Hotels

This Overheads code records the cost of hotels incurred in running the business. As an expense account, it normally carries a debit balance: debit entries increase the balance (recording new costs) and credit entries decrease it (for example, correcting an error or a refund received).

Real-world examples

National or international consultancy

A consultancy with a national or international client base books hotel stays regularly — sometimes several nights a month — as staff travel to client sites. A £480 hotel invoice (£400 net) is a debit of £400 to 7402 (Hotels), a debit of £80 to 2201 (Purchase Tax Control Account), and a credit of £480 to 2100 (Creditors Control Account), fully recoverable in the normal way since it's ordinary business travel.

Local trade business

A local trade business rarely needs a hotel at all — this code might only see an entry once or twice a year, for example an overnight stay at an industry trade show or a training course held away from home. The VAT treatment itself doesn't change with the type of business; the only real difference between industries here is how often the code gets used.

Commonly confused with

Because code 7401 (Vehicle Hire) sits right next to this one in Overheads, it's a common mis-posting target. Code 7402 is specifically for hotels, while 7401 covers vehicle hire — similar in nature, but keeping them separate is what makes the overheads section of your management accounts meaningful rather than a single lumped total.

What a mis-posting here costs you

An error posting to Hotels won't change total overhead spend, but it will distort the overheads breakdown that's usually reviewed line by line each month to spot cost creep.

Other codes in Overheads