Last week I was asked to consult to a travel business that was in the process of implementing Tramada as their new front and mid office system. They installed the system late last year and were struggling to come to grips with how it worked and to obtain any meaningful information from the system.
Because the system had not been implemented correctly, the client had many hours of corrective work to do to put this right.
Of course when you implement a new system you expect some pain as everyone has to learn how to use it. It is my observation that this takes three to four months to get to terms with the new functionality and to learn how to use the system. This process is not helped by the lack of hands on training. Training now all seems to be via the internet.
With some helpful guidance and an enlightened implementation team, many of the problems can be avoided and it can be “business as usual” sooner rather than later.
Tramada is a trust accounting system. The underlying principles that determine how it operates are quite different to those of other travel and accounting systems, such as Serko, Travelog and Crosscheck, MYOB and Xero.
Trust accounting systems retain all clients’ money in separate bank accounts until “commission release” criteria are met. These are determined by the travel business prior to implementation and set in the system. Strict commission release criteria could be:
• Client’s money has been receipted.
• Suppliers have been paid.
• The trip file has a zero balance.
When these criteria are met the commission earned will be available for release to pay for your expenses. When you implement your system you can choose criteria that are suitable to the way in which your business operates.
Tramada recognises sales on a different basis to some other accounting systems. Sales are recognised when they are invoiced. This can be confusing because this is completely different to the “commission release” criteria.
Implementing the new system can be painless. To ensure this when you commence the new system, the “cut over” needs to be carefully planned so that the integrity of the new system is maintained from day one. The Tramada system has a high degree of financial integrity if it is operated correctly.
From an accounting perspective the reports that it produces will give you an excellent picture of:
• The financial position of the “trust” side of your business
• Staff productivity.
• What your travel business owes and is owed.
• Supplier productivity.
These desired outcomes all require the financial integrity of the system!!
We now have clients processing over $150 million of transactions through the Tramada system and running this system successfully.
They use a variety of back office systems including both Xero and MYOB Account Right – both in the cloud. This completes the financial picture as they combine the accounting from Tramada with the accounting for the non travel side of the business – what you are spending your money on and what your overall profitability is. Choosing a new management accounting system can be nerve racking as you may not be sure whether this is the right system for your business.
Implementing the system can be painful if you do not get the right advice.
Relying upon the new system can be impossible if you do not drive it correctly.
My advice is to get the help that you need early in the process; learn what is required to make your new system work for you.
Get it right first time or your business could be at risk.