Front_Office_Operations

Chapter 4 – Check-out procedures

Summary

	Bill
	preparation
	and
	presentation
Security for		Payment
payments		- Different
received		methods
	Check-out
	procedures
		Settlement
Group billing		- Deposit
- Credit terms		- pre-payment
- voucher		-additional
		charges
	Computerised
	- Express
	- voucher

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Chapters

1.Introduction to front office operations

2.Reservation procedures

3.Check-in procedures

4.Check-out procedures

5.Guest accounting

6.Yield management, statistics and reports

7.Security and safety responsibilities

8.Guest services and communications

9.Interpersonal and selling skills

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Chapter 5– Guest accounting

Objectives

In this chapter you will learn to :-

●The basic purpose and nature of front office accounting systems

●How to use manual, machine and computer billing systems

●How to conduct banking procedures, including documentation and reconciliation

●How to administer cash floats

●The purpose of night audit procedures and reports

●The use of ledger accounts

●The importance of credit checking and credit control

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Chapter 5– Guest accounting

Front office accounting

1.Front office accounting

1.1The purpose of front office accounting and billing system

1.2The front office accounting cycle

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Chapter 5– Guest accounting

Front office accounting

1.1 The purpose of front office accounting and billing systems

●To keep an up-to-date record of what any given guest owes at any given time - to enable both the hotel and the guest to keep track of what is owed. This generally means posting prepayments, credits and charges to guest accounts at regular intervals throughout the day so that an up-to-date balance is maintained.

●To allow control checks to be carried out, so that there is a record of every transaction; the posting of charges can be verified against chitties and payments against receipts; cash takings can be confirmed against recorded cash transactions; etc. These checks should be made as a matter of internal control, to protect the whole system from fraud, theft and error. The records also provide a method of verifying transactions and calculations in the event of guest queries.

●To allow an accurate bill to be presented to guests, reflecting what they have paid, what they have spent, and the outstanding balance owing - in such a way that they can feel confident (and confirm) that they have been charged fairly.

●To provide the hotel accounts office with accurate financial data for the compilation of the

hotel's accounts, financial reports and statistics (e.g.. on revenue and expenditure).

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Chapter 5– Guest accounting

Front office accounting

1.2 The front office accounting cycle

Front office accounting follows a chronological cycle which mirrors progress through the guest cycle.

	Accounting cycle stage	Guest cycle stage	Main activities
	Opening of guest account	Pre-arrival and check-in	● Determining and confirming the rates/tariffs to be applied
			● Checking guest's intended method of payment
			● Checking credit worthiness and establishing credit limits
			● Checking corporate and agency settlement agreements
			● Opening a master folio and extras folio for the guest
			● Crediting the amount of any deposit or pre-payment
	Maintaining the guest	During occupation	● Posting of credits and charges to the guest account as they are incurred
	account		● Verifying the postings (night audit)
			● Monitoring the guest's credit balance against credit limits, and obtaining interim payments if
			required
	SSttling and closing the	On check-in or	● Presentation of final bill(s) to guest for checking, agreement and payment (or signature on
	guest account	Following departure	bills to be paid by companies)
			● Preparation of final guest bill(s)
			● Posting of final charges
			● Checking payment and posting final credit to balance the guest account (or posting amounts
			to be paid by companies to the ledger account)
			● Forwarding master folios to companies for payment
			● Taking follow-up action to obtain payment of walk -outs, late-posted charges and late
			payments
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Chapter 5– Guest accounting

Billing system

2.Billing system

2.1Manual billing systems

2.2Machine billing systems

2.3Computer billing systems

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Chapter 5– Guest accounting

Billing system

2.1 Manual billing systems

Ledger accounts

The main accounts of the hotel, administered by the accountant will Include:

●A Sales Ledger (recording amounts owed and paid by each of the hotel's credit customers or debtors).

●A Purchases Ledger (recording amounts owed and paid to each of the hotel's suppliers or creditors).

●A Main or General Ledger (recording all the various income and expenditure, assets and liabilities of the hotel).

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Chapter 5– Guest accounting

Billing system

2.1 Manual billing systems continued…

Two main types of ledger are kept by Front Office, under the general heading of 'accounts receivable' (that is, what guests owe the hotel).

●The Guest Ledger (recording all debit and credit transactions made by registered guests of the hotel, that is, charges incurred and payments made).

●The City Ledger (recording all amounts 'receivable' from - or owed by - non-registered guests who use the services of the hotel on credit terms).

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Chapter 5– Guest accounting

Billing system

2.1 Manual billing systems continued…

The tabular (guest) ledger

In a tabular guest ledger, there is a page for each day, with a number of 'tabs' or labelled columns, identifying where transactions will be entered.

In a horizontal tabular ledger, the tabs/columns list the various types of charges across the page:

●Room and guest details: the room number, guest name, number of sleepers (relevant if the rate is per person, rather than per room) and rate (as agreed with the guest).

●A starting balance brought forward from the previous day (where relevant), showing the outstanding balance on the guest's account, as totalled-up at the end of the previous day,

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