Guide · Accounting
OTA commissions in the books: gross, net, and the city ledger
Record OTA bookings at the gross rate the guest agreed, book the commission as a distribution expense, and hold the amount the OTA owes you on a city ledger account until its statement is paid. Netting commission out of revenue hides both the cost and the tax base.
Why gross and not net?
TGST and service charge are due on what the guest paid, not on what reached your bank. Booking at gross keeps the tax base right and shows commission as a real cost you can compare across channels.
What does the flow look like in NeoSuite?
- Reservation arrives with channel Booking.com and the gross rate.
- At checkout the folio is settled to the Booking.com city ledger account: a receivable is created.
- When Booking.com's statement is paid, one receipt clears the invoices; commission is posted as an expense against the receivable, and the bank line matches.
- The ageing report shows what each OTA and agent still owes.
What about virtual credit cards?
Where the OTA pays by virtual card at check-in, settle the folio by card as normal and treat the commission invoice from the OTA as a bill.
Questions on this topic
Is OTA commission subject to TGST?
Commission charged by a foreign OTA is a cost; TGST on the guest's stay is unaffected by it. Check your own advisor's view on withholding on foreign services.
Can I see revenue by channel?
Yes. Channel is recorded on every reservation, so revenue and commission can be reported by channel and month.