Replacement reserves are a calculated line item that appears as an expense on the Operating Statement (For Operators) report. They represent the estimated cost of replacing furniture, fixtures, and equipment (FF&E) over time. This article covers how to configure Replacement Reserves for the Operators report. If you need to add them to the Operating Statement for Owners report instead, see the section at the bottom of this article.
Because replacement reserves are a calculated display line rather than an actual GL transaction, they do not post to any account in your chart of accounts. Inn-Flow calculates and inserts the value automatically on the report based on the method you choose below.
Configuring Replacement Reserves
Navigate to Administration → Entities and select your hotel. In the General section, find Replacement Reserves.
You can select one of the following two options for replacement reserves:
Percentage — Replacement reserves are calculated as a percentage of Total Operating Revenue. For example, if Total Operating Revenue is $500,000 and you set the percentage to 4%, the replacement reserve line will display $20,000.
Fixed Amount — Replacement reserves are a flat dollar amount per month regardless of revenue. For example, if you enter $5,000, that amount will appear on the Operating Statement each month.
Replacement reserves do not need to be budgeted separately. Inn-Flow applies the same calculation (percentage of revenue or fixed amount) to your budget values automatically, so the reserve line appears on both the actuals and budget columns of the Operating Statement.
Adding Replacement Reserves to the Owners Report
The configuration above applies only to the Operating Statement (For Operators) report. If you need to add replacement reserves to the Operating Statement for Owners report, please reference this article: Adding Replacement Reserves to Operating Statement for Owners. {insert link}