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Maintain Financial Record SITXFIN002A

Maintain Financial Record SITXFIN002A

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Maintain Financial Record SITXFIN002A

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  1. Maintain Financial RecordSITXFIN002A Lecture notes

  2. Financial Transactions Management Sub-Title Introduction of billing system Payments Processing payment documents Financial transactions TAFE

  3. Introduction • Every hospitality establishment has a billing system to deal with customer transactions. • Billing systems may be manual, electronic, computerized or  Point of Sale (POS). • Point of sale or point of service (POS) is a location where a transaction occurs. It is the equivalent of an electronic cash register. Point of sale systems are used in supermarket, restaurant, hotels, and casinos, as well as almost any type of retail establishment • Fundamental to any billing system is the ability to calculate and total a customer  account and then calculate and issue change to the customer.

  4. Local bar

  5. Advantages of the POS System • Orders print automatically in kitchen/bar therefore fewer trips to the kitchen/bar and more time with customers. • Order is legible for chefs/bar attendants • Ordering with the system automatically opens a bill for the table, which is updated automatically when new orders are placed • Waiters have their own key or pin number – check waiter averages and only the waiter can make entries into the system • Accurate and up to date management reports • Links up to other systems i.e. reception, housekeeping

  6. Disadvantages of the POS System • Initial costs can be expensive • Training/retraining of staff • Malfunctions: • Paper Out – printers • Error message – terminal • System down – power failure • User error

  7. Payments • Accepting payments • These days, customers expect a range of options when conducting financial transactions. • As a tourism industry employee, you need to know all forms of payment that are appropriate for your business and customers. Forms of payment accepted by your business may include one or more of the following: • cash • cheques: personal, bank or business • credit card or cash card • EFTPOS • travellers cheques • foreign currency • invoice.

  8. Cash

  9. continued • Cash • To process cash payments, your business may use a manual approach with a cash drawer or in larger businesses some type of register (manual, electronic, computerised or point of sale system). • Ensure that your calculations are accurate and use a calculator or register, if available. • When accepting cash, ensure that it is legal tender and that the notes are not seriously damaged. • Change should be provided using the largest denominations available, and counted out to the customer as a way of ensuring errors are not made.

  10. Business Cheque

  11. Personal Cheque

  12. continued • Cheques • Cheques may be written against a personal account, issued by a bank, or written against a company account. Policies regarding personal cheques vary from business to business. • Commonly, personal cheques are not accepted unless a prior arrangement has been made or unless there is sufficient clearance time between the date of payment and the date of travel. Usually seven to ten working days are allowed.

  13. continued • Procedures for accepting a cheque: • ensure that the cheque is a valid form of payment as per the business' policy • Ensure that the chequeis dated and signed • Ensure that the word and number value correspond and are correct • Verify that the signature matches the name on the cheque • Every cheque accepted should be marked 'Not Negotiable' to protect the drawer and payee in case the cheque is lost or misplaced

  14. continued • Ensure the cheque is completed in blue or black pen • Ensure that any alterations made on the cheque are initialled • Cross check the name and signature with the appropriate ID (eg driver's licence) • Note the name, address and identification details (eg driver's licence number) on the back of the cheque • issue a receipt either manually or via a cash register..

  15. Credit Cards

  16. continued • Credit cards and EFTPOS • Major credit or charge cards include Bankcard (Australia), MasterCard, Visa and American Express. Acceptance of credit cards will depend on the type of system used by a business. • If EFTPOS (Electronic Funds Transfer Point of Sale) machines are used, expiry date, credit limit, and whether the card is stolen are checked by the system automatically. The only items to be checked by the staff member are the customer's signature and that the total is filled out. • The EFTPOS device requires the person providing the services for sale to enter the amount. The customer's card can be swiped or the card number may be manually entered via a numeric keyboard and the customer may need to enter their PIN (personal identification number).

  17. EFTPOS Machines

  18. continued • When a customer wishes to pay in this manner, these are the steps to follow: • Enter the amount of the purchase. • The card must be swiped or the card number and expiry date embossed on the front of the card are entered manually. Also check the expiry date on the card.. • The customer may need to enter their PIN, depending on the account type selected. • The EFTPOS machine will then send a message to the card issuer to check that the card and account selected are valid, there are sufficient funds to make the purchase and the PIN entered is correct. • The card issuer will send a response to the EFTPOS device indicating whether the transaction has been approved or declined. If it is declined, it will usually display a reason for the decline.

  19. continued • Retain the customer's card until authorisation has been granted or declined. • For approved transactions, the card issuer may debit the customer's account as the transaction takes place or they may debit the account within the next few days. • A receipt will be printed, indicating the purchase amount, date, time and other transaction details. A copy of this receipt should be given to the customer as proof of payment. • If the customer selected 'credit' as account type, they will normally be required to sign a copy of the receipt that will be retained as proof of the purchase.

  20. Credit Card Imprinter

  21. continued • Smaller Hospitality businesses may still use an imprinter for credit card transactions. Larger businesses will often still have an imprinter in case the EFTPOS system is offline. • The procedure followed when using an imprinter is as follows: • check the card is accepted in your business and is signed • check the warning bulletin for cancelled or stolen cards • after imprinting the card, check the card numbers are legible on the payment slip • write the date and amount • check the expiry date and circle it

  22. continued • if the amount is above the 'floor limit', ring for authorisation • retain the card until authorisation has been granted or declined • check the signature after the customer has signed the payment slip • return the card and the customer copy of the payment slip to the customer.

  23. Cont. • What to do procedures: • If the customer accidentally leaves behind the card, it should be kept for 24 hours in a safe place, after which time the card should be cut in half and returned to the card issuer. • If it is claimed, ensure that you establish the identity of the card holder before returning the card. The floor limitThe floor limit (or merchant limit) is the maximum credit card amount that a business can accept for an individual credit card transaction, above which the business must obtain phone authorisation.

  24. continued • Floor limits vary for different outlets and different card types. As long as the credit card number is not listed on the cancellation and warning bulletin, the payment of amounts accepted by the merchant below the floor limit is guaranteed by the bank or card company. • Hotels, business owners (eg travel agencies) receive regular update lists of cards that are invalid. A reward is offered to anyone who retains a cancelled card and returns it to the credit provider.

  25. Traveller Cheque

  26. Travellers cheques • A travellers cheque is a form of international currency that customers would normally convert at a bank. • Travellers cheques are written out in the country of departure and are issued by major banks, Thomas Cook and American Express. Travellers cheques can be issued in many currencies, in a variety of denominations and are treated as 'cash' payments. • If your business allows customers to pay by travellers cheque, it is usually only Australian dollar travellers cheques. Some businesses, however, may accept foreign currency travellers cheques. The procedure to follow when accepting travellers cheques for payment is as follows:

  27. continued • Ensure the cheque is dated and counter signed in your presence • Verify that the second signature matches the signature on the cheque • Cross check the name and signature with appropriate ID (eg a passport) • Note identification details on the back of the travellers cheque • Provide change in local currency • Issue a receipt either manually or electronically. • If the cheque is in a foreign currency, and your business will accept these as payment, then you will need to become familiar with rates of exchange.

  28. continued • Foreign currency • Foreign currency is not commonly accepted by Hospitality businesses. • If this is the case, you will need to convert this amount to AUD in order for your customer to make a decision about purchasing the service and, indeed, paying your agency. • Major banks issue foreign exchange rates daily and these may also be accessed via a computerised reservation system. These are used to calculate the conversion to Australian dollars. The formula to calculate this conversion is:

  29. continued • $AU1.00 divided by the exchange rate = 1 unit of foreign currency • For example: • Bank rate of Aus: $ 1= $US 0.86 • If I would like to change US $100 • The amount divided by exchange rate • 100/0.83 = 116 • This means that $US100 =$AU116 (rounded)

  30. continued • To then exchange foreign currency for Australian dollars, the formula is: • Number of foreign currency units multiplied by converted exchange rate • For example: • From the above converted exchange rate, calculate the AUD 200 equivalent of $US? • 200 x 0.86= US$ 172(rounded) • This means that $Aus 200 is equivalent to US$172. • When dealing with foreign currency, it is important to realise that the bank will also charge a fee to exchange the foreign currency and that rates fluctuate over time.

  31. GST • Calculating GST • The consumer bears the cost of the 10% GST, not the business producing the goods and services. • However, the liability to pay GST to the Australian Taxation Office rests on the supplier of the goods and services (ie the tourism business, not on its customer). • This is why it is vital that a business reports the GST liability accurately through their payment processing system.

  32. continued • To manually calculate the GST applicable on goods and services that are not GST free, the total amount payable is multiplied by 10%. • If some goods are GST free (eg airfares to international destinations), only the goods subject to GST are to be multiplied by 10%.

  33. continued • If a customer is given a total amount to be paid and wants to know the GST component, the total is divided by 11 to calculate the GST liability. • The federal government has introduced a tourist refund scheme that entitles travellers from overseas to claim the GST if they have purchased goods over the value of $300.00 at one retail outlet and have their receipts. • This refund is given at the airport of departure and is carried out by customs officers.

  34. Processing & providing receipts for payments • There is a variety of ways to process receipts and payments in tourism businesses. Both manual and computerised methods are considered standard. • All business documentation must bear the license number of the business as well as the ABN (Australian Business Number) issued by the Australian Taxation Office.

  35. Different kinds of receipts

  36. continued • The key documents needed when processing financial transactions in your business are receipts, refund notices, invoices and petty cash vouchers. These are described below. • Receipts • A receipt may be automatically produced by a point of sale system if your business uses a computerised system or electronic register. • In many smaller businesses, receipts may need to be completed manually. Receipts are usually prepared in duplicate, with a copy for the customer and a copy retained by the office.

  37. continued The receipt shows: • business name and ABN • date • time (automated receipts) • your name or initials • services supplied • subtotal GST inclusive goods and services • total • method of payment • amount tendered (automated receipts) • change given (automated receipts) • GST.

  38. Invoice

  39. Invoices • An invoice is issued to those customers who are account holders and who do not pay for their services as they are supplied, but rather on a regular billing basis (eg once a month). • In some tourism businesses, like visitor information offices, invoices are received rather than produced, for services provided to them. The invoice lists:

  40. continued • the business name and ABN • the date • the date of supply of services • the services provided • reference numbers • the subtotal • GST inclusive goods and services • the total • GST • payment terms.

  41. continued • Petty cash vouchers • Petty cash is the term used for money that is allocated for items that are purchased on short notice and for relatively small amounts, usually less than $100 (eg a taxi fare to a seminar or flowers for the office). • A separate float is kept in the safe for petty cash. An authorisation by management and a petty cash voucher are completed before funds are reimbursed to the staff member. • The purchase docket or receipt is attached to the petty cash voucher.

  42. Procedures for dealing with floats Very rarely will customers have the exact amount of money necessary to pay for their tourism purchase. Setting up a cash float involves deciding on the denominations to start your day or shift with and ensuring that the amount of money that you are provided with is what the float sheet totals. It is no use having two $100 notes as your change, just as it is not suitable to have $200 in 5c coins.

  43. Procedures for handling a float: • Collect the float from the manager or person responsible. This will vary according to the size and type of the tourism business in which you are employed. • Sign for the float. In a large business, you may be required to complete a float logbook with the following details: date and time the float was taken, name and signature, amount of float, time float is returned and amount and a witness.

  44. continued • Check that the amount of money received is the same as the amount noted on the float sheet. • Ensure that the till drawer or cash box in which the float is placed is closed and locked when not in use. • This should only be opened when transactions are taking place (eg depositing a customer's payment or giving change to a customer). • Close and lock doors when counting money. • Balance the float before handover. • Do not let other people use the float. • Never borrow from the float.

  45. continued • Reconciliation procedures • At the end of the day, there are many things to do. One of them is to reconcile your takings. In order to do this, you will need to follow your organisation's policy on reconciliation. • The float not only has to be counted but a reconciliation of the takings must also be carried out. This is to show any variance from the actual takings to the amounts included on the total of all receipts and refunds. • It is a good idea to reconcile your cash drawer with someone else so that any problems can be verified immediately.

  46. continued • Each business will vary but a typical procedure checklist is: • Count the float and remove it. • Count each of the following: credit cards, vouchers, petty cash dockets, travellers cheques, non-cash refunds. Record each total and then total the non-cash transactions. • Count each denomination of cash and cash refunds and record the total cash receipts. • Balance against the reading from your register or computer or the manual total calculated using an adding machine to total the value of all receipts and tickets or vouchers. • Fill in the reconciliation report.

  47. continued • In a perfect world, the reconciliation of receipts and payments would not have any discrepancies at any time. If there is any problem in the reconciliation process and the result is that there is a variance between your takings and your tape reading, ensure that you: • recount your takings • check foreign currency conversions • recount your non-cash transactions • recheck your readings • get someone else to check all of the above. • If it still doesn't reconcile, call your supervisor.

  48. Maintain Financial Records Sub-Title Definition of accounts and Folio used in Front Office Accounting The procedures for processing and tracking transactions The process of creating and maintaining accurate financial transaction. TAFE

  49. Front Office/Maintain Financial Records Prepared by Philip Maw