GUEST ACCOUNTING
An account is a record of a business
transaction and on this
document financial data are recorded
and summarized.
The term guest accounting from hotel
point of view means
knowledge of what is to be received
from the guest and what is paid
by the guest. To have updated
information of the same, it is
important that at all times during the
guest cycle, an efficient system
is used. Various systems such as
manual, semi-automatic or fully
automatic system may be used depending
upon the size and type of
the hotel.
The objective of the guest accounting
procedures is as
follows:
· To maintain accurate and up-to-date
guest accounts.
· To ensure that payment is received
promptly and in full.
· To provide management with accurate
and up-to-date
financial reports.
Guest Bill
The guest bill is updated immediately
as it is received from
the various departments / sales
outlets. It is very important to
maintain and record all upto the
minute details of the accounts of the
guest. A person who checks into a
hotel is usually entitled to credit
facilities for his purchases of
accommodation, food and beverages,
telephone and other facilities. The
following picture shows the
sources of guest bill.
Guest Bill
Communication Methods
Speed and accuracy in preparing and
maintaining of guest
account is very important so as to
avoid any late charges. This is
possible only when there is very
effective communication system
between the billing section and sales
outlet. Depending upon the
type of hotel the communication
methods can be:
1. Manual In small hotels, a
bell boy or a waiter or a person
from the department where sale has
taken place
rushes to the billing counter for
entry into the
guest folio.
2. Mechanical Some medium or large
sized hotels have
pneumatic tubes (pressure suction
tubes) for
sending signed vouchers of the guest
from the
department or outlet selling the
service or
commodity to the billing counter.
3. Fully Automatic System
From the point of sale terminal (POS)
the entry is
made to the centralized computer
server where
the guest folio is updated and stored.
This
method is very efficient and convenient
and is
widely used today in almost all the
medium sized
and large hotels.
PROCESS OF GUEST
ACCOUNTING
The process of guest accounting is
based on the following
concepts:
1. Financial transaction, creation and
maintenance of
accurate accounting details.
2. Making of necessary documents and
recording of
transaction on relevant documents.
3. Ensuring internal control, checking
and establishing the
accuracy of the recorded transaction.
4. Settlement of the accounts, which
may be by cash or
credit payment.
15.3.1 Types of
Financial Transaction
Financial transactions are generally
of three types:
1. Accounts Receivable
When a guest goes to the bar or
restaurant (and
consumes drinks or food) or avails
laundry
facilities, or makes telephone calls,
etc, and does
not pay cash but signs a voucher (an
undertaking
that he agrees to the specified amount
and shall
pay later) and also the room charges
etc. are all
examples of financial transaction
where amount
is to be received by the hotel from
the guest
(guest has to pay) and these are called
'accounts
receivable for the hotel. Any
'returned checks
and charge backs' (may be his previous
skipper
account) etc. are also examples of the
same.
2. Accounts Payable
These are those transactions where the
guest
pays to the hotel against his
outstanding; for
example, he pays against his bill
amount in part
or full. Also this type of transaction
would include
any allowances or discount given by
the hotel to
guest and a transfer amount, etc. Such
transactions are not very common
usually. Such
financial transactions will reduce the
outstanding
balance to be paid by the guest.
3. Cash Transaction
Cash Transaction means that the guest
pays
cash to the hotel. For example, when a
guest
goes to a bar or restaurant and is
served with
drinks or food and then presented a
check for the
same, he pays cash for that check.
Such
transactions neither increase nor decrease
the
guest's outstanding balance.
Preparing of
Documents
Documents are those where the
financial transactions of the
guests are recorded, as it is humanly
not possible to always
remember all the transactions made by
all the guests. Various
documents are generated during the
process of guest accounting.
The types of documents generated also
depend upon the system
used, but some documents will always
be there no matter whatever
system is followed.
1. Vouchers Vouchers are also
called checks. A document to
detail transactions at point of sales
and meant to
transmit transactional information to
front office of
guest charges which need posting. When
a guest
consumes some services / facilities /
goods of the
hotel from any of its departments or sections,
the
concerned department prepares the
voucher. This
is a support document of the financial
transaction.
When the guest signs the voucher /
check for the
amount of goods / services consumed by
him the
voucher is sent to the front office
bill clerk to be
posted to the guest account card /
guest folio.
Commonly used vouchers in hotels are
cash
voucher, charge voucher, transfer
voucher,
allowance voucher, check out voucher,
credit card
vouchers, paid out vouchers, etc.
2. Folios A folio is a document
which is initiated at the time
of arrival of the guest normally and
all guest
transactions are recorded on it, which
increase or
decrease the balance of account. This
is also
called as 'guest accounts card' and is
prepared for
every guest and room. In some hotels,
it is also
called guest weekly bill. All accounts
receivable,
payable and paid out transactions are
entered in
this document. The information about
the value,
time and date and the place of
financial
transaction is communicated by the
concerned
section / department through signed
voucher /
check). Following are the different
types of folios
that are used by the hotels.
· Individual
guest account card or folio:
Maintained to record transaction made
by
individual or independent guest with
the
hotel. Also called as Guest Folio.
· Group
folio: One folio for the whole group and
this folio is required for recording
all the
transactions made by the group (which
are
part of the package of the group).
This is also
called as 'Master Folio'.
· Semi-permanent
or Non-guest folio: In this
folio the credit financial transaction
made by
non-resident guests with the hotel are
recorded. Also known as 'city account
card'
or 'non-resident guest account card'.
· Employee
folio: As the name suggests the
financial transactions (if any) made
by the
employees are recorded in this folio.
These
folios help in calculating incentives
to the
employees.
· Permanent
/ Companies / Airlines / Agents
folio: Separate folios are
maintained for all
the companies, agencies and
organizations
with whom the hotel has permanent
billing
arrangements.
3. Postings Posting is the
process of recording transaction on
the folio. Posting will result in a
new balance of
account. The posting may be done by
hand
writing method (manually) by machine
such as
NCR (semi automatic system) or through
computers (fully automatic system).
4. VTL VTL (Visitors'
Tabular Ledger) is also called the
'tab' by some hotels. It is another
document used
in small hotels. It shows debits and
credits
activities of the guest account.
5. Account Aging Report
A document telling and supervising the
receivable
account from the guest which have aged
over a
specific period of time. Account aging
refers to the
method(s) of tracking past due
accounts based on
the dates the charges were incurred.
To illustrate,
credit card payment accounts usually
have ages
of maximum one month. However, some
other
non-guest accounts (eg. late charges,
disputed
bills, bad cheques and skippers
accounts) might
have ages measured in months, and even
years.
Below, is the terminology associated
with each
account age:
· Less than 30 days Current Accounts
· 30 to 90 days Overdue Accounts
· Older than 90 days Delinquent
Accounts
6. Sales Journals
A document which records cash sales of
a
department
7. Cash Receipts
A document issued by the cashier to
the guest
when the cashier receives payment from
the
guest and then entered in cash
register receipt
ledger
Checking and Ensuring
Accuracy
This stage of accounting process is
also called as 'auditing'.
Usually auditing is done during the night
by Night Auditor when the
business is relatively slow and hence
the process is called Night
Auditing. This stage of the process is
important to ensure the
accuracy of accounts balance so that
if there is any discrepancy
between outstanding folio balances and
departmental balances then
the same may be sorted out without any
delay. For an account to be
correct it is important that the total
outstanding guest balance should
be equal to the sum of respective
department's charged sale.
Settlement of Account
It is a very important phase of guest
accounting process. This
phase is involved in a major activity
of 'zeroing out' the folio balance
i.e. the outstanding debit balance is
neutralized by the settlement of
credit balance. The settlement can be either
by cash payment by the
guest or by credit card charge or by
transferring the account to
company account. In the last two
cases, the balance account is
transferred to city ledger account.
CREDIT CONTROL
The term credit control refers to the
various measures taken
by a hotel to ensure that guests
settle their account in full either
themselves or someone else on their
behalf (which may be credit
card company, an airlines, a corporate
office or any other agency or
person) and does that within a specified
period of time. Various
steps that will help in credit control
are to be taken at various stages,
by various personnel of the hotel.
Objectives of Credit
Control Measures
i) To avoid and prevent loss due to
walk-outs. Here the
term walk-out include all those guests
who knowingly or
unknowingly or by mistake leave the
hotel without
paying/ settling their bills.
ii) To reduce the problems of
inconvenience which the
cashier (who will not have
verification of bills), the
house keeper (who won't know the room
status) and
the management (who may decide to
start legal
proceeding) etc. will face because of
a walk-out guest.
iii) To prevent late settlement of
guests accounts. The
delay in payment can cause cashflow
problems for the
hotel and if there are many such cases
the hotel may
find itself in difficult situation to
operate, and bad debts
may increase.
iv) To avoid guest dissatisfaction, embarrassment
and
annoyance at the check out time when
all of a sudden a
departure guest is informed that the
hotel does not
accept any particular company's credit
and or that the
hotel does not accept that particular
currency in which
he wishes to pay or his total bill is
above the credit limit
of the credit card company and the
company refuses to
approve a higher limit.
Common Causes for
Unpaid Account Balance
i) Guest is not explained clearly as
to which credit cards
are accepted and that which are the
acceptable
currencies, and if the bill exceeds
the credit limit then
he will have to pay the balance in
cash.
ii) Communication gap between credit
department and
cashier- for example failure of the
credit department in
timely communication to cashier that
the bill amount of
guest has exceeded the limit.
iii) Negligence and carelessness for
example ignoring to
look at the black list. To avoid such
problems, it is
important that the guests are given
clear instructions at
the time of check-in, timely notification
of the exceeding
of credit limit, reference to black
list frequently, and
making sure that the guests who come
with company
credit facility and other such credit
facilities such as
airlines, and travel agents etc,
understand that they
have to sign their billing statement,
before leaving the
hotel at checkout time, and finally it
is important that all
the concerned departments and sections
etc must
follow the credit policy of the hotel
very strictly and
religiously.
CASH CONTROL
Like credit control cash control in a
hotel is also of great
importance. Cash control involves that
all the transactions which the
guest makes in cash with various sales
sections of the hotel are
recorded immediately and cash
collected. All the cash is kept
properly under lock and key and under
the supervision of cashier.
The petty cash is also controlled and
a proper check on that is made
since hotels don't encourage credit
sales, and for proper cash sales,
the cash control becomes all the more
important for a hotel. Usually
cash sales should be encouraged at
areas such as health club,
swimming pool and car parking etc.
Payment in hard currency,
traveler’s cheques and bank drafts are
considered to be cash sales.
Whenever a guest pays cash it is
mandatory for the cashier to make
cash receipt and hand it over to the
guest. The cash collected every
day must be sent to the bank for deposit.
Thank you so much for giving knowledge.
ReplyDeleteReasons for the hotel to worry about guest control
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