Accounting for Travel Agency Owners with Jeri Ann Cook – Episode 25

Estimated Reading Time: 6 minutes

You didn’t become a travel advisor because you were excited about spreadsheets and balance sheets.

You got into this business because you love helping people create amazing memories and experiences.

But if you want to turn your passion into a profitable business that actually pays you what you’re worth, you’ve got to get serious about your numbers.

Accounting for travel agency operations isn’t just about keeping the IRS happy (though that’s important too).

It’s about understanding the financial health of your business so you can make strategic decisions, pay yourself more, and grow sustainably. 

I had been using software in the beginning of my journey, and then I stopped.

So every time it came around to tax time, I was scrambling, thinking “Gah! I have to figure everything out again.”

Sound familiar?

If you’re nodding your head right now, this article is for you.

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Why Accounting for Travel Agency Operations Feels So Overwhelming (And How to Fix It)

After over ten years in this industry, I know that most of us treat bookkeeping like that pile of laundry we keep meaning to fold.

We know we need to do it, but somehow it always gets pushed to tomorrow.

My recent chat with Jeri Ann Cook, owner of Sunstone Bookkeeping, helped me see how we can change this attitude.

As she put it: “I would say the minute the bookkeeping feels overwhelming and you just can’t keep up with it” is when you need help. “When should you start bookkeeping? That would be the minute you start your business.”

In the beginning, it’s actually not that hard.

You’re starting out, there aren’t as many vendors, not as many customers; you’re crawling before you walk.

But it absolutely needs to be a focus from day one.

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Separate Your Business from Personal Finances

Are you still running everything in your travel business through your personal checking account?

Unfortunately, you’re not alone, but it’s time to make a change.

You absolutely need to open your own business account, and Jeri Ann gave me three compelling reasons why:

First, it makes you official.

You need an EIN (employer identification number) to open a business account, which creates a record that yes, this is an actual company.

Second, it follows what’s called the economic entity principle.

Basically, your business’s finances must be kept separate from everything else.

Your personal finances, your partner’s finances, other business finances. It keeps everything clean and eliminates confusion.

And here’s the third reason:  “It makes you feel like a grown up entrepreneur.”

I know that might sound silly, but there’s something powerful about having your own business account.

It gives you that mental boost that you’re not pretending anymore.

This is a real business, and you start taking yourself more seriously.

It’s easier than you think.

You can get a business account with no fees and a relatively low minimum balance.

Don’t let this step intimidate you.

What You Actually Need to Track 

Alright, so you’ve got your business account set up.

Now what do you actually need to track?

I asked Jeri Ann this exact question, hoping for a simple answer.

Her response? “Everything.”

I know, I know – not what you wanted to hear.

But this is actually simpler than it sounds.

For basic tracking, whether you’re using accounting software for travel agency operations or just starting with a simple spreadsheet, you need these four columns:

• Where you spent money (vendor/company)
• What you spent money for (description)
• The amount
• What account it came out of (checking, PayPal, credit card)

“You have to pretend in your mind at tax time that there is an IRS agent sitting outside your door, sipping on a Starbucks, playing candy crush on his phone, waiting for the text message from his supervisor saying, alright… Time to audit.”

Sounds paranoid?

Maybe.

But this pre-planning will save you headaches later.

Making Documentation Actually Doable

As Jeri Ann said, “As a girl, I know this for a fact. I carry a bag. I get a receipt. I stuff it at the bottom. I forget about it.”

Been there, done that, right?

Let’s change that!

Take a picture of every receipt with your phone.

Right there, right then.

Most accounting software now lets you snap a photo and attach it directly to the transaction.

Or if you want to go old school, just save the pictures to Dropbox or another cloud service.

The important thing to remember is that thermal paper fades fast, so you need to process receipts quickly.

And for those Amazon purchases or Walmart runs that show up as random amounts on your statement?

Without the receipt, your bookkeeper or tax preparer has no idea what that was for, and they won’t guess.

Understanding Your Business Health Beyond Tax Season

You need more than just income and expense tracking.

You need to understand your complete financial picture, and that includes something called a balance sheet.

“The balance sheet actually shows the health of your business in a snapshot. It shows everything the business owns, everything the business owes, and everything the owner can claim as his or hers.”

This might sound complicated, but it’s crucial if you ever want to:

• Apply for a business loan
• Buy property for your agency
• Understand your true financial position
• Make strategic decisions about growth

Your balance sheet shows how much cash you have, what you owe on credit cards or loans, and what assets you own.

Banks look at this when considering you for loans. It tells them how leveraged you are and whether you’re a good risk.

Planning for Growth: Why You Need Systems That Scale

“Just like newlywed couples go buy a starter home with two or three bedrooms because they plan on having a child, you should plan on having a bigger business.”

This means investing in an accounting system for travel agency operations that can grow with you.

Yes, you can start with spreadsheets, but as soon as you can, move to proper accounting software.

We’re not talking about breaking the bank here – most cloud-based systems max out at around $75 a month for every bell and whistle, and nobody needs that level to start.

The goal is to have systems in place that can handle growth before you need them.

Don’t wait until you’re overwhelmed to upgrade your processes.

Cash Flow Management

Here’s where accounting becomes truly strategic for travel agencies.

When you understand your numbers, you can spot patterns and make informed decisions.

“One of our clients came to us and said, look. I’d like to hire a receptionist… What can we do? I said, well, let’s take a look. How much are you planning on paying this person?… This is how much it’s gonna cost.”

The same principle applies to travel agencies.

When you know your numbers, you can:

• Identify slow periods and plan marketing campaigns accordingly
• Understand when to invest in new tools or services
• Plan for recurring expenses like insurance, software subscriptions, or conference travel
• Make decisions about hiring help or expanding services

The Owner’s Draw vs. Business Expense Reality

This is something that trips up a lot of travel agents, especially those operating as LLCs.

Not every dollar that comes out of your business account is a business expense.

Some of it might be:

• Owner’s draw (your profit from the business)
• Sales tax you collected for the state
• Money you initially invested in the business
• Actual business expenses

Understanding the difference is important for accurate bookkeeping and tax preparation.

And if you’re not sure what a transaction was for?

Don’t guess.

Classify it as an owner’s draw rather than claiming it as a business expense you can’t support.

Making the Investment in Professional Help

“You went into business to write yourself the biggest paycheck possible.”

When the bookkeeping becomes overwhelming – and it will – that’s when you need to hire it out.

Whether that’s a bookkeeper, an accounting service, or someone who specializes in travel agency accounting, it’s an investment in your business growth.

The key is understanding enough about your finances to make good decisions and communicate effectively with your financial team.

You don’t need to know every tax law, but you should understand the basics of your business’s financial health.

Your Numbers Are Your Business Analytics

Think about how much attention you pay to your Facebook Ad or Google Analytics.

“Think of your bookkeeping the same way. This is an analytic that is key to your business success…knowing your numbers.”

You don’t need to obsess over them, but understanding your financial patterns helps you make strategic decisions about:

• How to plan for seasonal fluctuations
• When to increase marketing spend
• Whether you can afford to hire help
• How much to invest in new technology
• When to raise your fees

Here’s what I want you to take away from this. 

Good financial management isn’t just about keeping records for tax time.

You need to understand your business well enough to make strategic financial decisions that help you grow and, ultimately, pay yourself what you’re worth.

Whether you’re just starting out or you’ve been in business for years but struggling with your books, the time to get this right is now.

Start with the basics like a separate business account, track everything, keep receipts, and build systems that can grow with your business.

Your future self (and your bank account) will thank you for taking control of your finances today.

After all, you didn’t start this business to scrape by.

You started it to create the life and income you want.

And that starts with knowing your numbers.

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