Three kinds of money, one bank balance
Ontario Regulation 26/05 under the Travel Industry Act, 2002 requires a TICO registrant to hold money received from clients for travel services in trust until it is paid to the supplier or refunded. That deposit for a June cruise sitting in your account in February is a liability to the client, not sales and not working capital, however comfortable the balance looks.
So the chart of accounts starts from that legal fact. Client funds sit in a trust liability ledger keyed to each booking, operating cash is measured net of those funds, and supplier payments discharge the liability file by file. Our End-to-End Accounting engagement reconciles the trust position monthly: client money on hand against client money owed, with the difference explained or fixed before TICO or anyone else has to ask.
Commission is earned when the client departs, not when they book
A booking creates a future commission, not revenue. Most suppliers pay after the client travels; cruise lines often pay after final payment and recall the commission if the trip cancels. Accrual books respect that clock: a December full of enthusiastic January bookings is not December income, and a commission received early stays deferred while the supplier can still take it back.
We keep the commission ledger keyed to departure date. At each month-end, files departed become earned revenue whether or not the supplier has paid yet, files still to travel stay off the P&L, and recalled commissions reverse the original entry rather than hiding in expenses. Supplier statements reconcile against that ledger, which is also how missing commissions get chased instead of quietly written off.
What each balance in the account really is
| Balance you can see | What the books call it |
|---|---|
| Client deposit collected, supplier not yet paid | Trust money — a liability to the client, never revenue |
| Payment forwarded to the tour operator | Trust discharged; only the commission slice comes back later |
| Commission received before the client travels | Deferred revenue, open to supplier recall until departure |
| Commission unpaid on a departed file | Earned revenue and a receivable — accrue it, then chase it |
| Service fee invoiced for planning work | Agency revenue when the work is delivered, plus 13% HST |
| Chargeback under dispute | A receivable at risk, with the client's whole trip cost attached |
| Refund owed after a cancellation | Back to a trust liability until it reaches the client |
Run this way, the balance sheet answers the question the bank balance cannot: how much of this is actually ours?
The close that TICO reads
Registrants file financial statements with TICO within three months of fiscal year-end, prepared by a public accountant, with a review engagement or an audit depending on Ontario gross sales. The same regulation sets a minimum working capital that scales with those sales, and the filed statements are where TICO tests it. An agency that discovers a working-capital shortfall at filing time discovers it months too late.
Our month-end computes working capital the way the regulation measures it, so the number is tracked all year, and our Compilation & Review Engagements practice prepares the year-end statements TICO accepts from the same books. No re-work in month eleven, no accountant meeting your ledgers for the first time in the filing window.
Back office to books, every month
The engagement fits the systems agencies already run. Trams Back Office, Tres, TravelWorks or ClientBase carry the bookings, invoices and supplier payables; independent advisors often live in TravelJoy. We map that activity into QuickBooks Online, capture supplier bills and agency overhead through Dext, and keep the trust reconciliation, commission ledger and HST coding on one monthly rhythm.
In-house counsellors run through payroll with source deductions and T4s; independent advisors on splits are a different relationship with its own paper, and the tax side of that lives with our planning work rather than here. The deeper cash question — how much of the balance you can actually deploy — is Fractional CFO territory, built on these same books. We work with agencies across Mississauga and the GTA, and every engagement is scoped and quoted in writing after a free 15-minute discovery call.
Source: Ontario Regulation 26/05 under the Travel Industry Act, 2002.
