Front Office Accounting

                       FRONT OFFICE ACCOUNTING

Need for accounting system at Front Office -

To monitor and chart all the transactions that take place between the hotel and others i.e. resident guests,

companies, agencies, non-resident guests etc.

ACCOUNTING FUNDAMENTALS

- the functions of Front Office Accounting System are:

01. To create and maintain an accurate accounting record for each guest/ non-guest account.

02. To track financial transactions throughout the guest cycle.

03. To ensure internal control over cash & non-cash transactions.

04. To record settlement for all goods & services provided.

Note : Guest means Resident guest and Non-guests means Non-resident guest,.

Accounts:

An account is a form on which financial data are accumulated and summarized. 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.

The simplest form an account resembles the letter T –

In Front Office, accounts are segregated into two categories.

a. Guest Account – is a record of financial transactions that occur between a guest and the hotel.

Created - a. during registration, b. when reservations are guaranteed.

_

Front Office is completely responsible for it during guest occupancy.

Updated on a daily basis.

Settlement - a. on guest checkout, b. when the account exceeds credit limit.

b. Non-guest Account - Between a non-guest and the hotel.

Also called as House accounts/ City accounts

Accounts of guests failing to settle their bills on departure are also included in this (besides those of non-residents like companies, agencies, groups or individuals with credit privileges)

Collection & billing is the responsibility of Accounts Department! Credit (Control) Department.Billed on monthly basis.

Folios:

- a statement of transactions (debits and credits) affecting the balance of a single account.

- it begins with a ZERO balance and ends with the SAME. In between, the balance may be debit or credit depending upon the type of transactions.

Posting:

- it is the process of recording transactions on a folio. Methods of posting are as under:

a. Non-automated system: Hand-written on a Paper Folio.

b. Semi-automated system: Machine posted on a Paper Folio

c. Automated system: Electronic Folios are maintained on a Computer.

Types of Folio:

- basically 4 types of folios –

a.    Guest Folio- accounts assigned to individual persons or guest rooms.

b.    Master Folio- for more than one person/ guestroom. Usually for Group Accounts.

c. Non-guest or Semi-permanent Folio: for non-guest businesses/ agencies with charge

purchase privileges.

d. Employee Folio: for employees with charge purchase privileges.

There are more folios created by hotels to accommodate special circumstances/ requests e.g. room folio (A  folio) for Room+Tax and incidental folio (B folio) for food/ beverages and other charges.

Why all folios must have a unique serial number?

01. It acts as an identification number & ensures that all the folios are accounted for.

02. Folio numbered may be used to index information in automated systems.

03. In semi-/non-automated system, folio lengths are fixed. When a balance is carried forward to a

new folio, the old folio number has to be shown as reference of where the balance originated.

Vouchers:

- a voucher details the transactions to be posted to a front office account.

- it lists the detailed transaction information gathered at the source of transaction, such as any F & B

outlet, gift shop.

Types of vouchers:

1. Cash Voucher

2. Charge Vouchers

3. Transfer Vouchers

4. Allowance Vouchers

5. Paid-out Vouchers

Ledger:

- is a summary grouping of accounts.

- In Front Office, called as Accounts Receivable Ledger (a collection of folios).

Guest ledger:

- the set of guest accounts that correspond to registered hotel guests.

- also called as Transient Ledger or Rooms Ledger or Front Office Ledger.

Non-Guest Ledger:

- it is the collection of non-guest accounts.

- it includes all non-cash settlements, skipper accounts, disputed bills & non-guest functions.

CREATION & MAINTENANCE OF ACCOUNTS

- it is the responsibility of Front Office to record all transactions that affect guest-ledger and non-guest

accounts accurately and completely.

- Guest folios are created during reservations process or at the time of registration.

- for Folio creation, the necessary information is taken from reservation & registration records.

- for pre-numbered folios, the folio number is entered on to the registration card and vice-versa for

cross-referencing.

- Manually-/ machine-posted folios are stored in a front desk folio tray (also known as posting tray/

folio well/ buckets).

- electronic Folios are automatically cross-referenced with other records within the system. This

considerably reduces transactional accounting errors.

Record keeping Systems:

- the folio formats of guest and non-guest account may be different and depends on the record keeping

system:

a. Non-automated system:

- Guest folio in a manual system contains a series of columns listing individual debit/ credit entries

accumulated during the occupancy.

- at the end of the financial day, each column is totalled and the ending balance is carried forward as the

opening folio balance for the following day.

b. Semi-automated system:

- Guest transactions are sequentially printed on a machine posted folio.

- The information recorded for each transaction includes the date, department code/ check no., amount

of transaction and the new balance of the account.

c. Automated system:

- Electronic folios are maintained on the computers.

- POS transactions may be automatically posted to an electronic folio.

- Computer based systems maintain accurate current balances for all the folios.

Charge Privilege:

- The privilege given to a guest to avail hotel facilities on credit basis.

- A guest may be required to present an acceptable credit card or a direct billing authorization at the time

of registration ( or at the time of reservation in fully automated hotels)

- Guests are authorized to make charge purchases once a line of credit has been established (through

Direct Billing Authorizations or Credit Cards).

PIA Guests or Paid-in advance

- Guests who pay cash for accommodation at the time of registration.

- Generally charge purchase privileges not given.

Credit Monitoring:

- A major task of Front Office is to ensure that all guest & non-guest accounts are within acceptable

credit limits.

- FOM & Night Auditor are responsible for identification of such High Balance Accounts & necessary

action. In large hotels, there is a credit manager for reviewing such accounts. He/ she is also

responsible for settlement of city ledger accounts.

Account Maintenance

- Guest folios must be accurate, complete and properly filed since guests may enquire about their

balance or check out in a hurry.

- Transaction Postings conform to the Basic Front Office Accounting formula –

Previous balance + debits - Credits = Net Outstanding Balance

PB + DR - CR = NOB

visitor's tabular ledger

VISITOR'S TABULAR LEDGER

 

These ledgers are in loose ruled forms.It is called Visitors tabular ledger because,it is made for all hotel visitorsand it is called tabular because it is prepared in analytical/tabular/columnar form.This is also called Day  Book.It is called day book because all transactions which take place during the day in a hotel are recorded in this ledger.In case the number of rooms occupied are more than the columns of the ledger then more pages can be added for the same day.

Only credit sale to resident guests are recorded in this ledger.Tat means cash sale to resident guests and credit sale to non-guests is not recorded in this ledger,At thhis point of sale the guests can avail services,facilites,etc and caan sign the bills.The signed bill/voucher is posteed in the appropriate column of visitor's tabular ledger,the voucher is stamped as posted so that it may not be posted again by mistake.

 

Visitors tabular ledger has debit side and credit side,normally accounting system left side is debit and the right side is  credit side.But in case of visitors tabular ledger the upper side is called debit side and  the lower side is credit.

 

ADVANTAGES OF VISITORS TABULAR LEDGER:

 

1. Easy: It is ann easy system to understand and after a day's training cashier can be asked to prepare the visitors tabular ledger.

2. Economical: The ledger is prepared in the ruled sheets so it doesnot cost much money.

3. Fewer mistakes: Voucher are debited directly.The chances of making mistakes is minimized.

4. Sale under various heads: different heads columns are made and totaled horizontally.It helps in knowing the sale of various departments.

5. Cross Checking : In case of any controversy cross-checking can be done through voucher

6: Arithmetical checking: All columns are totaled both horizontally and vertically It helps in cross checking the total and in case of error it can be rectified instantly by the cashier.

 

 

DISADVANTAGES OF VISITORS TABULAR LEDGER:

 

1: Difficult to handle: due to a big size it becomes difficult to handle.

2. Store : since it is in loose paper form and it gets torn very fast so it becomes difficult to store for a longer period.

3. Wrong Posting: The columns are usually very small and cashier might enter one rooms entry to other room by mistake and this mistake can not be rectified byy checking the cross totaling.

KEY CONTROL

KEY CONTROL

One of the most important factors of the guest room is the lock on the door .

In past key control systems were limited to basic metal key these were easily lost and were costly to replace.

Key control systems eventually evolved into systems that were easier to replace called key cards . These plastic keys were filled with small holes at the one end that the door could read when inserted . The drawback to key card was that they had the room name printed on them this posed a major security risk and thus had to be replaced as well.

Modern hotels today use computer controlled key control system . A credit card type card is assigned a special code when activated by the front desk . This key is preprogrammed with guest arrival and departure information and will work for the duration of guest stay and for particular period.

TYPES OF KEYS :-

EMERGENCY KEY

MASTER KEY

GUEST ROOM KEY

ELECTRONIC LOCKING SYSTEM

1. Emergency Key: A key that can open all doors double locked in hotels, among others:
Guest room door (Guest Room)
Door Office (Office)
Door Warehouse (Store)
This key is usually held by the Management Hotel or GM can use the emergency moment / emergency

2.Guest Room Key: Key available for use by the guests to open the rooms such as CARD or a special card and some form of regular keys, so-called Key Tag if the child is the key hanger.

3. Master Key: A key that can be used to open the door on one floor / floor or one section area all  single locked. So if the hotel consists of 8 floors / section in the hotel so there will be 8 pieces Master Key.

ELECTRONIC LOCKING SYSTEM

An electronic lock system (more precisely an electric lock) is a locking device which operates by means of electric current. More often electric locks are connected to an PROPERTY MANAGEMENT SYSTEM. The advantages of an electric lock connected to an property management system include: key control, where keys can be added and removed without re-keying the lock cylinder; fine access control, where time and place are factors; and transaction logging, where activity is recorded.

SAFETY AND SECURITY IN THE HOTEL -----

SAFETY AND SECURITY IN THE HOTEL -----

Lost and found – This is a term used in hotel parlance to refer to any item which is left by the guest or temporarily misplaced by the guest but traced later by the hotel staff. Such articles to be handed over to the housekeeping department which maintained a special locker for this purpose .if the item belongs to the guest who has already checked out  ,then a letter has to be sent to the forwarding address left by the guest while checkout or which is there in the registration card ..If no reply is received by the hotel within certain time limit, that may be auctioned to the hotel employees as per the hotel rules.

If the lost belongings are found in the public areas  and the guest is still residing in the hotel then housekeeping department keeps those items with them till any complain is made at the front office or in the  lobby..in this case a customer is required to give a description of the article which is lost ,before that item is shown to him .

Fire in the hotel –

As soon the fire is detected and intimated to the front desk ,the first thing to do is to inform the telephone department .inmost hotels the telephone department the telephone department plays a pivotal role of alarming the hotel .in smaller hotel which have telephone department is merged with the front office ,there the first job is to call the fire department of that city for the help .the front office should alert all guest and inform them to use the staircase and not the elevator .the telephone exchange should always be manned during fire to communicate from one point to another .if the front office staff have to get actively involved in the procedure then they should search each room thoroughly ,specially under bed or in closets or bathrooms to ensure that no guest is left behind .they must guide the guest through the fire exit map .and help in extinguishing the fire by the use of appropriate fire extinguishers

(Foam for electrical fires and oil fires, water for the general fires and so on.)

Death-

The front office should inform the General Manager, the security officer and call for the hotel doctor,. no alarm is raised and none of the guest to be informed .the General Manager may decide to call the police .the room to be sealed till police formalities are over. People known to that person is  to be contacted through the addresses entered in the registration card .

Accidents –

The house doctor should be called immediately on phone and informed the nature of the accident and condition of the guest .the doctors instructions must be followed immediately .bleeding must be stopped by swabbing wounds with cotton wool and applying antiseptic or any lotion .if a fracture is suspected the guest is not moved till the doctor arrives .burns are to be treated with creams meant for the purpose .Water is never poured over the burns as this will surely leads to the blisters .hotel should train staff for this purpose .

Vandalism –

The front office staff must call the hotel security and order the main door to be locked .if thing get out of the hand police must be called.

Damaged to property by the resident guest –

The front office cashier is instructed to raise a charge for the value of the of damages to property, a responsible guest will never argue but if it is the subject to be referred to the general manager .

Drunken guest –

It is prudent to never argue with drunken guest .he must be politely led away from the public areas either into an office or in his room...if he is behaving unruly the security may be called.

Theft –

Hotel often adopts certain precautions to avoid thefts -
these are:-

·         Self locking room doors.

·         Safety deposit boxes for guest valuables

·         Watching guests with light baggage who could become potential skippers.

·         Watching a walk-in who can be a thief.

·         Avoiding giving room numbers to visitors or guest names to telephone callers.

·         Strictly controlling the master key.

·         Posting security personals on floor.

·         Keeping all entrances, corridors and staircases well illuminated.

·         Reporting immediately any suspicious characters.

Bomb threats –

With the increase in terrorism in the country and world ,the bomb threats are not so uncommon these days .this may be a genuine threat with explosive planted some where  in the hotel or it may be a hoax.which ever the case may be such threats are always taken seriously and the proper action taken .

Mostly bomb threats are made on phone are attended by either the telephone operator or the receptionist of the hotel.in this following steps to be followed—

·         Signal the colleague to also listen in the call and try to find out the location through exchange.

·         Listen the caller carefully and make it prolong and get all the information carefully- place where planted,time of explosion and streghth of explosives.

·         If possible this call may be taped and note the back noise and try to catch information from accent and police to be informed.

·         Immidiatly after disconnection the G M and security officer has to be informed .

·         If the location is identified the department head should be also informed

·         People from that suspected area has to be evacuated from that particular location .

·         After “all clear” signal from the police the normal process of hotel can be continued.

SAFE DEPOSIT –

Though hotel is not responsible for the guest valuables, the rule to this effect is written in the guest registration card and also notified in the in guest room .but a hotel offers a free safe deposit facility for his valuables.

Hotels have bank type of lockers installed at the front office cash. A locker is allotted to guest that can be opened by using two keys .the master key is with the front office cashier and other key is issued to the guest. A contract is also signed in between the guest and the hotel. Whenever a guest wants to open that locker it has to be entered into the locker operating register. Signatures are always verified with the specimen .head cashier inserts his key then a guest inserts his own key, and then only a lock can be opened. Guest is left alone to operate his locker..Guest can lock the locker with his own key. At the time of departure the guest is asked to vacate the locker.

If the key is lost by the guest .then the locker will be drilled open in presence of the guest and can be charged for the replacement of the locker.

If the forgets to vacate the locker .he or she has to be informed by the hotel to come and vacate it either personally or by sending an authorised person with authority letter.

These days some hotels have installed an electronic safe deposit box in each guest room .this safety box can be operated by using an electronic number. Guest can use any number to open the lock. The number selected by the guest becomes the locker’s code number .the guest’s are advised to keep there valuables in the electronic safety box. Though hotel is not responsible for any lost item .But hotels take this issue as prestige issue. So an inquiry is done on the hotel security level.

HANDLING A DRUNKEN GUEST IN A HOTEL

Handling a drunken guest in the hotel seems to be a very easy task in listening but in itself is a very difficult task and handling a guest who is drunk and completely out of his senses is next to impossible.

Certain attributes you have to possess:

·        Act politely

·        Never argue

·        Talk softly and lead him away from the public area

·        If the drunk guest is behaving rudely then the last option should be to call the security officer but try and handle the situation very calmly.

The conversation above will give the fair idea of handling this kind of situation which may be very common in hotels.

Receptionist: “good evening sir, how may I assist you?”

Guest: “I want my room to be changed and should be on the other floor.”

Receptionist: “sir please may I know the reason for your room change.”

Guest:  “there is no specific reason but I am just ordering you to change my room as you are here for my assistance.”

Receptionist: “i am very sorry to say so but sir without any specific reason our room cannot be changed and right now we also don’t have any room available because we are running on 100% occupancy. My sincere apologies to you sir.”

Guest: “how dare you talk to me like that just call your manager I will talk to him.  You  bloody don’t know who I am. I will surely change the room and you all are here for me only just do as I say.

NOTE: here the duty manager or the immediate supervisor should take the drunken guest away from the reception/front desk area and make the guest realize that this is not the right way to talk and then acting very calmly and talking very politely with him the supervisor can escort him to his room or he can indulge the guest in some other thoughts and just keep the guest calm and as soon as possible send him back to his room.

handling bomb threats-role play

Bomb Threats in hotels

Bomb threats are usually received orally on telephone by hotel’s telephone operator. It should be handled in the following way:

Telephone operator: “Good evening! Hotel Moon. How may I help you?”

Person: “A bomb has been planted in your hotel.”

Telephone operator: “May I know to whom I am speaking?”

(she indicates the other employee to record it )

Person: “You won’t be able to know it. The bomb planted in your hotel will blast in 4 hours from now. If you want your hotel and the people over there to be safe, you will have to fulfill our demands.”

(The employee should remain observant and calm. He/she is hearing sound bells of temple in the background.He/ She should try listening to the person more and ask questions to keep him connected.)

Telephone operator: “Where is the bomb located?”

(recognizing his voice as of a south Indian )

Person: “You and your people will never find out.”

Telephone operator: “What is your reason for planting this bomb?”

Person: “Because we want our needs to be fulfilled. Do not dare to inform the police because they will also be of no help.”

Telephone Operator: “Where are you calling from?”

Person: “You will not find this also. Wait for my next call and I will tell you all my demands. You better fulfill them or the results will be disastrous.”

-----------Line Disconnected-----------

o   After the call gets disconnected, the Front Office Manager should be informed.

o   All the department heads and General Manager should gather at one place and discuss the matter.

o   The Police should be informed and they should investigate the threat.

o   If the telephone operator has heard anything during the call that can be of any help, it should be informed to the police. All details such as the voice of the person, background noise etc. should be told.

o   One staff member should guide the police and other teams to the hotel for searching the bomb.

o   If a suspicious object is found, the hotel should be evacuated and make sure all doors and windows are open.

security in hotels

Front Office Security Functions

   Protecting a. People -Guests- guest’s health, comfort or wellbeing,

    -Employees & others

b. Property - equipment, machinery, fixtures & fittings, software, revenue, reputation.

The role of Front Office-

Although it is the responsibility of everyone, yet Front Office staff plays an important role as

they have opportunity to observe all persons entering or departing the premises.

Procedures for Guest Security

·         Should never disclose the information about the guest to anyone.

·         Front office staff should prohibit the staff to provide any information about the guests to any caller

or visitors.

·         Should never give room number, room keys and messages or mail of the guest to anyone else.

·         Screening of caller before connecting the call to the guest/ no connection of the call without the permission of the guest.

                                     .

·         Should also inform the guests of personal precautions they may take.

·         The bell boy should give instructions to the guest of equipment use.

·         Flyers/ pamphlets of safety tips should be placed in the rooms.

·         Front Office Staff also help protect guests’ personal property.

·         Front Office staff also important to asset protection (charging guests for breakages etc.).

Procedures for Property Security

·         The building should be enclosed with a Fencing-High rise concrete wall, wired etc.

·         Adequate lighting on all side of the property.

·         Security guards/ manning of all entries/ exits.

·         CCTV placed at all strategic locations inside and outside the buildings.

·         X-ray machines for luggage scanning.

·         Inverted Mirrors for scanning of lower side of cars/ vehicles.

·         Underground scanners for cars/ vehicles.

·         Underground Tyre-cutters for cars/ vehicles.

·         Door framed Metal detectors.

·         Hand held scanners.

·         Frisking of all guests/ visitors.

·         Multi-purpose room keys (for the use of lift/ entry for adjacent mall etc.)

·         Use of Sensors