Hotel construction and renovation projects are a big deal, and because so much is going on, they often come with drama. However, by taking a few key steps throughout the process, hotel owners and developers can mitigate or even avoid unnecessary drama altogether. With a focus on finance and accounting, we’ll discuss how to make your hotel FF&E experience much more pleasant.
So what, exactly, does it take to have a drama-free hotel FF&E project from a finance and accounting standpoint?
There are three things that help avoid drama from the start:
- Understanding Agreements
Knowing what’s in your Purchase Agreement is the number one key to a successful and drama-free hotel construction or renovation. The most successful projects are ones where expectations are clear from the beginning between you, as the client, and your FF&E team, and you are fully cognizant of credit terms, invoicing, and payment expectations. Your procurement provider should encourage and confirm your understanding of all terms, and work with you to answer any questions you may have. With up-front knowledge and awareness, you can prevent surprises and negative consequences down the road.
As an example, if you skim over your Purchase Agreement and rush to sign it, you miss the opportunity to review the terms and make sure they align with what you want. A good FF&E provider will have a detailed Purchase Agreement but, ultimately, it is your responsibility to read it, ask questions, and understand your commitment. By doing this at the start and investing a little time in the early going, you avoid potential hiccups, delays, and heartburn later, when it comes time to make payments and reconcile your project’s accounting.
Here are our top tips for understanding agreements:
- Take your time reading the agreement
- Avoid reviewing the agreement at the last minute
- Ask questions about things you don’t understand or want to be revised
- Don’t be afraid to request clarification if needed
- Make sure you agree before you sign
We’ve all heard it before: communication is key. This is especially true when it comes to keeping your hotel construction or renovation on track. Hotel owners and developers must convey their questions, concerns, and preferences as early as possible to their FF&E team. These may involve payments, potential order changes, or anything your Credit Analyst might handle, such as your credit application.
No one likes receiving a collection call on a past-due account. To avoid this unwanted occurrence, review your invoices when you receive them and if you believe something is wrong or you anticipate any delay in your payment, contact your procurement provider immediately—don’t wait for the call and think the problem will go away. For additional support, your FF&E provider’s Credit Analyst and/or procurement consultant is there to assist you. Work with them to get the support you need throughout the process.
A high-quality procurement provider is happy to create solutions for you in order to minimize drama and confusion. They are there to help and truly care about your experience.
Here are our top tips on communication:
- Communicate questions, concerns, and changes ASAP
- Talk openly with your Credit Analyst
- Don’t wait if you think something is incorrectly invoiced
- Leverage the support you have
It is important to have a procurement provider who is experienced in complex new constructions and renovations. Your FF&E firm should be flexible and accommodating while knowing how to manage the inevitable challenges that come with a hotel project. For example, site delays, order changes/add-ons, and damages are all common occurrences that happen unexpectedly as a project progresses. For this reason, it’s always a good idea to set aside an allowance for the additional costs that tend to arise.
Your procurement provider should be understanding and quick to resolve issues, but you, too, must be flexible to the things that are, ultimately, out of anyone’s control. With positivity, collaboration, and teamwork, you and your FF&E team can tackle the challenges you face without drama.
Also important to note is that the credit review process, often involving communication with funding sources and other financial references, can take ten days to complete. It can take another couple of weeks to set up-front deposit and payment terms. Engage in the credit process early, and be proactive by using this time wisely to review the Purchase Agreement so your project can get started as soon as you’re approved.
Here are our tips for flexibility:
- Expect your provider to handle challenges with creative solutions
- Understand that the unexpected will likely happen
- Set aside an allowance
- Be positive and understand that you’re working as a team
- Remember that the credit process takes time
- Save time by being proactive
At Innvison, our goal is for you to have a wonderful hotel—and a wonderful experience. Our Credit and Accounting Department is responsive, cooperative, and always ready to answer any questions you may have. Understanding and communication are important to us across all departments, as we know that keeping your project drama-free depends on it.
Your procurement provider should be a trusted partner who makes your life easier. At Innvision, we take the drama out of the hotel FF&E process so your project flows smoothly. If you’re ready to see how Innvision can make your hotel renovation or new construction drama-free, contact us today! We’d be happy to help.