Performance Reporting Initiative
More importantly, it is a key resource management tool that guides sales and marketing decisions as well as staff development.
Standard DMO Performance Reporting
DMAI’s newly updated Standard DMO Performance Reporting: A Handbook for DMOs, provides DMOs with recognized benchmarks for evaluating and communicating their organization’s performance.
Operational definitions as well as activity, performance and productivity measures covered key DMO functional areas: convention sales, travel trade sales, marketing and communications, visitor services (including visitor information centers) and membership. ROI formulas at the functional and DMO levels were also introduced.
Since the release of the Handbook, online marketing and social media have become an integral part of a DMO’s destination promotion efforts. In response, DMAI’s DMO Performance Reporting Task Force was created in the summer of 2010 with the mandate to review and update DMAI’s recommended DMO performance reporting practices, while adding definitions, guidelines and measures for the digital marketing function.
The updated Handbook (see link below) incorporates the results of a survey that determined current practices for measuring digital marketing, significant public comment from DMOs and standards developed for the global marketing community.
DMO Uniform System of Accounts
As a precursor to the original DMO Performance Reporting initiative in 2003, a subcommittee of DMAI’s Performance Management Team developed and issued recommended standard financial reporting practices for DMOs. Establishing consistent reporting processes allowed DMOs to identify operational strengths and weaknesses as well as to improve organizational efficiency and effectiveness. The DMO Uniform System of Accounts (USOA) was subsequently incorporated into various productivity ratios and ROI formulas in DMAI’s Standard DMO Performance Reporting: A Handbook for DMOs.
A recent update to the Standard DMO Performance Reporting: A Handbook for DMOs dictated revisions be made to the USOA, and a task force was formed to review and revise the standard financial reporting processes for DMOs. The recommended changes were reviewed and adopted by DMAI’s Board of Directors in April 2012.
Internal Financial Statement Formats
The internal financial statements are the basis for the DMO's chart of accounts. Although internal financial statements can be designed to meet the needs of a particular DMO, the statements should utilize industry terminology and standards, where possible, in order to accurately portray financial operations for comparative reporting purposes. Additionally, the internal statement format should be similar (and easily converted) to audited financial statements.
Chart of Accounts
The Chart of Accounts should be constructed to allow a trained accountant an immediate understanding of the logic of the account numbering system. It should include a brief description of the use of each account. Generally, a chart of account number is composed of a series of digits that identify the account’s purpose.
Number = Class - Natural Account - Department - Project
Class - Represents type of account where:
1 = Assets
2 = Liabilities
3 = Net Assets
4 = Revenue
5 = Expense
Natural Account -- Represents actual account number. Examples include:
Checking = 1000
Accounts Receivable = 1100
Accounts Payable = 2000
Deferred Revenue = 2020
Unrestricted Net Assets = 3000
Room Tax = 4000
Membership Dues = 4030
Personnel Cost = 5000
Rent = 5320
Department – Represents function/department. Examples include:
Convention Sales & Marketing = 10
Travel Trade Sales & Marketing = 20
Administration = 80
Cost Allocation Procedures
Natural versus Functional Reporting: The recommended DMO chart of accounts enables financial reporting to be easily performed on a natural or functional line-item basis depending on how accounts are sorted. Functional reporting allows DMOs to monitor both profit and cost centers.
It is recommended that the natural account for personnel costs be converted to a functional basis by allocating the appropriate percentage of time spent for each job title to a corresponding organizational/functional activity.
Direct versus Indirect Reporting: The primary purpose of a DMO is to promote the destination that it represents, generating visitors, visitor spending and economic impact. The primary markets and functions where a DMO fulfills this purpose include convention and/or tourism sales, leisure marketing and visitor-service related activities. These activities are considered direct costs while all other activities are classified as indirect costs.
Download the updated DMO Uniform System of Accounts.