The document discusses front office accounting fundamentals for hotel operations. It covers topics like maintaining accurate guest accounts and folios, tracking financial transactions, ensuring internal controls, and recording settlements. Specific areas discussed include types of folios, guest and city ledgers, the front office accounting formula, common transactions, internal control functions, and cash banks. The goal is to provide a high-level overview of front office accounting concepts and procedures for hotel management.

1. © 2009, Educational Institute
Chapter 8
Front Office Accounting
Managing Front Office Operations
Eighth Edition
(333TXT or 333CIN)

2. © 2009, Educational Institute
Competencies for
Front Office Accounting
1. Summarize front office accounting fundamentals,
including issues surrounding accounts, folios,
vouchers, points of sale, and ledgers.
2. Describe the process of creating and maintaining front
office accounts.
3. Describe typical procedures for processing and
tracking common front office accounting transactions.
4. Describe internal control procedures for front office
operations and explain typical settlement procedures.

3. © 2009, Educational Institute
Front Office Accounting
Fundamentals
• Create/maintain accurate account files
• Track financial transactions
• Ensure internal control
• Record settlement
• Accounts
• Folios
• Vouchers
• Point-of-sale systems
• Ledgers

4. © 2009, Educational Institute
Types of Folios
• Guest folios
• Master folios
• Non-guest folios
• Employee folios
• Special request folios (split folios, for example)

5. © 2009, Educational Institute
Guest/City Ledgers
Guest ledger:
• Accounts of registered guests
• Accounts of advance deposits from future guests
(credit balance)
• Front office collects
City ledger (non-guest ledger):
• Guest ledgers not paid in full at check out
• Accounting department collects

6. © 2009, Educational Institute
Front Office Accounting Formula
Previous Balance + Debits – Credits
= Net Outstanding Balance

7. © 2009, Educational Institute
Front Office Transactions
• Cash payment
• Charge purchase
• Account correction
• Account allowance
• Account transfer
• Cash advance

8. © 2009, Educational Institute
Internal Control Functions
• Track transaction documents
• Verify account entries and balances
• Identify vulnerabilities in the accounting system

9. © 2009, Educational Institute
Cash Banks
• Bank limit
• Net cash receipts
• Overage/shortage
• Due back

10. © 2009, Educational Institute
Cash Banks
• Bank limit
• Net cash receipts
• Overage/shortage
• Due back