Check- out and settlement process

 

Step By Step Process Of Guest Check-out

Introduction.

The guest check-out procedures are highly crucial, since all guests are in a hurry to leave the hotel to catch Train, bus or flight to reach their Next Destination.

So in this case the front desk staff should take more caution in planning his work as a professional. Guest check-out is the final stage of guest cycle and it is one of the most important. You should always consider the last impression also equally important to guest first impression about hotel services and facilities.

Great care must be taken to review of guest bill and its settlement. The staff must handle check-outs efficiently and courteously by less time consuming so that one can achieve guest satisfaction.

ORGANISING GUEST CHECK-OUTS

Very often we can see that Guests are in a hurry to leave the hotel premises once the formalities are completed in guest check-out. Some guests get impatient when they have to wait in queue or a long time is taken to produce their bills or to answer their queries. Careful preparation will reduce these kinds of problems. It will also reduce the risk of making mistakes which is loss to the hotel in terms of money.

The following Procedures are followed at the time of guest check-out.

1.                  During the night shift the front desk staff prepares the   next day  advance  departure  list which is circulated to all major departments( Food and beverage ,Housekeeping, Security)

2.                  The departure list will alert all the departments to post all last minute bills (for example room service food bill or laundry) of the guest in guest folio.

3.                  Mode of payment of the guest should be checked in advance.

4.                  Ensure that all guest bills are posted in guest account.

5.                  Sales of different department bills should be identifiable by guest.

6.                  Check for any error in posting of  guest bill

7.                  Ask the guest to check his final bill and sign. Get approval from guest to take the

             printout of bill.

8.                  With the help of computer system bills may be printed in advance during busy hours.

9.                  This helps in smooth settlement of guest bills.

 

Importance of guest checkout at hotels:

Check-out is a great opportunity for every hotel to offer further guest services to develop guest relations by the hotel staff. The guest should be assisted in handling their luggage, by enquiring about the guest onward journey travel arrangements, arranging taxi for airport/railway station etc.

The front desk staff may offer assistance for any room reservation at same chain of hotel at the guest’s next destination at the time of check-out.

Departing guest is the best judge to evaluate the hotel services offered by all department staff during guest stay in the hotel. Guests are requested to fill up guest feedback form with the good points and bad points through which the hotels can improve their service standards by the comments/suggestions given by the guest. This is valuable information for hotels to identify their week areas of hotel facilities and services to improve in the near future.

Check-out is a major point of guest stay in hotel, where guest is more worried about their final bills or some wrong posting of charges in guest bill. Hence the check-out process should be made as relaxed, positive, trouble-free as possible for the convenience of guest. The speed and accuracy in preparing and presenting guest final bill will lead to develop guest satisfaction.

The hotels follow standard set of procedures for the smooth departure of guest from the hotel

 

Check-out request made by guest:

Guest can contact reception through telephone/in person about their check-out and wish to depart from hotel. This information is communicated to all other concerned sections that provide guest services during their stay in hotel. While processing the departure activities the front desk agent should confirm the details like Name of the guest, room number, etc and check the departure date mentioned in guest registration card. Communicate to bell desk to send a bell boy to guest room to bring down the luggage from guest room.

 

CHECK-OUT TIMING TO BE FOLLOWED:

Most hotels inform their guest about check-out timings as per hotel policies at the time of guest making a reservation to avoid problems at the time of guest departure. Hotels generally follow either 24-hours checkout or  12-noon checkout.

 

Accounting all transaction of guest bill:

The front office cashier will co-ordinate with other departments like housekeeping for any laundry bills to be posted in guest accounts, food and beverage department for any room service bills/ restaurant bills etc.

Since it is very difficult to collect the payment for unsettled bills after guest has checked out. Some time even guest may refuse to pay for the un posted bills. So the cashier must ensure that all bills are posted in guest folio before bill settlement.

 

TO UPDATE GUEST FOLIO BY CASHIER

The cashier must update guest folio by adding the last minute bills from other point of sale. To check for any late checkout charges if applicable. For example if the hotel checkout timing is 12-noon and the guest depart at 5.00 in the evening, the guest will be charged for late checkout. Cashier should make sure that all bills are posted before preparing final bill.

 

TO PREPARE FINAL BILL:

Guest final bill is prepared on the basis of guest folios. Front office cashier must promptly enter the late checkout charges or last minute bill from other revenue generating departments. Some common bills which are generally remain unposted in guest bill at the time of checkout which is loss to the hotel revenue.

 

 

To avoid any such above mentioned un posted bills in guest folio, the front office cashier can call through telephone to other departments to send the bills to front office which can be posted without much delay or enquire with guest about their last minute bills.

      The other department also should cooperate to send the guest bills by deputing some staff to directly handover guest bills to front office cashier for smooth guest checkout to avoid any loss in revenue to hotel. It is very difficult to collect money from guest after checkout formalities are completed and the guest left the hotel.      

To confirm the mode of payment from guest:

The method of bill settlement is generally confirmed with the guest at the time of making room reservation or at the time of guest check in at the hotel. The guest will make appropriate entries in GUEST REGISTRATION CARD. So that it is easy for the cahier to perform checkout in professional manner. The mode of payment will differ from guest to guest in terms of guest profile and status. The guest can settle their bill by cash, credit card. Debit card, travel agent vouchers, personal cheque, and bill to company, foreign currency, etc.

The above mentioned mode of bill settlement is generally followed in all luxury hotels, so that the cashier can prepare guest folio in advance. But it is very important to confirm the mode of bill settlement at the time of guest check out also. Because even at the last minute the guest can change their mode of bill settlement, and the cashier should be able to handle such kind situations.

 

 

RECEIVING PAYMENT FROM GUEST:

After the final preparation of guest bill, it is given to guest for reviews. Once the guest is satisfied about their bills receive the payment as per the pre-decided mode of payment. Any posting error should be shown to the cashier for necessary action by guest. Incase of cash settlement check the currency notes and hand over the balance to guest. PAID STAMP seal is put on top of the guest copy of bill. Put the bills in hotel envelope and hand over to guest.

 

MARKETING ACITIVITY PROCEDURE DURING CHECK-OUT:

Since guest check-out is the final stage where guest come in contacts with front desk staff, the hotel staff should use this opportunity for marketing efforts for promoting hotel business.

The following marketing strategies may be followed

ü  Receptionist can politely enquire about guest experience at the hotel during their stay.

ü  Guest may be given feedback/guest comments card to fillup.

ü  Incase any guest complaints, assure the guest for taking action.

ü  Providing service in terms of future reservation for the guest trip or helping the guest in making room reservation at the next destination of the guest.

ü  Thank the guest for staying in the hotel.

 

UPDATING ROOM STATUS RECORDS AFTER GUEST DEPARTURE

Once the guest has cleared his/her bills and checked out, the front office staff must update the room status records for reselling of rooms. The front office removes the Name tag slip from the information desk, room rack so that the checkout rooms may be cleaned for next guest. If it is not followed the room will be vacant and dirty and it cannot be given to any guest, which is loss to the hotel.

 

 

Do’s and Don’ts during check-out.

 

DO

• Prepare in advance it is compulsory for all the front office staff at  the time of guest departure.

·                     Ensure all charges are posted

·                     Check for accuracy

·                     Allow guest to check his/her bills

·                     Be careful while handling cash

·                     Know the hotels credit policy

·                     Follow the rules and regulations of the hotel

·                     Ensure that the billing formalities are done properly

·                     Ask for help if  you need it

 

DON’T

·                     Rush and cause mistakes to happen

·                     Be careless in handling guest money

·                     Be afraid to ask help from senior staff members.

·                     Panic to handle guest complaints related to guest bill.

 

Some common points in handling checkout at cashier desk.

Ø    Greet the guest by name, if known, and ask for the room number.

Ø    Collect all the bills and vouchers which are attached with the guest folio.

Ø    Confirm with the guest for any recent bills like breakfast bill in restaurant.

Ø    Inform and collect pending bills from other departments.

Ø    Take a printout of guest bill and handover to the guest in polite manner.

Ø    Inform the guest if you have any query in billing, we are ready to assist you.

Ø    If the guest is fully satisfied with the billing then take the payment.

Ø    Handover the remaining balance amount if any along with guest copy of the bill by marking PAID TAM

Ø    Put the bill in a hotel envelope and handover it to respective guest.

Ø    Thank and say good bye to the guest for example,

“Thank you very much for staying with us Mr. Raj I hope you have enjoyed your stay in our hotel. Please give us an opportunity to serve you again”.

 

Notify all other departments that

·                     Guest has vacated the room

·                     If any luggage the guest wants to leave under hotel custody at bell desk for a week.

·                     Update the room status in the computer system as vacant and unclean.
·                     Inform the housekeeping department to clean the room, so that the room can be resold 

 

Creating  Guest History at the time of Guest checkout

Guest history is  a file which contains all relevant personnel information about guest details about guest Name, age, sex, Designation, Company, Marital status, Salary, Likes, dislikes, Interest in sports, Music, choice of Food, Any Special habits etc.

Front office Department plays a very important role in maintaining and updating guest history time to time.

Generally in all hotels this type of data maintained to know about their guest preference in terms of providing great customer service by all hotel staff.

 

Guest history helps in providing information about

·                     Name of the guest

·                     Address and e-mail id

·                     Phone/mobile no

·                     guest choice of rooms

·                     mode of payment

·                     designation/company

·                     date of birth

·                     sex

·                     wedding anniversary

All these details are collected at the front desk and entered in the guest computer data. This file provide information about guest financial status, spending pattern, mode of bill settlement, previous visit date, any complaints and suggestions given by guest.

Having such information helps the hotel to provide better guest service.

 

Benefits of Guest History Record

·                     It helps to know about their guest

·                     It helps to promote business

·                     It helps to serve guest better according to their needs and choice

·                     Better understanding with guest

·                     To wish the guest on birthdays,  Anniversaries, Festivals,

·         To provide professional and anticipated service to guests
·                     Act as a bridge between the management and guest.

·                     For any future reference of guest

 

Departure Procedure in Fully Automated System

·                     The departure procedure in a hotel running on a fully automated system is smoother

·                     And more efficient. It involves the following steps:

·                     The front desk prepares the master bill by selecting the bill option of the cashier module

·             The front office presents the master bill, along with supporting vouchers, to the guest for review.    ·                     The payment is received from the guest as per the predetermined mode of payment

·                     The front office makes the luggage out pass.

·                     The front desk communicates the departure of the guest to housekeeping and all the other                               concerned departments.

·                     The front office records are updated automatically. These include:

·                     The auto removal of the name of the departed guest from the in-house guest name list.

·                     The automatic updating of the current room status—from occupied to vacant/dirty.

·                     The automatic updating of the guest history card.

 

 

 

 

 Modes of guest bill settlement

 

Introduction

It is quite common that the guest determine the mode of bill settlement at the time of reservation or at the time of registration. These procedures are strictly followed by all hotels to make sure that guest departure process is convenient and less time consuming, and cashier also aware of the guest preferred method of bill settlement.

 

 

 

There are various acceptable modes of bill settlement like

Ø    Cash settlement

Ø    Travellers cheque

Ø    Personal cheque

Ø    Demand draft

Ø    Debit card

Ø    Credit card settlement

Ø    Travel agent voucher

Ø    Bill to company

Ø    Foreign currency settlements

 

 

 

 

 

Procedures involved in handling cash settlement

Cash payment is the easy and simple mode of bills settlement which is very convenient for hotel and guests. Cash is still the most commonly used payment method to attract and retain guests.

·                     Cash is accepted in all point of sale like room service, restaurant, laundry, spa, business centre etc.

·                     Guest can directly pay for the hotel services

·                     Cashier may give the receipt of guest copy with the PAID STAMP.

·                     Zero down the Account balance of the guest bill after receiving cash from guest

·                     Cash transactions should be maintained in cashiers report.

·                     Return the appropriate change to guest if any

·                     Counting of currency should be done carefully by the cashier.

 

 

ADVANTAGES OF ACCEPTING CASH

ü    High liquidity: money can be reused without delay for any other transactions

ü    Cash can be deposited in bank to earn interest

ü    Fairly high worth to do cash transactions

ü    No processing fees as extra added to guest accounts

ü    Convenient for small transactions

ü    No special equipment required in dealing with cash

 

 

DISADVANTAGE OF ACCEPTING CASH

ü    Low security, high risk of theft

ü    Manpower cost, transportation cost involved in depositing money in bank.

ü    Time consuming to deposit cash in bank

ü    Common errors possible in counting of cash

ü    Time consumed in giving change or balance to guests

ü    Inconvenient for large transactions

ü    Not very safe to carry cash in hand.

Traveller’s cheque:

 

Traveller’s cheque in short it is called as TC. It is accepted all over the world. It is a cheque for a sum in a specific currency which can be exchanged anywhere for local currency or goods. Traveller’s cheque is very famous across the world in terms of settling bills in hotels. It is issued by recognised banks/financial institution, it function as cash. Traveller’s cheque is useful while travelling in foreign countries. The value of travellers’ cheque is mentioned in it. Some bank charge for commission when we encash the cheque and some bank don’t charge for it.

 

 

Advantages of Travellers cheque:

 

Ø    The cheques are issued in fixed denominations by major banks, Travel agents.

Ø    No need of bank account for purchasing traveller’s cheque

Ø    Two signatures are required one in the presence issuing authority at bank and second signature of guest at encashing authority (hotels)

Ø    These cheques are valid for indefinite period of time unless dated

Ø    This type of cheque never bounces, since it is already paid by guest at bank.

Ø    Quite safe in carrying traveller’s cheque.

Ø    Incase of loss of traveller’s cheque it should immediately reported to issuing bank and local police station.

 

 

Procedures followed in accepting Traveller’s cheque in hotels:

v    Make sure that the second signature of guest is singed in front of the cashier

v    Guest passport details may be checked by the cashier for guest identity.

v    At the back side of the traveller’s cheque cashier should enter the passport no.

v    If the traveller’s cheque is in foreign currency, then calculate the correct exchange value 

v    The cashier must return the balance in local currency.

 

 

 

 

Advantages of accepting traveller’s cheque

 

§     Easy to carry in foreign country

§     Reduced risk of theft due to no transferability of money

§     Customer service in terms convenience and safe for travellers

§     Better exchange rate and no expiry date.

 

Disadvantages of accepting traveller’s cheque

 

§     It takes time to clear before funds are available.

§     Banks charge as a small commission for exchanging them.

§     Normal bank clearing system to receive money from bank.

 

 

DEMAND DRAFT:

 

Demand draft in a written order form which is issued by the bank for the payment of money for the person on whose name the draft is issued. The bank authorises to make the payment once it is presented to the bank. Any person can obtain a demand draft by filling the necessary documents prescribed by bank and paying the draft amount and the bank will charge some commission amount for preparing demand draft.

Main features of demand draft:

·                     No need of bank account to obtain demand draft

·                     Draft is endorsed by bank

·                     It is widely accepted

·                     Issued by concerned bank

·                     This draft is signed by the issuing authority of the bank

·                     Draft is valid for six months from the date of issue, so sufficient time is provided to encash the amount

·                     Generally draft is crossed and amount is released for account holder only.

·                     Payment will be made to hotel since the amount is already prepaid by guest to bank.

·                     No risk is involved money will be paid.

·                     In case demand draft is stolen or misplaced in that case you can inform the bank for necessary action.

·                     Since the commission charges also prepaid by customer at the time of issue bank will not charge any additional charge at the time of withdrawal of amount.

·                     Demand draft also safe mode of money transaction in any establishments

 

 

DEBIT CARD

 

Debit card also a mode of bill settlement generally accepted in all hotels. A debit card is a card made of plastic that allows the guest/customer to access their funds immediately, electronically. it allows the guest to withdraw money from ATM MACHINES, and it also used to pay the guest bills in hotels ,restaurants, malls, shopping centres etc. While settling bills these cards are given to the cashier to swipe in the machine for deducting money directly from their saving account and the customer has to authorise the payment by pressing their PIN NO in the machine and the amount will be deducted from the customer account.

 

Advantages of debit card

 

Ø    Very safe and convenient mode of bill settlement

Ø    Guest need not carry cash all the time

Ø    Customer friendly easy in carrying in wallets

Ø    Amount is immediately debited from guest account and credited to hotel account for payment

Ø    Incase of insufficient funds in guest account bank will not authorize the payment

Ø    Immediate SMS FACILITY on guest mobile about the details of transaction 

Ø    Guest need to sign the copy of charge slip for payment

 

Credit Mode of Bill Settlement:

 

 

Credit card settlement:

 

INTRODUCTION

It is a popular method of guest bill settlement for payment room rent and services provided by hotel to guest. Most of the hotels accept at least one or two major credit cards for example Master card, American express, visa card, diners club, Sbi card, Icici, Hdfc etc.

 

Credit cards are convenient for travellers: they don’t need to carry cash or cheque book during their journey. Most hotels nowadays use electronic machines linked directly to the bank, card details are collected through magnetic swiping machine for appropriate payments

 

Credit cards are generally made of plastic that allows the guest to obtain services from any establishment on credit term without paying cash. Other name of credit card is (PLASTIC MONEY).

 

HOW TO PROCESS CREDIT CARD FOR PAYMENT:

 

Most of the hotels entertain credit card payment because of the electronic machines linked by telecommunication links directly to concerned bank and all relevant information of card is collected when it is swiped in EDC MACHINE (ELECTRONIC DEVICE CIRCUIT).

 

·                     After receiving the credit card from the guest for payment the cashier inserts or swipes the
             card, and enters the bill amount and the hotels identification code.

·                     Details are obtained to the bank’s computer system for approval.

·                     Bank will give its approval on the basis of card validity, expiry date, and credit limit of the card.

·                     The guest is generally requested to enter their PIN NUMBER Personal identification no 
              which is  generally of 4-digit, to confirm the guest identity to accept the transaction.

·                     The machine produces two charge slip

·                     Guest is requested to sign the charge slip in which all relevant information of transaction 
             date, place, time, amount, etc.

·                     The cashier will verify guest signature on the charge slip with signature on the card at the 
             back side , to prevent misuse of card.

·                     The top copy of charge slip is given to the guest for their future reference.

·                     The second copy along with the guest signature is kept with the hotel for processing of 
             payments from the bank.

 

Importance of credit card:

 

1.                  For obtaining credit card bank account is not compulsory.

2.                  Credit cards are issued by concerned bank on the basis of guest income/salary

3.                  Specific credit limit provided to guest based on the type of credit card.

4.                  The guest may enjoy minimum of 45 days credit duration to repay the amount.

5.                  Billing dates are fixed by the bank

6.                  You can withdraw cash also from ATM as per the card limit fixed by banks.

7.                  Guest need not carry money, instead they can carry a credit card in any part of the world for s

 

 

 

Advantages of credit card

·                     High security involved during transaction

·                     Safe and secure and easy to carry

·                     Less risk of theft, if the card is lost you can immediately call up the bank to deactivate the 
            card, so that nobody can use it.

·                     Very good customer service provided by bank SMS alerts for any billing takes place.

·                     Guest can convert their billing amount for example 60,000 into easy EMI 

·                     Guest can use their credit card for ONLINE SHOPPING 

·                     Credit card encourage guest in higher spending

·                     Provision of bonus points on every shopping which the guests can encash

·                     Sms alerts to guest mobile on every transaction made with information 

Disadvantages of credit card

·                     It takes time to receive payment from bank at least one week.

·                     Banks charge 2 to 3 percent as commission for transactions.

·                     Danger of credit card fraud

·                     Credit card should be kept in safe custody and all passwords should be kept confidential.

·                     Possibility of network error at the time of billing and payment.

Travel agent voucher

INTRODUCTION

These  type of travel agent voucher is issued by travel agents, who sells package tour to a tourist in advance which includes room accommodation, food charges, sightseeing,  transportation, ticket fare etc.travel agency voucher indicates that the guest has already paid in advance to travel agency for arranging all necessary arrangements for a tour.travel agents send a copy of voucher to the hotel at the time of room booking, and second copy of the voucher is given to guest .At the time of check-in at hotel, guest submit the travel agent voucher at reception desk.

Most of the voucher includes the services to be offered by hotel to guest .guest must be aware about the services include in the voucher. Any extra charges will be recovered from guest directly.

Points should be kept in mind while handling Travel agent voucher for bill settlement:

A.                  Read the voucher carefully issued by travel agent

 

B.                  Refer to the list of approved travel agents to whom the hotel offers credit for safe side of 

             business.

C.                  Check the billing instruction carefully what all the services are included and what are the 

             extra services to be paid directly by guest.

D.                 Incase of a foreign travel agency voucher get authorization from the lobby manager.

E.                  Check the expenses which are covered under the voucher

F.                    Enclose all the bills signed by guest, with the master bill and request the guest to verify and

             sign the bill.

G.                   Do not hand over the original bills to guest or group leader as original bills has to be 

             presented to travel agent which is going to make payment to hotel.

H.               The original bills will be sent to account section for the collection of payment from travel agent.

Corporate billing or bill to company

Tour companies and business paying for their employees’ travel, will generally find themselves making regular high frequency of hotel room bookings. The companies may find it difficult and costly, to pay for each stay of their company staff.

The hotel will have carry out a market survey to check the company’s reliability in the market .The following points will be considered to establish credit facility to the company with the hotel.

A.                  Company turnover per year

B.                  Company branches in other states in India/abroad.

C.                  Average room booking expected in a month/year.

D.                 Types of rooms required for company staff

E.         Room rates, meal plans and facilities for company staff.

After considering the above points the company and the hotel have a mutual agreement in terms of 
business. The terms and conditions of payments also predetermined. The room reservations are 
made by the company on behalf of their company executives. The hotel will send the confirmation 
letter once the room reservation request is made by the company for their staff. Reservation section
will coordinate with company in sending the confirmation letter which will mention the type of
 room reserved and rates which are agreed in contract between hotel and company.

 

The company executive will carry the room confirmation letter at the time of check-in at hotel. 
Since the rooms are reserved the company guest will be assigned rooms. During check-in the 
company guest need to show the company visiting card for their identity.

The room rates which are mutually agreed between the hotel and company is called COMPANY 
VOLUME GUARANTEED RATES (CVGR).

And all the relevant bills will be sent to the company for payment. Guest need to pay for only Extra 
charges like laundry bills, beverage bills etc.Because these EXTRA CHARGES are  not included 
in the agreement.

Steps followed in BILL TO COMPANY (BTC)

v  All the company guest need to confirm their identity by producing company identity card/ 
     visiting card at the time of check-in procedure at reception desk.

v  BTC LETTER-has to be produced which is prepared on the company letter head with the 
    details of guest name, room type reserved single/double/suite and date of arrival and departure.

v  The cashier should verify that the company is listed in the company volume guaranteed list 
     (CVGR) of the hotel.

v  The cahier must check whether appropriate discount is given on room rent as per contract 
      agreement.

v  Any EXTRA SERVICE which is availed by guest which is not covered under company policy 
       should be charged separately from guest.

v  Guest is politely requested to pay for extra charges at the time of checkout.

v  Verify all supporting bills are added and attached with guest folio

v  The cashier prepares the final bill, and requests the guest to verify and sign the bill.

v  Do not handover the bills to company guest. All original bills must be sent to company for 
      receiving payments.

v  Cashier will send all company bills of the day to Accounts department for getting payments from 
      company.

v  Company bills are not settled directly by guest, it has to entered in CITY LEDGER (Non-guest 
      account/unsettled bills) which is specially maintained by Accounts department for collection of 
       money from company, regular clients, VIP’s, etc.

Bills settled by foreign currency

Today tourism is one of largest and fastest, dynamic sectors for the development of our country. Hospitality industry earns foreign currency by providing comfortable luxury Room accommodations and food services, safe environment to foreign tourist. All foreign tourists staying in hotels can settle their bills in the currency of their respective countries- Dollar, Euro, Pound, etc. ---except guests who are employed with UN and its agencies, Embassies, and High Commissions. Even if the guests have already converted their currency into Indian currency, they still have to pay the room rent and bills in foreign currency only.

 

Some larger hotels also offer facilities to exchange the currency. The hotel can make a profit by accepting foreign currency at advantageous exchange rates. In addition the hotels will also charge a commission, to allow for any charges the bank may apply when the currency is deposited at bank.

Hotels which are dealing with foreign currency exchange, they have to take a VALID LICENCE FROM RESERVE BANK OF INDIA (RBI).It is compulsory for the hotel as per Law.RBI issues TWO TYPES OF LICENCES.

·         One for the purchase of foreign currency

·         Second licence for the sale of foreign currency.

A hotel with the purchase license can only able to purchase the foreign currency- (which means that the hotel may accept foreign currency from the guest for any bill settlement in hotel), but the refund amount of exceeding the billing amount will only be made in Indian currency)

Generally hotel get the permission and license for buying and selling foreign currency, it can buy and sell currency i:e accept foreign currency and give the balance amount also in foreign currency.

The Receptionist and cashier must be knowledgeable about  the foreign currency exchange procedures which are accepted by hotel and Exchange Value.

 

 

Foreign currency exchange procedures in guest Bill settlement:

The front office cashier is the hotels authorized representative for currency exchange dealing with guests. When guest willing to exchange the currency of their respective country, the following procedures has to be followed by cashier.

·         The guest contacts the front desk staff reception/cashier for foreign exchange.

·         The cashier must request the guest to produce their passport to verify the identity of 
the guest.

·         To enquire about the amount of foreign currency to be exchanged from the guest.

·     The cashier should determine whether the amount is exchangeable as per the RBI guidelines.

·         The cashier should be familiar with the EXCHANE RATES. The details may be collected from RBI or leading nationalised bank of the city.

·         Calculate the total amount of local currency to be paid by multiplying the foreign currency by the exchange rate.

·         A board is displayed in hotels near cashier counter about current exchange rates to provide information to guests.

·         Fill all details in foreign currency Encashment certificate and compare the signature of the guest with their passport.

·         The guest gives the foreign currency to the cashier in cash or travellers cheques.

·         Cashier should handover the amount along with the original currency encashment certificate. He attaches the second copy along with the foreign currency. Third copy with the hotel for future references

·         The cashier must fill the details of the transaction in control sheet.

·         Cahier must ensure that they return back the remaining balance if any to guest in local currency after bill settlement

 

Advantages of accepting foreign currency in hotels:

Ø  To generate foreign currency inflow in our country.

Ø  Can charge a commission and earn a profit by buying/selling rates.

Ø  Customer service provided to foreign tourist to exchange their currencies in hotel and for bill settlement.

Ø  No special equipment required to do such type of transactions

Ø  Only necessary documents are documents are filled

HOTEL ABC Foreign Currency Encashment Certificate

We hereby certify that we have purchased today foreign currency from Mr/Ms: ..................... holder of  passport No............ Nationality................. after adjusting the amount towards the settlement of bills for goods supplied/services rendered as per the details given below. A.     Details of foreign currency notes/coins/traveller’s cheque purchased

CURRENCY PURCHASED (Notes and TC Separately) AMOUNT EXCHANGE RATE RUPEES EQUIVALENT   B.     Details of adjustment made towards settlement of bills for goods supplied /services rendered BILL NO. DATE AMOUNT   C.     Net Amount Paid in Rupees.................Amount in Wards..................... (Total under A-Total under B)..............................................................

................................. (Authorised Signature) Name:.......................... Designation:................. NOTE: This certificate should be preserved by the holder to facilitate the re-conversion of the rupees balance from the amount dispersed in column C, at the time of departure from India, or to make payment in Indian currency for the services received.

 

 

EXPRESS CHECKOUT

As the name it suggests that it is speedy checkout system followed by front office staff. It is a facility given to the guest who avoid physically going to cashier’s desk at the time of their checkout for saving time and the guest who do not want to wait in long queue at the reception/cashier desk.

Express checkout facility given to those guest who wish to settle their bills through credit card

The receptionist should inform the guest about Express checkout facility to guest at the time guest arrival in hotel. Usually the front office desk will be busy in morning hours handling guest check in and checkout. Normally the procedure is time consuming and many guest waiting at cashier’s desk for settlement of bill.

To overcome these type of situation hotels have come out with a solution for speedy checkout which is called as EXPRESS CHECK OUT. This facility cannot be used for guests who wish to settle their bill by CASH ORBILL TO COMPANY.

The guest will be asked to fill up the Express check out (ECO) Form and a pre-departure folio. This ECO FORM is an authorization by the guest to the hotel authorities to charge their outstanding bills balance to his/her CREDIT CARD ACCOUNT. By signing the ECO FORM, guest agrees to pay the amount finalised by cashier after guest departure.

Express checkout procedures

The guest will be given Express checkout form on the morning of his/her date of departure

The guest will sign the ECO FORM and authorize the hotel to charge the outstanding balance to his credit card.

Guest can leave the hotel without having to wait or go through the standard checkout procedure.

The front office cashier prepares the final bill of the guest and mail a copy to the guest on their E-MAIL ID

 

 

The hotel sends the signed copy of ECO form and the CHARGE SLIP to credit card Company for the payment of guest bill.

Advantages of Express checkout

1. The guest need not come to reception counter .guest can checkout directly from room itself.
2. Cashier can work efficiently to reduce guest crowd during morning time checkout
3. Guest need not wait in long queue for bill settlement.
4. Very professional method of handling guest checkout
5. It saves time of the guest and hotel staff.

 

EXPRESS CHECK-OUT AGREEMENT Cashier please check me out of........... On.............at.................. Room#........ Departure Date.......Departure Time.... I authorise a charge to my credit card Account No. Imprinted on my Sales Draft for the amount of all costs incurred during my stay.(I promise to pay the total amount to the issuer of the card identified on this item upon presentation.) .................................................................................................Guest Signature Please send a copy of my hotel receipt and my credit card sales Draft(if applicable) to the address listed below, I also require a copy of this agreement.) Name............................................................. Check in date ...............check in time.............. Company......................................................... Street............................................................... City...........................Country............................. 4 copies

PLEASE REMEMBER Drop your express check-out card and room key into the express check-out box, near the reception counter . Or, hand them over to the bell-boy while leaving your room.  EXPRESS CHECK-OUT

 

 

Late checkouts

If a guest vacates his room after the checkout time mentioned in the Guest registration card is called late checkout. Most hotels have fixed checkout time-as generally 12-noon, before which the departing guest should vacate their rooms and settle their bills.

Late checkout may create problem to hotel during high occupancy time of room reservation. A confirmed reservation guest on the same day has to wait for the room due to guest late checkout. So such situation may create problem to hotel and also inconvenience to other guests.

 

The following procedures may be followed to overcome the problems:

1. All the guest must be informed about the hotel standard checkout time and late checkout charges as per hotel policies at the time of guest room reservation or check in time.
2. The information regarding checkout time and late checkout charges should be printed in guest key card, registration card.
3. Add the late checkout charges to guest bill.
4. Always request the guest to vacate the room as per the checkout time.
5. Receptionist can confirm guest checkout one day well in advance to void any disputes.
6. If the rooms are fully occupied then inform the guest in a polite manner to vacate the room
7. During off season hotel extend full cooperation to guest in vacating the room (in some hotels they don’t charge for extra 2 to 4 hours of duration of stay.

Problems faced by hotels due to late checkout

• Rooms are not vacated by guest as per checkout time mentioned by guest in Guest registration card.
• Loss of revenue because some guest unwilling to pay for extra hours room rent.
• Rooms not are ready on time for next guest who holds confirmed reservation.
• Difficult in maintaining room status.
• It becomes inconvenience to check in guest who is going to arrive.
• Housekeeping staff find difficulty in cleaning the late checkout rooms.

 

Front Office accounting Fundamentals

Front Office accounting Fundamentals

FRONT OFFICE ACCOUNTING FUNDAMENTALS

An effective guest accounting system consists of task performed during each stage of guest cycle. During the pre-arrival stage, a guest accounting system captures data related to the type of reservation guarantee and tracks prepayments and advance deposits. When a guest arrives at the front desk the guest accounting system documents the application of room rate and tax at the registration. During stay a guest accounting system tracks authorized guest purchases. Finally, a guest accounting system ensures payment for outstanding goods and services at the time of check-out.

In brief, a front office accounting system:

·        Creates and maintains an accurate accounting record for each guest or non-guest account

·        Tracks financial transaction throughout the guest cycle

·        Ensures internal control over cash and non-cash transactions

·        Records settlement for all goods and services provided

Given below is a brief review of some general concepts of front office accounting:

Accounts

An account is a form on which financial data are accumulated and summarized. An account may be imagined as a bin or container that stores the results of various business transactions. The increases and decreases in an account are calculated and the resulting monetary amount is the account balance. Any financial transaction that occurs in a hotel may affect several accounts.

In its simplest form, an account resembles the letter T and therefore this system is known as T- form of accounting .Charges are increases in the account balance and are entered on the left side of the T which is known as the debit side. Payments are decreases in the account balance which is entered on the right side of the T and is known as the credit side.

Guest Accounts : A guest account is a record of financial transactions which occur between a guest and the hotel. Guest accounts are created when guests guarantee their reservations or when they register at the front desk. The front office usually seeks payment for any outstanding guest account balances during the settlement stage of the guest cycle.

Non-Guest Accounts: A hotel may extend charge privileges to local businesses or agencies as a means of promotion, or to groups conducting meetings, conferences at the hotel. The front office creates non-guest accounts to track these transactions. These accounts may also be called house accounts or city accounts.

Folios 

Front office transactions are typically charted on account statements called folios. A folio is a statement of all transactions (debits and credits) affecting the balance of a single account. When an account is created, it is assigned a folio with a starting balance of Zero. All transactions which increase (debits) or decrease (credits) the balance of the account are recorded on the folio. At settlement, a guest folio should be returned to a zero balance by cash payment or by transfer to an approved credit card or bill to company account.

The process of recording transactions on a folio is called posting.

There are basically four types of folio:

1)     Guest Folio: Accounts assigned to individual persons  staying in the hotel.

2)     Master Folio: Accounts assigned to more than one person or guest room, usually reserved for group accounts.

3)     Non-guest Folio: Accounts assigned to non-guest businesses or agencies with charge purchase privileges.

4)     Employee Folio: Accounts assigned to employees with charge purchase privileges.

Additional types of folios are frequently created by front office management to accommodate special circumstances or requests. For example, a business guest may request that his charges be split between two separate folios, one to record all Room charges, F & B charges and Laundry expenses and another one to record rest of the expenses. Main folio is usually called ‘A’ folio and the second one is called incidental folio.

Every folio should have a unique serial number. First, they serve as unique identification numbers for control purpose and they are also used for indexing purpose.

Vouchers       

A voucher details a transaction to be posted to a front office account..This document lists detailed transaction information gathered at the source of transaction, such as the hotel coffee shop or Bar. The front desk cashier is required to present supporting documents of all the financial transactions recorded in the guest folio. A voucher-which entitles the bearer to certain goods, services, or discounts upon presentation- is a documentary evidence of a financial transaction. For every purchase, the point of sale presents the bill to the guest, receives cash from the guest, and gives a cash receipt to the guest. In case a charge purchase is made , the guest signs the bill and the same is sent to the front desk for posting it into the guest account; the same is given to the guest at the time of check-out.

The types of vouchers commonly used in hotels are as follows :

·        Charge Voucher

·        Visitor’s paid out

·        Cash receipt voucher

·        Allowance/ Correction voucher

·        Transfer Voucher

·        Travel agent voucher

·        Miscellaneous charge voucher

                                       

                                                   

Creation and Maintenance of Accounts

The task of accurately and correctly recording all transactions that affect guest ledger accounts is the responsibility of the front office. Guest folios are created during the reservation process or at the time of registration.  To prepare a folio for use, information from the guest’s reservation or registration record must be transferred to the folio.  Non automated systems commonly used pre-numbered folios for internal control purposes.  Manually posted guest folio cards are stored in a front desk folio tray which is also referred as a bucket. 

In a fully automated system, guest information is automatically transferred from an electronic reservation record or captured at registration and entered into an electronic folio.  One of the major advantages of electronic data processing is that captured data need only be handled once.  By only having to handle data once, an automated system can significantly reduce errors caused by repetitive data handling. 

Charge Privileges:     To establish an in-house line of credit, a guest may be required to present an acceptable credit card or a direct billing authorization at the time of registration.  Charge privilege implies that a guest is allowed credit facility in the hotel.  This may also happen when guest is regular in the hotel or source of reservation is reliable.  Guests with charge privilege are authorized to make charge purchases and these transactions are communicated manually by vouchers or electronically from remote POS locations to the front desk.  Guest who are not extended charge privileges need to pay an advance deposit for accommodations and they are typically called paid-in-advance or PIA guests.  In a fully automated front office accounting system, such accounts are set to a NO POST status.  This means that revenue center cashiers will not be able to post charges to a guest whose account has a no post status.  In a non automated system, a PIA list is manually distributed to all revenue centers. 

Credit Monitoring:     The front office must monitor guest accounts to ensure they remain within acceptable credit limits.  Generally hotels decide an internal credit limit for all guests to whom charge privileges are extended.  Hotel’s internal limit of credit is known as House Limit.

Front office must keep a track of all accounts approaching the house limit.  Such accounts are known as High Balance accounts.  Guests with high balance accounts must be requested to make a partial payment to reduce the outstanding account balance.  In larger hotels, there may be a full time credit manager to review high balance accounts.  In small hotels this responsibility is given either to the front desk manager or to the accounting division. 

Account Maintenance:          A folio is used to record transactions which affect a front office account balance.  Guest folios must be accurate, complete and properly filed since guests may inquire about their account balance or checkout of the hotel with little or no advance notice.  Transaction postings adhere to a basic front office accounting formula.  The accounting formula is :

Previous balance + debits – credits = net outstanding balance

Tracking Transactions

A transaction initiates activity within the front office accounting system.  From an accounting perspective, nothing happens until a transaction occurs. Each type of transaction will have a different effect on the front office accounting system.  Each transaction is communicated to the front office through the use of different types of vouchers.   A transaction can be classified as

1. Cash payment:  Cash payments made at the front desk to reduce a guest’s net outstanding balance are posted as credits, thereby decreasing the balance of the account.  The front office uses a cash voucher/ cash receipt to support such transactions. 
2. Charge purchase:  Charge purchase represent deferred payment transactions.  The guest receives goods and services from the hotel but does not pay for them at the time they are provided.  A charge purchase increases the outstanding balance of a folio.  A charge voucher also known as account receivable voucher is prepared to document charge transactions.  Charge purchase is basically a credit purchase by the guest and charge vouchers are handed over to the guest at the time of check out.
3. Account correction:  It resolves a posting error on the folio.  By definition, correction is made on the same day the error is made, that is, before night audit.  Account correction can either increase or decrease the balance, depending on the error.  A correction voucher is used to document an account correction. 
4. Account allowance:  It involves two types of transactions.  One type of transaction is when an error in posting is detected after the night audit.  Another type is a decrease in a folio balance for such purposes as compensation for poor service or discounts given for dissatisfactory product or service.  An allowance is prepared which usually requires management approval.
5. Account Transfer:  It tends to involve two different accounts and have an off-setting impact on subsequent account balances.  For eg. when one guest offers to pay a charge posted to another guest’s folio, the charge will need to be transferred from the first account to a second account.  A transfer voucher supports this transaction.
6. Paid out:  The difference between a paid out and other types of transactions are that, paid out reflects cash flow out of the hotel, either directly or on behalf of the guest.  These transactions are considered debit transactions, since they increase a folio’s outstanding balance.  For eg, a guest may request the delivery of flowers and the front office at the time of accepting the delivery pay for the flowers as the guest most likely will not leave the money at the front desk for this purpose.  Payment by the front office constitutes a cash advance on the guest’s behalf.  The front office may pay for the delivery on the presumption that the guest will reimburse the front office.  

Internal control

Internal control in the front office involves:

§  Tracking transaction documentation

§  Verifying account entries and balances

§  Identifying vulnerabilities in the accounting system

Auditing is the process of verifying front office accounting records for accuracy and completeness. Each financial interaction produces paperwork which documents the nature and amount of the transaction. For example, consider the transaction that occurs when a guest charges a meal to his individual folio. This transaction will likely be supported by the restaurant’s guest check, cash register recording, and charge voucher. The charge voucher is prepared at POS and sent to the front office as notification of transaction. In a semi-automated front office a front desk agent, in turn, retrieves the guest’s folio , posts the charge purchase transaction, refiles the  guest folio , and files the charge voucher. Later that day, the front office auditor ensures that all vouchers sent to the front office have been properly posted to the correct accounts. In the case of  this example , the auditor will match the front office total of charges from the dining room to the total reported by the dining room. Discrepancies  in accounting procedures are easy to resolve when complete documentation is readily available to substantiate account entries.

Front office cash sheet

The front office is responsible for a variety of cash transactions which may affect both guest and non-guest accounts. Proper cash handling procedures and controls must be established, implemented and enforced.

Most non-automated or semi-automated operations require front office cashiers to complete a front office cash sheet that lists each receipt or disbursement of cash. The information contained on a front office cash sheet is used to reconcile cash on hand at the end of a cashier shift with the documented transaction which occurred during the shift. A front office cash sheet provides separate columns to record transactions affecting guest accounts, non-guest accounts , and miscellaneous transactions.

The most common entry on a front office cash sheet is the money collected from departing guests during check-out. When guests pay on their accounts , the cashier typically records the amount paid ,the room number ,and the folio number on the front office cash sheet.

The front office cash sheet also provides space for itemizing cash disbursements or paid outs. These are the transactions when front office pays on behalf of the guest. Since the amount of cash on hand at the front desk will be lowered by the amount paid to the recipient , the front office accounting system must be capable of tracking this type of transaction.

Audit Controls:  

A number of front office audit controls ensure that front office staff  properly handle cash, guest accounts, and non- guest accounts. Publicly held lodging companies are required to have their accounting records audited yearly by independent certified public accounts. In addition, companies may have their own internal auditors for control purpose. In both the cases a report is prepared for ownership and management.

Cash bank: 

Cash bank is also known as float or imprest.  It is an amount of cash assigned to a cashier so that he can handle the transactions that occur during a particular work- shift.  Good control procedure generally require that cashiers sign for their bank at the beginning of their work-shift  and that only the person who signed for the bank have access to it during the shift.  At the end of a shift, each front office cashier is solely responsible for depositing all cash [including foreign currency] and all negotiable instruments [such as paid out vouchers] in a specially designed front office cash envelope.  The cashier normally records the contents of the front office cash envelope on the outside of the envelope before dropping it into the vault.  From an internal control perspective, at least one other employee should witness this procedure and both of the employees should sign a log attesting the drop was actually done and stating the time of the drop.

Monitory differences between the money placed in the front office cash envelope and the cashier’s net cash receipts should be noted on the envelope as overages, shortages or due banks [ also known as due backs].

An overage occurs when after the initial bank is removed, the total of cash and negotiable instruments in the drawer is greater than the net cash received.  A shortage occurs when the total of the contents of the drawer is less than the cash receipts.  A due-bank occurs when a cashier pays out more than his bank and he does not have enough cash in the drawer for the cash drop.  They are generally unusual in the front office. 

Bank is restored to its original value at a fixed time during the day by the general accounts department. 

Check-Out Options

Changes in technology and guest needs have prompted front offices to develop alternatives to standard check out and account settlement procedures.  These options combine advances in technology with special guest services to expedite departure activities. 

Express Check out:                 Guests may encounter long lines at the front desk when trying to check out during prime check out period.  To ease front desk volume some front offices initiate check out activities before the guest is actually ready to leave.  A common pre departure activity involves producing and distributing guest folios to the guest expected to check out.  Front office staff may quietly slip printed folios under the guest room doors of expected check outs, making sure that the guest’s folio cannot be seen or reached from outside the room.  In this process, guest must an express check out form at the time of registration or during his stay.  Express check out is possible only if the guest is settling is his bill using his credit card.  By completing an express check out form, guest authorizes the front office to transfer his outstanding folio balance to his credit card account/credit card charge slip which was created during registration.  Such guests after verifying their folio may just sign it and leave it at the front desk before departing from the hotel.  After the guest has left, the front office completes the guest’s check out by transferring the outstanding guest folio balance to a previously authorized method of settlement.  Any additional charges the guest makes before leaving the hotel will be added to his folio.  Due to these possible late charges, the amount on guest folio may not equal the amount charged to the guest on his credit card account.  This possibility should be clearly stated on the express check out form to minimize later confusion. 

Self Check Out:   In some hotels, guests can check themselves out of the hotel by accessing self check out terminals in the lobby area or by using an in-room system.  Self check out terminals or in-room systems are connected with the front office computer and are intended to reduce check out time and front desk traffic.  Self check out terminals vary in design.  Some resemble ATM machines, while others possess video and audio qualities. 

To use a self check out terminal the guest accesses the proper folio and reviews its contents.  Guests may be required to enter a credit card number by using a keypad or by swiping the credit card through a magnetic strip reader attached to the terminal.  Settlement can be automatically assigned to an acceptable credit card and a zero balance folio gets printed out.  A self check out system should then automatically communicate updated room status information to the front office department.  The front office system, in turn, relays room status information to the house keeping department and initiates action to create a guest history record. 

In-room folio review and check out usually relies on the television set provided in the room with a remote control.  The guest can confirm a previously approved method of settlement to the in-room television which is connected via computer to the front office.  The front office computer directs the self check out process.  Guests can pick up a printed folio copy at the front desk on their way out.  Another advantage of this system is that guests can look at their folios at any time during their stay without having to stop by the front desk.