Front Office Accounting Basics of Front Office Accounting Types of Accounts Types of Folios Types of Postings Types of Vouchers Accounting Terminologies Accounting System Credit Monitoring Floor Limit Credit Limit House Limit Front Office Accounting Cycle Stages of Settlement Internal Audit Handling Cash Float Types of Transactions

1. FRONT OFFICE
ACCOUNTING
By Arpendra Chauhan

2. TABLE OF CONTENTS
1
ACCOUNTING
SYSTEM
FRONT OFFICE
ACCOUNTING
BASICS
ACCOUNTING
TERMINOLOGIES
FRONT OFFICE
ACCOUNTING
CYCLE
INTERNAL AUDIT
TYPES OF
TRANSACTIONS
2
3
4
5
6

3. 1
Basic Accounting
Terminologies &
Introduction

4. WHAT’S IN IT FOR YOU?
ACCOUNTING
Types of
Accounts
FOLIOS
Types of
Folios
LEDGER
Types of
Ledgers
OTHER TERMS
Accounting
Terms
VOUCHERS
Types of
Vouchers

5. GUEST ACCOUNT
The record of financial
transactions which takes
place between a resident
guest & the hotel.
NON-GUEST ACCOUNT
ACCOUNTING
is the process of collecting, recording, summarizing,
analyzing financial transactions.
The record of financial
transactions which takes
place between a non-
resident guest & the
hotel.

6. FOLIOS
The statement of all the transactions that take place
between a guest and the hotel.
GUEST FOLIO
Used to record transactions
made by an individual guest.
MASTER FOLIO
Is assigned to more than one person.
Usually reserved for group account.
NON-GUEST FOLIO
Also known as semi-
permanent folio. Assigned
to non-guest business/
agencies with hotel
charges like pool charges,
meeting rooms etc.
EMPLOYEE
FOLIO
Folio assigned to
employess with
charge purchase
privilages.
SPLIT FOLIO
The folio in which
charges are split as
requested by the one
paying for the same.

7. POSTINGS
add or subtracts guest
charges & payments to
the guest’s individual
account.
CREDIT POSTING DEBIT POSTING
Include room charges,
restaurants, coffee
shops, or any other
charges for any facilites
used in the hotel.
Include pre-payments,
advance deposits,
partial payments, final
settlement of
payments etc.

8. VOUCHER
are documents that have the details of the
transactions made by the guest.
Charge Voucher is also called as
accounts receivable voucher.
These are for the charges posted
in the guest folio & guest signs
the same.
Correction Voucher is the
voucher used for correcting
any wrong charges posted
(higher/ lower)
Allowance Voucher need manager
approval. Used for compensation
OR correction of posting error after
the closure of business date.
Paid Out Voucher is used
when the hotel is paying for
the services on the behalf
of the guest.
Transfer Voucher is used
when charges are moved
from one folio to other.

12. GUEST LEDGER CITY LEDGER
POINT OF SALE
Also known as Room Ledger or
Transient Ledger. It has the
data of all payments made by
the guest in advance or the
time ofcheck in.
A book in which the summary
of both resident & non-
resident guests are entered. It
is a collection FO Folios.
Denotes the location at which the
guest purchases goods or
services in the hotel property.
Also known as non-guest ledger.
Used for skippers & no-shows
who have made advance
payment. Also used for TAs &
Companies who have credit
facility.
LEDGER

14. 2
Accounting System &
Credit Monitoring

15. NON-AUTOMATED SYSTEM is the manual system of keeping
guests debit & credit entries during occupancy. Everything gets
totaled at the end of the day & the closing balance is carried
forward to opening balance of the next day.
SEMI-AUTOMATED SYSTEM records the
daily transactions and prints the same on a
machine posted folio.
AUTOMATED SYSTEM are the
computerized POS system in which all
the transactions are automatically
recorded.

16. Floor Limit
is the limit set by the bank to
charge the credit card.
CREDIT MONITORING
is the process to make sure all the accounts are within the
hotel credit limit. Night Auditor & FOM are responsible for
the same along with the Credit Manager.
ASSIGNMENT:
Do a detailed study of Credit Monitoring process.
Differentiate between Floor Limit & Credit Limit.
Credit Limit/ House Limit
is the limit set by the hotel to be posted in
guest account without partial payment.

17. 3
Stages of Settlement

18. STAGES OF SETTLEMENT
CREATION
OF
ACCOUNTS
SETTLEMENT
OF
ACCOUNTS
MAINTENANCE
OF
ACCOUNTS

19. CREATION OF
ACCOUNTS
•First transaction between the hotel & the
guest
•Advance payment at the time of booking
•Pre-payment prior to arrival
•System creates a folio when it received a
payment
•All transactions are recorded in the system
•Hotel sets a credit limit i.e. maximum
amount of credit that the hotel will extend to
the guest
MAINTENANCE OF
ACCOUNTS
•All transactions are recorded in order
of the occurrence.
•Debit entries like room charges, F&B
charges, telephone, laundry,
transportation etc.
•Credit entries like pre-payment,
advance deposit, partial payment,
allowance given to the guest,
adjustments made in case of error etc.

20. SETTLEMENT OF
ACCOUNTS
•This is the final stage of settlement
•This is the stage/ phase which does the zeroing of the balance
in the guest folio
•Outstanding Balance= Opening Balance+ Debit Entries-
Credit Entries
•Final phase which takes place at the time of check out

21. 4
Cross checking of
processes internally

22. -Verifying account
entries and balances
-Identifying risks in the
accounting system
FRONT OFFICE CASH SHEET
OR CASHIER LOG SHEET
-Tracking transaction
documentERNAL AUDIT
CASH BANK OR CASH FLOAT
SHORTAGESOVERAGES
DUE BACK

25. 5

26. CASH TRANSACTIONS
•Amount paid in cash is posted as credit
•Reduces the net outstanding balance
•Cash voucher is used for transactions
•No entry will appear when cash is paid at POS
•Front Office will have to keep a copy of the check

27. CHARGE PURCHASE
•Outstanding payment transaction
•Guest consumes now but pays later
•These transactions increase the net outstanding
balance
•Transactions are supported by charge voucher
•Charge voucher/ check is printed in copies
•One copy goes to the front desk, one is with POS
•Can be posted directly from POS to PMS

28. ACCOUNT
CORRECTION
•Resolves posting error to the folio
•Correction is made on the same day the
error is made
•Should be done before night audit
•Correction can either increase or
decrease the balance
•Correction voucher is used to document
corrections
ACCOUNT
ALLOWANCE
Compensation of poor service or rebates or
discounts
Decrease the guest account
This is strictly controlled
Requires authorization from DM & above
Posting error after night audit or closing
business date
Wrong posting done after closure of
business date
Allowance voucher is filled
Errors entered in accounting records
Requires approval from Finance department

29. ACCOUNT TRANSFER
•Charges are transfered from one
guest account to other
•Approval & agreement from both the
parties is required
•Supported with a transfer voucher
•Payment is made on behalf of the
guest
•Debit transactions
•Increase account balance
•Money is used from cash bank
•Payment is always made in local
currency
CASH ADVANCE/
PAID OUT

30. ASSIGNMENT
Explain in details the Paid Out
procedure.

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