue
- OTA commissions (15-25% of OTA bookings)
- Website hosting and maintenance
- Online advertising
- Printed materials
- Photography
Administrative 5-8% of revenue
- Software subscriptions (PMS, accounting)
- Insurance
- Professional fees (CA, legal)
- Bank charges
- Office supplies
- License renewals
Fixed Costs
- Rent or lease payments
- Property tax
- Loan EMI (principal + interest)
- Depreciation
Sample Monthly Expenses Report
Expenses Report - January 2026 (20 Room Hotel)
| PAYROLL & STAFF | |
| Salaries | ₹2,20,000 |
| PF & ESI | ₹30,000 |
| Staff meals | ₹15,000 |
| Subtotal | ₹2,65,000 |
| UTILITIES | |
| Electricity | ₹75,000 |
| Water | ₹8,000 |
| Internet & Cable | ₹5,000 |
| Subtotal | ₹88,000 |
| F&B COST | |
| Food purchases | ₹35,000 |
| Beverages | ₹8,000 |
| Subtotal | ₹43,000 |
| OPERATIONS | |
| Guest supplies | ₹18,000 |
| Housekeeping supplies | ₹12,000 |
| Maintenance | ₹25,000 |
| OTA Commissions | ₹1,10,000 |
| Subtotal | ₹1,65,000 |
| ADMIN & FIXED | |
| Rent | ₹1,00,000 |
| Software (PMS, etc.) | ₹5,000 |
| Insurance | ₹8,000 |
| Others | ₹15,000 |
| Subtotal | ₹1,28,000 |
| TOTAL EXPENSES | ₹6,89,000 |
Expense Tracking Best Practices
1. Record Everything
Every expense, no matter how small. ₹500 for taxi, ₹200 for courier - record it. Small expenses add up to big amounts.
2. Categorize Properly
Use consistent categories. Don't mix guest supplies with housekeeping supplies. Proper categorization helps analysis.
3. Keep Receipts/Bills
Physical or digital - keep all receipts. Needed for:
- GST Input Tax Credit
- Income Tax deductions
- Audit purposes
- Dispute resolution with vendors
4. Compare Month-on-Month
Is electricity higher this month? Why? Did you have higher occupancy or is something wrong with AC?
5. Set Budgets
Set monthly budget for each category. Track actual vs budget. Investigate variances.
Pro Tip: Use accounting software (Tally, Zoho Books) or even a simple Excel sheet. The key is consistency - record expenses daily, not at month end.
Ways to Reduce Expenses
| Category | Cost Reduction Ideas |
|---|---|
| Electricity | LED lights, efficient AC, solar panels, occupancy sensors |
| F&B Cost | Menu engineering, portion control, reduce wastage, local sourcing |
| OTA Commissions | Drive direct bookings, negotiate commission rates |
| Guest Supplies | Bulk purchasing, local vendors, dispensers vs individual bottles |
| Maintenance | Preventive maintenance, AMC contracts, staff training |
| Payroll | Cross-training staff, optimize scheduling based on occupancy |
Warning: Don't cut expenses that affect guest experience. Cheap toiletries or poor quality food will cost you more in bad reviews than you save. Cut smart, not blindly.
Expense Approval Process
For better control, implement approval limits:
- Up to ₹1,000: Department head can approve
- ₹1,000 - ₹10,000: Manager approval needed
- Above ₹10,000: Owner/GM approval required
- Above ₹50,000: Multiple quotes required