Check out procedure

1. Woods et al., Professional Front Office
Management
© 2007 Pearson Education, Upper Saddle River,
NJ 07458. All Rights Reserved.
Guest Charges, Payment, and
Check-out
COMPILED BY,
MR. SUNIL KUMAR
LECTURER,

2. Woods et al., Professional Front Office
Management
© 2007 Pearson Education, Upper Saddle River,
NJ 07458. All Rights Reserved.
 Guest charges can include:
 Guest room charges
 Taxes related to the sale of guest rooms
 Guest-initiated room telephone charges
 Food and beverage and other product/services
purchases charged to the guest’s room
 Charges for any other goods and services directly
interfaced with the PMS

3. Woods et al., Professional Front Office
Management
© 2007 Pearson Education, Upper Saddle River,
NJ 07458. All Rights Reserved.
 Generally Accepted Accounting Principles
(GAAPs): Standards and procedures that have
been adopted by those responsible for
preparing business financial statements for the
purpose of ensuring uniformity.
 Accounting: The process of summarizing and
reporting financial transactions.
 Bookkeeping: The process of initially
recording financial transactions.

4. Woods et al., Professional Front Office
Management
© 2007 Pearson Education, Upper Saddle River,
NJ 07458. All Rights Reserved.
 Assets: Items owned by a business including
cash on hand, money in checking or other
accounts, money owed to the business,
inventories, property, equipment, and
furnishings.
 Liabilities: Debts owed by a business.
 Owner’s Equity: What remains after subtracting
what the business owes others (its liabilities)
from what the business owns (its assets).

5. Woods et al., Professional Front Office
Management
© 2007 Pearson Education, Upper Saddle River,
NJ 07458. All Rights Reserved.
 Uniform System of Accounts for the Lodging
Industry (USALI): A standard set of
accounting procedures used to record a hotel’s
financial transactions and condition.

6. Woods et al., Professional Front Office
Management
© 2007 Pearson Education, Upper Saddle River,
NJ 07458. All Rights Reserved.
 Account: A device used to show increases or
decreases in the asset, liability, or owner’s
equity sections of the fundamental accounting
equation. Because of their shape, accountants
refer to these as “T” accounts.

7. Woods et al., Professional Front Office
Management
© 2007 Pearson Education, Upper Saddle River,
NJ 07458. All Rights Reserved.
 Accounts Receivable (AR): Money owed to a
hotel.
 Accounts Payable (AP): Money owed by a
hotel.
 Retained Earnings: Profits earned but not paid
(disbursed) to the business owners.

8. Woods et al., Professional Front Office
Management
© 2007 Pearson Education, Upper Saddle River,
NJ 07458. All Rights Reserved.
 Double Entry Accounting: A system of
recording financial transactions in a way that
maintains the equality of the fundamental
accounting equation:
Assets = Liabilities + Owner’s Equity

9. Woods et al., Professional Front Office
Management
© 2007 Pearson Education, Upper Saddle River,
NJ 07458. All Rights Reserved.
 Debit: An accounting transaction that records a
change on the left side of a “T” account in an
asset, liability, or owner’s equity account.
 Credit: An accounting transaction that records
a change on the right side of a “T” account in
an asset, liability, or owner’s equity account.

10. Woods et al., Professional Front Office
Management
© 2007 Pearson Education, Upper Saddle River,
NJ 07458. All Rights Reserved.
 Front Office Accounting System: The
automated and/or manual data collection and
reporting system that summarizes and
documents the financial activities of a front
office.

11. Woods et al., Professional Front Office
Management
© 2007 Pearson Education, Upper Saddle River,
NJ 07458. All Rights Reserved.
 Guest Ledger: The set of accounts used to
record charges to and payments from the
hotel’s registered guests.
 City Ledger: The set of accounts used to record
charges to and payments from the hotel’s non-
registered guests.
 General Ledger: The primary ledger that
contains all of a hotel’s accounts and that is
used to create its income (profit and loss)
statement.

12. Woods et al., Professional Front Office
Management
© 2007 Pearson Education, Upper Saddle River,
NJ 07458. All Rights Reserved.
 Adjusting accounts can be necessary as a result
of:
 Posting Errors
 Hotel-related problems
 Guest-related problems
Total Monthly Allowances and Adjustments = Total
Room
Room Allowance and Adjustment %
Revenue

13. Woods et al., Professional Front Office
Management
© 2007 Pearson Education, Upper Saddle River,
NJ 07458. All Rights Reserved.
 Back Office Accounting: The process of
summarizing and documenting the financial
activities and condition of the entire hotel.
 Controller: The individual (or department) in a
hotel responsible for maintaining the back
office accounting system.

14. Woods et al., Professional Front Office
Management
© 2007 Pearson Education, Upper Saddle River,
NJ 07458. All Rights Reserved.
 Settlement (Account): The collection of a
payment for an outstanding account balance.
Settlement may involve the guest paying cash
or charging the account balance to a valid
payment card or another hotel-approved
account.
 House Account: An account whose entries are
assessed to another hotel entity.

15. Woods et al., Professional Front Office
Management
© 2007 Pearson Education, Upper Saddle River,
NJ 07458. All Rights Reserved.
Payment card processing:
1. Initiation
Address Verification Service (AVS): A company
that, for a fee, allows access to its database of
current addresses.
2. Authorization
Chargeback: Payment card charges disallowed
(reversed) when a cardholder successfully protests
the legitimacy of the charge or because the hotel
made an error in processing it.
3. Completion of transaction
4. Receipt of funds

16. Woods et al., Professional Front Office
Management
© 2007 Pearson Education, Upper Saddle River,
NJ 07458. All Rights Reserved.
 Establishing credit limits:
 Block (Funds): The amount by which a card’s
available credit (if a credit card) or balance (if a debit
card) is reduced; also called a “hold.”
 Monitoring credit limits

17. Woods et al., Professional Front Office
Management
© 2007 Pearson Education, Upper Saddle River,
NJ 07458. All Rights Reserved.
 Departure List: A report, by name and room
number, of all guests scheduled to leave the
hotel on a specific date.
 Late Check-out: An arrangement that allows a
guest scheduled to leave the hotel to maintain
access to his/her room after the standard
check-out time.

18. Woods et al., Professional Front Office
Management
© 2007 Pearson Education, Upper Saddle River,
NJ 07458. All Rights Reserved.
 Bucket Check: Industry jargon for a systematic
examination of guests’ folios to ensure the
accuracy of guest information. Bucket checks
typically include rate verification, credit
monitoring, and confirmation of departure date
and guest room assignment.

19. Woods et al., Professional Front Office
Management
© 2007 Pearson Education, Upper Saddle River,
NJ 07458. All Rights Reserved.
 Check-out fundamentals:
 Creation of departure list
 Confirmation of guest identity
 Quality of stay inquiry
 Property exchange
 Final data entry/posting of charges
 Guest folio inspection
 Processing guest payment
 Future reservation inquiry
 Filing documentation
 Revision of room status

20. Woods et al., Professional Front Office
Management
© 2007 Pearson Education, Upper Saddle River,
NJ 07458. All Rights Reserved.
 Account settlement methods:
 Cash and check
 Payment card
 Direct bill
 Combined settlement
 No-show billing

21. Woods et al., Professional Front Office
Management
© 2007 Pearson Education, Upper Saddle River,
NJ 07458. All Rights Reserved.
 Check-out variations:
 Late check-out charges
 Express Check-out: Any number of methods of
guest-initiated check-out that do not require guests
to be physically present at the hotel’s front desk for
folio payment.
 Unpaid accounts:
SOF: Short for “Signature on File”; refers to a
signature obtained from a guest at check-in.

22. Woods et al., Professional Front Office
Management
© 2007 Pearson Education, Upper Saddle River,
NJ 07458. All Rights Reserved.
 Other check-out challenges:
 Room damage assessments
 Group allowance strategies
 Post check-out complaint adjustments