Transferring Guest and City Ledgers to AccountsReceivable - Hotel Front Office Management

The debits and credits incurred by guests and future guests of the hotel are maintained as back office accounts receivable (monies owed to the hotel). Once the guest has received the goods and enjoyed the services of the hotel, then this financial record must be transferred to the master accounts receivable for the hotel. If a guest’s folio shows a debit balance (an amount the guest owes to the hotel) of $291 and the guest wants to pay that off by charging $291 to his Master Card, then the amount is transferred to the Master Card accounts receivable.

Another type of transaction involves the back office accounts payable, amounts of money that have been prepaid on behalf of the guest for future consumption of goods or services (sometimes referred to as back office cash accounts), such as when a guest deposits a sum of money for a future stay. For example, the personal check a guest sends to the hotel, dated February 5, for a stay on December 21 must be credited first to the

Reports created with the posting module

Reports created with the posting module

Reports created with the posting module

hotel’s back office accounts payable or back office cash account and then to the guest’s folio. This amount of money will be held for the guest’s arrival on December 21. When the guest arrives on December 21, the guest folio will be brought to the front of the folio well and activated upon registration.

These examples demonstrate that the activities in the guest ledger and city ledger are not isolated. They are reflected in the back office account. The guest ledger and city ledger are temporary holding facilities for the guest’s account. The back office accounts are the permanent arenas for financial processing.

Importance of Standard Operating Procedures for Posting and the Night Audit

Standard operating procedures for processing charges and payments are used for the night audit, which is performed to balance the day’s financial transactions. The financial activities recorded in the guest ledger, city ledger, and various departments within the hotel must be processed accurately. It is not uncommon for a night auditor to spend many hours looking for a small or large dollar amount to correct a discrepancy in the accounts.

This error can usually be traced to a front desk clerk who transposed a dollar amount($35.87 entered as $53.87) or transferred a charge to an incorrect account ($20.50 valet charge as a $20.50 restaurant charge). However, it is very difficult to detect if a desk clerk used an incorrect folio (room 626 instead of room 625). An experienced night auditor can usually pinpoint the error and resolve discrepancies caused by transposing figures or picking up incorrect accounts. Because of the tedious effort required to resolve such errors, front office managers must thoroughly train front office personnel to process guest charges and payments correctly.

This training program must include a statement of behavioral objectives, preparation and demonstration of detailed written procedures to follow when posting charges and payments, preparation and discussion of theoretical material that explains debits and credits, explanation of all related backup paperwork, clarification of the relationship of front office accounting procedures to back office accounting procedures, and delivery of hands - on training on the PMS. Such training efforts will pay off in reduced book keeping errors and better customer service.

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Hotel Front Office Management Topics