question

Account Receivable

answer

a customer who owes a business for services that have not been paid.

question

Folio

answer

the bill containing the account of a guest.

question

Hotels have two types of customers:

answer

Transient guests, City guests

question

Transient Guests

answer

those currently registered and occupying rooms.

question

City Guests

answer

persons or organizations that OWE the hotel, but are NOT currently staying at the hotel.

question

Types of Accounts Receivable:

answer

The Ledger, What is and isn't accounted for

question

The Ledger, and types of ledgers:

answer

an accounting book, that contains a set of accounts. Transient/Front Office/Guest/Rooms Ledger, and City Ledger.

question

Transient/Front Office/Guest/Rooms Ledger

answer

where the folios of the current registered guests are kept. - it is maintained at the front desk - charges are "posted continually, as incurred by guests - bill is presented to the guest on departure

question

City Ledger

answer

where the folios of non-registered guests/organizations are - it is maintained in the accounting office - charges are posted periodically and bill is presented for payment periodically

question

What is and isn't accounted for

answer

guests pay cash directly, no "accounts receivable" is created.

question

Folio/Bill/Guest Bill/Guest Account/Visitors Account

answer

the individual account receivable.

question

Folio/Bill/Guest Bill/Guest Account/Visitors Account Location:

answer

kept at: - front office (FO) in paper form in manual systems - in memory of the computer system and printed on demand at the front office in a computerized system

question

Number of folios:

answer

- one per room is MOST COMMON - one per guest when rooms are shared - one per many rooms if one guest is paying.

question

Master Accounts

answer

used for single-entity groups for common charges, NOT billable to individuals.

question

Split Billing

answer

distribution of charges between a Master Account/Folio (A FOLIO) and a guest's personal folio (B FOLIO)

question

Casino Comps

answer

posted to A Folio, others to B Folio

question

Preferred-guest Programs

answer

room rate to A Folio, others to B

question

Charges/Debits

answer

Charges incurred by the guest that increase the amount owed

question

Credits

answer

payments made by the guest that reduce the amount owed; credit cards, or TRANSFER to City Ledger by signature to an authorized account.

question

Assets

answer

something a business OWNS - Cash, accounts receivable - Increase in incomes are made with credits (sale of room, food, beverages - Decrease in incomes made with debits

question

Liabilities

answer

something a business OWES - Accounts payable (salaries to be paid at the end of the month

question

Equality of debits and credits

answer

main principle of dual-entry bookkeeping that every debit should be matched with an equal dollar amount credit

question

Allowance/Adjustment

answer

same meanings, but "allowance" is used more. Allowance: reduction in the guest's bill; Stores give you a partial or full refund (credit), if you return your purchase for an error, etc.

question

Preparation of the Folio

answer

folio is created when the guest arrives and registers, may be pre-printed if computerized

question

Filing the folio

answer

- electronic folios are in computer memory and printed on demand - manual folios are filed sequentially by room number at the front office in CASHIERS WELL OR PIT OR BUCKET

question

Presenting the bill

answer

- credit is a PRIVILEDGE, hotelier has the right to demand pre-payment - bills are presented normally on departure - bills may be presented weekly, or when credit limit is reached

question

Before Electronics Communications

answer

bellboys, runners, waiters used to physically carry VOUCHERS (lost, delayed, misplaced in the process which resulted in difficult to collect LATE CHARGES) - pneumatic tubes used in larger properties (like drive-thru banks) - need to prepare department control sheet at POS (point of sale)

question

Communications WITH electronic systems

answer

POS systems integrated into Property Management Systems (PMS)

question

POS

answer

Point of Sale system

question

PMS

answer

Property Management Systems

question

Three means of setting accounts:

answer

- Cash - Credit - Allowance

question

Allowances are given for:

answer

Comp Allowances, Allowance for poor service, Allowances to correct errors, Extended-Stay allowance

question

Comp Allowances

answer

when the whole bill or some items are given free or "COMPED"

question

Allowances for poor service

answer

discount given for poor service, bad or delayed food/drinks, etc.

question

Allowances to correct errors

answer

mathematical errors, "I never made that call/saw that in-room movie", etc.

question

Extended-Stay allowance

answer

discount given as a condition of extended stay. Full rate is charged and allowance given at the end.

question

Recording the allowance

answer

a supporting "ALLOWANCE VOUCHER" should be made, and approved by a manager; daily allowance report needed

question

Transfer

answer

an accounting technique that moves a figure from one folio/account to another; one account is credited, the other debited by the same account

question

Folio formats

answer

debits and credits may be indicated by "+" or "-" signs, CR used to designate credits, separate columns used

question

Types of transfer:

answer

Transient to Transient Ledger, City to Transient Ledger, Transient to City Ledger: Credit Cards, Transient to City Ledger: Direct

question

Transient Ledger to Transient Ledger

answer

one guest folio balance is transferred to another

question

City Ledger to Transient Ledger

answer

Advance Deposits; Credit balance of guest paying in advance is transferred from City ledger to their guest folio on registration

question

Transient Ledger to City Ledger: Credit Cards

answer

MOST COMMON; used when guest pays by credit card (Folio balance of the guest is transferred to the folio of credit card company in the city ledger

question

Transient Ledger to City Ledger: Direct

answer

Folio balance of guest is transferred to an AUTHORIZED individual/corporate/organizational account

question

Skipper

answer

guest leaves without payment

question

**Pics of Folios in Ch. 10 slides

answer

Computerized Guest Bill (Folio), Manual Folio, Computerized Folio, Department Control Sheet, Allowance Voucher. **END OF CHAPTER 10**

question

Cash Paid Outs

answer

cash is taken out of front office cash and "paid out" to someone (employee, guest, vendor, manager, etc.)

question

Tips to employees

answer

MOST COMMON form of cash "paid out" at front office, float losses, merchant discount fee, non-collectible accounts, another look at the employee tips

question

Float Losses

answer

hotel gets money later, pays employee up-front

question

Merchant discount fee

answer

hotel has to pay fee to VISA or AMEX, but does not reduce tip

question

Non-collectible accounts

answer

if the bill is not paid, hotel cannot recover tip already paid out

question

Cash Loans

answer

a loan given to a guest from front office cash, common earlier for taxi fare, similar small amounts (not a good idea for large amounts, and rare with ATMs and credit cards), third party sources of cash, ATMs (automatic teller machines!), ATMs in hotel lobbies (source of revenue for hotel as ATM company pays a fee

question

Paid outs to concessionaries

answer

hotel pays dry-cleaner or hairdresser and charges it to guest account as a "paid out", guest pays on departure

question

Refunds at check-out

answer

if the guest paid a large advance up-front and has money left over, they are refunded as a "paid out" ($100 limit or so in cash to avoid fraud)

question

Cash receipts at the front office

answer

when cash is received by the front office as payment

question

Cash receipts at check-out

answer

when guest pays their bill in cash on departure (rare these days with direct billing and credit cards)

question

Cash receipts "on-account"

answer

when a guest makes a PARTIAL payment against their final bill; may be ASKED to pay as a credit-control procedure, guest may WANT to pay to avoid carrying cash, to avoid delay due to anticipated very early check-out, etc.

question

Cash receipts at check-in

answer

"cash-only" guests may be asked to pay in-full, in cash, up-front; all departments should be notified about "cash-only" status

question

Reservation deposit Receipts

answer

when a guest pays cash in advance at the point of reservation; normally transferred to City Ledger and re-transferred to Guest Folio on arrival.

question

Assorted City and General Ledger Receipts

answer

in smaller properties all incoming cash is funneled through the front office cash system

question

Assorted House Paid Outs

answer

- when cash is disbursed from the front office for the expenses of the hotel ("house") - the imprest petty cash fund - a fund maintained by the front office cashier for small house expenses like stamps, local produce, etc.; reconciled and "bought out" by accounting department periodically

question

Petty Cash Couchers

answer

used to support transactions

question

The Cashier's Bank

answer

a permanent supply of cash received by the front office cashier for daily use (ranges from $250-$1000, audited regularly, individual banks for individual cashiers, cover all cash handling employees with a "bond")

question

Net Receipts

answer

the difference between money taken in and paid out TOTAL RECEIPTS - TOTAL PAYMENTS = NET RECEIPTS

question

Over or Short

answer

difference between "what should be" and "what is"; differences due to errors, over/under payments, fraud

question

"What should be"

answer

cash according to accounts

question

"What is"

answer

actual cash in dollars and cents in the cash drawer

question

"Over"

answer

more money in cash drawer than should be

question

"Short"

answer

less money in cash drawer than should be

question

The Turn-in

answer

cashier turns in the actual cash, along with the Cashiers Report, accounting for "over" and "short"; cashier turns in the actual cash and an auditor does the accounts.

question

The Income Audit

answer

a checking of accounts done EVERY MORNING to verify accuracy of cash transactions and to prepare bank deposit for the day

question

Due Bank

answer

when more money is paid out than comes in and the cashier uses his "bank" for that payment

question

Paying off (Refunding) the due bank

answer

the bank has to be re-built to the stipulated amount by giving cash back to the cashier

question

Paying off (Refunding) House Vouchers

answer

the accounting departments "buys out" the house putty cash vouchers with real cash, so the cash drawer is accurate

question

Tour Package Coupons

answer

coupons used by members of tour groups to "pay" for meals etc. (accounted for like regular cash)

question

Foreign Currency

answer

*NORMALLY NOT ACCEPTED IN US HOTELS, some hotels provide money-changing facilities at front office, the EMU "EURO", in general, credit card and ATM usage has reduced currency exchange world-wide.

question

Credit cards became big when:

answer

in 1950 with the founding of Diners Club

question

Hotel chains started issuing their own credit cards, but dropped the idea later due to:

answer

increasing acceptance of general cards

question

Four major credit cards

answer

Visa, Mastercard, American Express, Discover

question

Visa's contribution

answer

national educational program concentrating on reservations and no-shows

question

MasterCard supports

answer

the Education Institute of the American Hotel and Lodging Association (AH&LA)

question

MasterCard's major trust is

answer

developing service skills at the front desk

question

American Express partners with

answer

the AH&LA in legislative affairs and contributes regularly to the American Hotel Foundation

question

Discover's national contribution

answer

is yet unclear, but it is forming strong single-company relationships

question

All credit-card companies

answer

participate in the lodging industry's regional and national meetings.

question

Kinds of Credit Cards

answer

Bank Card, Travel and Entertainment Card (T&Es), Private Label Card, Co-branded or Affinity Card

question

Bank Cards

answer

issued by banks, VISA & MasterCard; Customers get credit and can pay in monthly installments with interest; banks make money from annual fees, merchant fees, interest; customers get convenience, "float" and flexibility in spending

question

T&Es

answer

Travel and Entertainment Cards; issued by AMEX, Diners Club with strict credit checks; no credit, bill is to be paid in fulle ach month; AMEX makes money by card fees and merchant fees (both high!); Some merchants do not accept AMEX as a result

question

Private Label Cards

answer

Gas company, department stores, etc. issuing their own cards; due to limited use, they are slowly disappearing away!

question

Co-branded or Affinity Cards

answer

VISA or MasterCart affiliated to an organization, ex: UNT; a small percentage goes to the organization

question

How the system works

answer

Customers get convenience, float, credit, security; merchants get additional business, less cash handling costs and headaches; banks get annual fees and interest from customers, and fees from merchants (1% to 5%)

question

Other Cards:

answer

Debit Cards, Smart Cards

question

Debit Cards

answer

transfer funds instantly from customer's bank account; no float for customer, less fees for merchants

question

Smart Cards

answer

credit cards with memory chips that can store other information; ex: ID, medical info, insurance info, etc.

question

Other City Ledger Categories

answer

Master Accouts, Groups, Packages, and Company Sponsored Functions, Individual City-Ledger Receivables

question

Master Accounts

answer

Accumulate charges for groups

question

Four common errors that irritate meeting planners

answer

split billing, unauthorized signatures, the sequence of posting, comp rooms

question

Groups, Packages, and Company Sponsored Functions

answer

split folios

question

Split Folios

answer

major items, such as VIP rooms and group meals are posted in the A folio, the master account, for which the entity pays; personal incidentals are charged to the B folios and paid as the individual guests check-out

question

Individual City-Ledger Receivables

answer

Travel Agencies, Miscellaneous Charge Order, Banquet Charges, Late Charges, Delinquent Accounts, Executive Accounts, Due bills/Trade Advertising Contracts/Trade-outs/Reciprocal Trade Agreements, Frequent-Guest Programs (Loyalty Programs)

question

Travel Agencies

answer

travel agency can become an account receivable in the city ledger when guest pays the first night's room charge with the travel agency's coupon

question

*MCO

answer

Miscellaneous Charge Order: standardized voucher issued by an airline, authorizing the holder to utilize hotel services; hotel collects the MCO from the guests and bills the airlines

question

Banquet Charges

answer

an open account created by a catered party in the hotel, that a guest pays after-the-fact; credit cards are increasingly replacing this

question

Late Charges

answer

charges that appear onthe folio after the guest has checked out; may be "written off" as un-collectible if amount is too small to pursue

question

Delinquent Accounts

answer

accounts that have not been paid in a long time; may be transferred to "bad debts" account and "written off" if found to be uncollectable

question

Executive Accounts

answer

personal account of Managers in the hotel; may receive discounts for hotel services; need to distinguish "personal" and official entertainment

question

Due bills/trade advertising contracts/trade-outs/reciprocal trade agreements

answer

hotels trade their room nights for other services like newspaper or TV advertising; voucher issued by the hotel is often traded like real money; the guests presents the Due Bill on check-in for payment

question

Frequent Guest Programs (Loyalty Programs)

answer

hotel company is billed for the room rate on the A folio; guest is billed for other personal charges on B folio

question

Managing Cash

answer

Courterfeit or Fake Currency: hotels are targets (front office is busy and easy to cheat); train cashiers to detect fake currency; can buy devices to detect fake bills

question

Managing Check

answer

check cashing safeguards; traveler's checks

question

Check Cashing Safeguards

answer

do not accept checks, use a check clearing service like Tele-check, train employees in detecting fraudulent checks

question

Traveler's Checks

answer

issued by AMEX and other issuers; as good as cash; cashed with verifying signature; train employees in proper procedures, fraud detection; be careful about Canadian/Australian/other dollars

question

Managing Credit

answer

Cost-Benefit Decision; Components of Credit Management; The Management Function; Managing the Specifics

question

Cost-Benefit Decision

answer

if you do not extend credit you will have NO losses due to "bad debts", skippers, etc.; you will also miss out on good business that was turned or scared away by rigid credit policies

question

Components of Credit Management

answer

Having reasonable credit policies and procedures, CONTINUALLY monitoring credit standing of all accounts, following up promptly on accounts due to the hotel

question

The Management Function

answer

Extending Credit; less of an issue with growing use of credit cards; shift risk to credit card company; ask guests without credit cards or "suspicious" guests to pay cash in advance

question

Managing the Specifics

answer

Chargebacks: when credit card company refuses to pay the bill, guest refuses to pay, hotel did not follow card company procedures; Minimizing chargebacks: communicating charges/fees clearly to guest, avoiding "late charges" by better training and good systems, training employees in following correct procedures *END OF CHAPTER 11

question

Night Auditor Work Shift

answer

Graveyard: 11/12a - 7/8a; required to remain, until the job is completed, relieves the "swing shift" and is relieved by the "day shift"

question

Night Auditor General Duties

answer

night audit PLUS nigh manager duties in smaller hotels (security, front office, housekeeping, maintenance, etc. (just auditing in larger hotels)

question

The Audit

answer

reconciling accounts receivable, closeout hour

question

Reconciling Accounts Receivable

answer

all businesses need to reconcile accounts PERIODICALLY; hotels need to do it DAILY

question

The Closeout Hour

answer

hotels never close, so a time needs to be picked to "close" (one days accounts are closed and the next days accounts begin; most hotels choose midnight; can be done later, if food and beverage outlets are open later; later closing puts pressure on night auditors but it accounts better for sales of outlets for the "day"

question

Posting Room Charges

answer

manually, electronically, not by the auditor

question

Posting Room Charges Manually

answer

each folio has to be taken out of the "pit" and room and tax charges are entered manually, room by room; days charges are totaled, and "brought forward" to get a cumulative running total; manual system errors

question

Posting Room Charges Electronically

answer

room and tax for ALL room is posted at the press of one button instantaneously; totals updated automatically and a summary made; NO math or entry errors

question

Room Charges Not Posted By the Auditor

answer

Day rate, use rate, part day rate guests; extra room charge for late check outs

question

Verifying Basic Data

answer

closing routine, express check-out, PMS posting errors

question

Closing Routine

answer

press of one button does ALL steps of the manual night audit; need to tally department totals with front office totals ONLY IF POS systems are NOT interfaced with PMS system; reports and print-out of folios generated automatically

question

Express Check-out

answer

printed folio is put under guest room door late at night and amount is charged to credit card, guest comes to front office for check-out ONLY if there is a problem; similar procedure can be done with in-room TV; if guest needs a copy of bill, it can be maield

question

PMS Posting Errors

answer

errors still possible; mostly entry errors from cashiers; system reduces errors by "rejecting" wrong entries; can be systematic errors due to bugs in the system

question

Reports from the Night Audit

answer

turnkey systems; exception reports; downtime reports; credit reports; reservation reports; rooms management reports; room status reports; accounts receivable reports

question

Turnkey Systems

answer

a STANDARDIZED system installed by a vendor that the user simply "turns the key" to start (as opposed to designing a system from scratch)

question

Main Benefits of Turnkey Systems

answer

hardware and software work together; system is consistent across the chain

question

Exception Reports

answer

highlights only exceptions from the norm; lists only those over credit limit as opposed to each guest

question

Downtime Reports

answer

Print outs of CORE information in case of system breakdown

question

Credit Reports

answer

credit status of "problem" guests

question

Reservation Reports

answer

report of rooms sold, un-sold, sold-by, demanded, refused, walked, projected occupancy, etc.

question

Rooms Management Reports

answer

list of guests, rates, convention member VIP, etc.

question

Room Status Reports

answer

list of occupied, vacant, OOO, OOI rooms, etc.

question

Accounts Receivable Reports

answer

Lists details of City Ledger, Credit Card transactions, departmental totals, etc.

question

Report to the Mnaager

answer

report of key issues of the previous day; room count, house count, room income (reported daily and accounted for); room statistics (rooms sold, ADR, occupancy %, comps, RevPar are reported daily)

question

Summary

answer

PMS allows night audit to be a REAL management tool, rathe rthan an accounting procedure to catch mistakes quickly! *END CHAPTER 12

HMGT 3700: Test 4a, CH: 10-12 – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards