The document discusses various modes of payment that can be used to settle guest accounts in hotels. It describes cash payment options like currency notes, traveler's cheques, personal cheques, and debit cards. It also explains credit settlement options like credit cards, travel agent vouchers, and corporate billing. For each payment method, it provides details on the acceptance process at check-out to ensure secure transactions and avoid disputes.

2. 6.1 Credit card handling
6.2 Traveler cheques, Personal cheques
6.3 Handling cash Indian
6.4 Foreign currency
6.5 Other methods of payment (Travel agent, Bill to Company
etc.)
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Prepared by - Syed Rana Safiuddin, MGM-IHM

3. Generally hotels determine the mode of settling the guest accounts
at the time of registration or sometimes even at the time of receiving
the reservation request.
This makes it very convenient for the front desk employee to
prepare the guest bill at the time of check-out.
There are several acceptable modes of payment – foreign currency,
traveller’s cheque, demand draft, debit card, credit card, and so on.
Modes of settlement are divided into two
a) Cash Settlement
b) Credit Settlement
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4. The cash payment option is one of the most preferred modes of settlement
of guest accounts. The various modes of settlement by cash are illustrated
below in the diagram -
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Cash
Settlement
Currency
Notes –
Local &
Foreign
Traveller’s
Cheque
Personal
Cheque
Demand
Draft
Debit
Card

5. Currency Notes - Guest can settle their accounts by paying through
currency notes. This is one of the most widely accepted modes of account
settlement. While accepting currency notes, the cashier should check if the
currency notes are genuine. The following procedure is generally adopted
for accepting cash payments:
If accepting foreign currency from guest, the cashier checks the daily
currency conversion rate.
To avoid any disputes, the cashier should retain the cash amount outside
the cash drawer till the transaction is completed.
The cashier should count the value of the currency in front of the guest.
The cashier issues a receipt for the transaction.
As per government regulations, the cashier should accept foreign currency
only from foreigners and return the balance amount, if any, in local
currency.
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6. Traveller’s Cheque - A Traveller’s cheque or TC is an internationally
accepted cheque for a sum in a specific currency that can be exchanged
elsewhere for local currency or goods. It is also among the most widely
accepted mode of account settlement Issued by a financial institution it
functions as cash but is protected against loss or theft. The value of the
traveller’s cheque is written on it. Traveller’s cheques are useful when
travelling, especially in the case of oversees travel when all the credit &
debit cards are not accepted. When a person exchanges traveller’s cheque
for cash, he usually incurs a charge or commission, though some banks
wave off this charge.
The purchaser of the traveller’s cheque puts two signature – one in front of
the issuing authority & the second in front of the encashing authority. To
prevent misuse, the loss of a traveller’s cheque should be immediately
reported to the issuing bank & local police authority.
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7. While accepting a traveller’s cheque from a guest for the settlement of bills,
the front desk cashier should proceed as follows:
Ensure that the second signature is put in front of him.
Check the guest passport to establish identity.
Note down the passport number at the back of the traveller’s cheque.
If the traveller’s cheque is in foreign currency, calculate the current
exchange value as per the daily rate.
Return the balance to the guest in local currency.
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8. Personal Cheque - Personal cheques are cheques drawn against
funds deposited in an individual’s personal bank account. It takes
some time before the payment for the cheque is received from the
issuing bank. There is also a chance of the bank refusing a payment –
if there is insufficient amount in the account or if the guest has
‘stopped’ the cheque. Hence, it is normally not an accepted mode of
account settlement. However, hotels may accept personal cheques
from frequent guests or guests from companies that give a high
volume of business to the hotel.
In case a guest insists on settling his bill by personal cheque, the
front desk agent may politely request him to get an authorization
from the lobby manager.
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9. On receiving authorization from the lobby manager, the guest has to
submit an application for making payment by personal cheque. The front
office agent needs to check the following details:
The signature in the application form and the cheque match.
The cheque is crossed as ‘A/c Payee Only’.
The amount in figures and words is the same.
The date on the cheque is valid.
Accept only MICR(Magnetic Ink Character Reader) cheques.
Do not accept second or third party cheques.
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10. Demand Draft - A demand draft is a written order from the bank for the payment
of money upon presentation of the same. A person may obtain a demand draft
from a bank by filling the required form and paying the draft amount and the
bank’s commission. It is a secure and widely accepted mode of payment.
Debit Card - A debit card is a card(usually plastic) that allows customers to access
their funds immediately, electronically. It enables the holder to withdraw money or
to have the cost of purchase charged directly to his bank account without paying by
cash or writing a cheque. It also acts as an ATM card, which is used to withdraw
money from ATMs (automated teller machines). It is a safe mode of account
settlement as the amount is instantly transferred to the hotel’s account. In case of
insufficient funds , the bank does not authorize the transaction and the guest is
requested for an alternative mode of payment.
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Credit
Settlement
Credit Card /
Charge Card
Travel Agent
Voucher
Corporate
Billing / Bill
to Company
(BTC ) Letter
A credit settlement is an arrangement for the deferred payment of goods
and services i.e., a settlement in which hotel does not receive any payment
on the day of departure of the guest but would receive it later. The various
credit modes are illustrated below in the diagram -

12. Credit Card - A credit card is a payment card (usually plastic) that
allows the owner to obtain goods & services on credit terms, without
paying cash.
While processing payment through credit cards, the front desk
cashier follows the following procedure:
Check the card holder’s name on the card.
Check the expiry date of the card.
Check if the card is a stolen card.
Ask the guest to sign on the transaction slip.
Verify the guest signature on the transaction slip against the
signature on the back side of credit card.
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13. Travel Agent Vouchers – Tour Operators & Travel agencies selling
packages or customized tours make bookings for a guest’s
accommodation, food and beverage, and other services. Mostly , they
receive advance payment from travelers at the time of selling the tour
package itself. The travel agency sends a voucher to the hotel with
the details of the billing procedure (direct payment by the guest or
bill to TA) and the services (room & meal plan) to be provided to the
guest.
While processing the TA Voucher, the front desk cashier should
proceed as follows:
Read the entire voucher carefully.
Refer to the list of approved TA’s to whom the hotel offers credit.
Check the billing instructions carefully.
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14. P r e p a r e d b y –
S y e d R a n a S a f i u d d i n
A s s i s t a n t P r o f e s s o r,
M G M - I H M ,
M G M U n i v e r s i t y , A u r a n g a b a d .
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