Understanding the Risks of Reverting Reservation Status
For improved financial security and data integrity, we highly recommend a key workflow change when handling reservations that have been moved to an inactive state.
If a reservation is currently marked as Cancelled, No Show, or Checked Out, we strongly advise against manually changing its status back to an active state (Confirmation Pending, Confirmed, or In-House).
This guidance is crucial for maintaining a reliable and financially sound operational environment, aligning your processes with industry best practices.
Why We Recommend Creating a New Reservation
The ability to easily switch a reservation between active and inactive statuses creates numerous hidden risks that can lead to manual errors, financial losses, and confusion for both your staff and accounting teams. The recommended workflow is designed to eliminate these risks by creating a clean, irreversible financial record.
1. Protecting Against Payment & Refund Errors
The most critical risks relate directly to financial security:
- Payment Authorizations are Time-Sensitive: When a reservation is made, a temporary authorization (a "hold") is placed on the guest's credit card. When that reservation is Cancelled, the system is legally required to release this hold. Reinstating the reservation later does not automatically restore the original authorization.
- The Risk: If a Cancelled reservation is simply reverted to Confirmed, your system may show a card on file, but the funds are no longer guaranteed. This often leads to declined payments at check-in and significantly increases your risk of chargebacks if the guest disputes the final charge.
- Refund Management: If a reservation is Cancelled (especially when an immediate refund or cancellation fee is involved), reverting the status back to Confirmed creates an accounting paradox. The system has no reliable way to "claw back" the refund or ensure a new payment is successfully collected, creating a loophole for potential revenue leakage.
2. Ensuring Clean Accounting and Reporting
A reservation that frequently changes status between Cancelled and Confirmed generates inconsistent data, making accurate financial reconciliation extremely difficult. Establishing a new, clean transaction record ensures:
- Accurate Reporting: Trustworthy data for business analysis and revenue management.
- Simplified Audits: Clean, sequential records that streamline accounting reconciliation.
What Does This Mean for Your Team?
To guarantee financial accuracy and avoid the risks outlined above, please adopt the following workflow:
| Current Status | Action | New Workflow |
| Cancelled, No Show, or Checked Out | Customer wishes to book again | You must create a brand-new reservation for the guest. |
This ensures a new, valid payment authorization is obtained and a clean financial record is generated.
Important Note on Future Changes
We are currently reviewing this status reversion functionality due to its impact on financial accuracy and system stability. In a future release, we plan to remove the ability to manually revert inactive reservations back to an active status. Adopting the recommended workflow now will ensure a seamless transition for your team.
Comments
Before you take the reversion functionality away, you would need to ensure we are able to change the rate on cancelled or no show reservations to zero. Currently, if a reservation is in either status, we are not able to change the room rate to zero. These reservations are then populating our account balances reports. For further example, let's say we have guest who books via an OTA.
However, they cancel well within the free cancellation window. I want that off of our account balance report so I have to go in and revert the reservation to pending, change the room rate to zero, and re cancel the reservation. It was frustrating to get used to this, but before Cloudbeds goes changing things yet again, maybe check in with properties to see why so many revisions are happening?
I agree with the statement above from Yuval. Its better for accounting purposes and balances to have all reservations 0 out after cancellations, no shows, and or when they are checked out.
Hello, Yuval Freincle,
Thank you for clearly sharing your specific requirements for reservation management to be able to change the rate on cancelled or no-show reservations, to zero.
Your feedback, including the OTA example, has already been escalated to our Product Team. They will review all these details (including your experience shared) for product re-evaluation.
We appreciate your valuable feedback, while we continue to improve the platform.
One option for Cloudbeds to consider adjusting would be the system having a setting that you could turn on to automatically change rates to zero when a cancellation is made
I agree with Yuval, we also have the same problem.
That was my first thought when receiving this email!
are positive account balances counted as room revenue on the daily reports?
Hello, James Schuler,
We have already forwarded your inquiry to our Support Team for dedicated assistance. They will contact you as soon as possible with more information.
We are here to help!
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