Front_Office_Operations

Chapter 5– Guest accounting

Billing system

2.1 Manual billing systems continued…

The tabular (guest) ledger

●Debit charges to the guest's account (amounts the guest owes) are grouped on the left hand side. These may Include columns for the room charge, breakfast, lunch and dinner (split into separate amounts for accounting purposes, even if the rate reflects inclusive room-plus-meals terms), bar charges, telephone, mini-bar, newspapers, sundries and Visitor Paid Outs (VPOs) - plus a column for the total of all these debit charges.

●Credit charges to the guest's account (that is, amounts the guest has paid) are grouped on right-hand side. This would typically include columns for:

www.cthresources.com	Page 281
	www.cthawards.com

Chapter 5– Guest accounting

Billing system

2.1 Manual billing systems continued…

–Cash or payments, under which are entered any deposits, pre-payments or part payments made on the day. 'Cash' is a shorthand term for 'bankable' forms of payment such as cash, cheques, traveller's cheques or credit cards. If the hotel wishes, the cash/payments column can be subdivided accordingly.

–Credits or allowances, under which are entered any refunds made by the hotel, or credits made to cancel out wrongly posted charges or over-charges.

–Ledger, which covers arrangements by which the hotel has claimed or will claim back an amount from someone else after the guest's departure: e.g.. a group organiser, company or travel/booking agent, and some credit card companies, such as American Express and Diners Club, which require the hotel to send a statement to the card company to obtain payment. The ledger column may be subdivided into Ledger Received (for payments already obtained by this means) and Transfer to Ledger (for payments which need to be transferred to the City Ledger for future payment).

www.cthresources.com	Page 282
	www.cthawards.com

Chapter 5– Guest accounting

Billing system

2.1 Manual billing systems continued…

●A balance carried forward to the next day (where relevant). If the debit charges are equalled by the credit charges on a given day, there will be a zero balance to carry forward - and this should be the case for a guest who has paid his final bill! If the debit charges do not equal the credit charges, the balance will be inserted as the starting balance for the following day's sheet. It will also offer a useful guide to how much of a bill the guest has 'run up' so far, for the purpose of credit control (e.g.. if the hotel has imposed a credit limit on a chance guest).

Each column will be totalled-up at the end of the day, providing analysis totals: how much has been spent on accommodation, meals, alcohol, phone calls; how much has been paid in by cash, credit card or ledger; and so on. This gives useful information on guest spending and the sales performance of different departments and services.

A simple manual version is illustrated at Figure 5.1, overleaf. It would look quite similar if the hotel set it up as a computer spreadsheet, (e.g. in Microsoft Excel - except that the spreadsheet software would automatically keep running totals for you, and you could have many more columns in your record, without the constraints of space as on a paper page.

www.cthresources.com	Page 283
	www.cthawards.com

Chapter 5– Guest accounting

Billing system

2.1 Manual billing systems continued…

In a vertical tabular ledger, the columns represent the room numbers - and the rows represent the different categories of charges: debit charges at the top, and credit charges at the bottom: Figure 5.2. This format may be used to prepare the guest bill at the same time as the tab, by having billing stationery in the same format, and using carbon paper (or no-carbon-required document sets), so that as entries are written onto the tab, they are duplicated on the bill.

Using the tabular ledger

Whichever format is used, a number of operations can be carried out using the tabular ledger.

●At the beginning of each day, current occupants will be carried forward in room order, but when a new guest checks-in, a new tab entry will simply be added to the end of the list.

●Room charges for new guests can be entered on check-in, and all other room charges entered at a set time of day (e.g. 6 pm).

www.cthresources.com	Page 284
	www.cthawards.com

Chapter 5– Guest accounting

Billing system

2.1 Manual billing systems continued…

Using the tabular ledger continued…

●Other debit charges are posted periodically as vouchers come in from other departments, with the vouchers being crossed through once they have been dealt with.

●Credit charges are also posted periodically, as pre-payments or allowances are made.

●All entries to the tabular ledger will be copied to the guest bill (either manually or using duplication sets with a vertical tabular ledger).

●Amounts in the 'transfer to ledger' column are copied to the City Ledger.

www.cthresources.com	Page 285
	www.cthawards.com

Chapter 5– Guest accounting

Billing system

2.1 Manual billing systems continued…

Using the tabular ledger continued…

●At the end of each day, the tabular ledger must be 'balanced'. That is, the record is checked for accuracy by verifying that everything tallies·

–Total debit charges (amounts owing) should equal total credit charges (amounts paid or recorded as owing).

–Amounts of cash taken should equal the cash column on the tabular ledger.

–The amounts in the ledger column should equal amounts featured in, or transferred to, the city ledger.

–The total 'balance carried forward' should equal the total of outstanding guest bills.

When the guest checks-out, the bill is totalled and the top copy presented for payment. Once the guest has paid, the payment is entered as a final credit charge in the tabular ledger. The account is then balanced: the total debit charge equals the amount billed equals the total credit charge,

leaving a zero balance outstanding.

www.cthresources.com	Page 286
	www.cthawards.com

Chapter 5– Guest accounting

Billing system

2.1 Manual billing systems continued…

Advantages of tabular ledger systems	Disadvantages of tabular ledger systems
Cheap and simple to use	Time consuming making entries
	Requires manual/calculator calculations: time
Flexible, as headings can be inserted as required	consuming and subject to error
	Requires additional time for checking, balancing,
Easy to check by balancing	bill-preparation

www.cthresources.com	Page 287
	www.cthawards.com

Chapter 5– Guest accounting

Billing system

Figure 5.1: Vertical tabular ledger with bill

Source :adapted from Dix & Baird, Front Office Operations

www.cthresources.com

Page 288

www.cthawards.com

Chapter 5– Guest accounting

Billing system

The City Ledger

A functions organiser may put down a deposit on a banquet. A local company may keep an open account at the hotel for entertaining / accommodating visiting clients. A business traveller may have her bill paid for by her company, which has a credit account with the hotel. A tourist may have prepaid a travel agent, who will be invoiced later by the hotel for the amount. All these transactions are examples of amounts owing by credit customers who are not themselves registered guests with the hotel.

www.cthresources.com	Page 289
	www.cthawards.com

Chapter 5– Guest accounting

Billing system

2.2 Machine billing systems

Billing machines were introduced in the 1950s, at which stage they were electro-mechanical (relying on gears and cogs powered by an electric motor): more modern equivalents are electronic.

Billing machines essentially fulfill the same functions as a combined bill/tabular ledger entry system, except that they carry out the calculations for you.

●Instead of a tabular ledger record, the machine stores the various charges in a register (or memory!, and prints out a 'summary sheet' of the cumulative totals for each category/ department. (The transactions are listed on an 'audit role', allowing checking if necessary.)

●Guest bills (or 'guest folios') are printed out, usually in duplicate sets: the top copy being presented to the guest and the sheet beneath retained for the hotel's records.

The operation of billing machines varies widely - and you are unlikely to come across them, since they have been replaced by computer packages.

www.cthresources.com	Page 290
	www.cthawards.com