Front Office Accounting

1. Front Office Accounting Unit - III Heritage Institute of Hotel & Tourism 1

2. Introduction The term Front Office Accounting from Hotel point of view means knowledge of what is to be received from the Guest and what is to be paid to the Guest. To have an update information of the same it is important that at all during the Guest Cycle an efficient system is used. Heritage Institute of Hotel & Tourism 2

3. Various Front Office Ratios House Count: (Total No of Guest stays in a particular time.) 1. Previous night House Count + Arrivals – Departures Or 2.Single Rooms + 2 X (Double Rooms) + Extra Beds Heritage Institute of Hotel & Tourism 3

4. Various Front Office Ratios Room Count: Total No of Rooms occupied in a particular day Total No of Available Rooms – No of Vacant Rooms Or Total No of Rooms Occupied Previous Night + No of new Arrivals – No of Departures. Heritage Institute of Hotel & Tourism 4

5. Various Front Office Ratios Occupancy Percentage: Relationship of the no of Room sold to the no of Room available for sale. This measures the success of the sales department. No of Room sold ------------------------------ X 100 No of available for Sale Heritage Institute of Hotel & Tourism 5

6. Various Front Office Ratios Multiple Occupancy Percentage: No of Room Sold with 2 persons or more occupying each Room is called Multiple Occupancy. House Count – No of Room sold ----------------------------------------- X 100 No of Room sold Heritage Institute of Hotel & Tourism 6

7. Various Front Office Ratios House Count ------------------------ - 1 X 100 No of Room sold Average no of Guest per Room ( AGR) House Count --------------------- Room Count Heritage Institute of Hotel & Tourism 7

8. Various Front Office Ratios Single Occupancy Percentage: No of rooms occupied by one person is called Single occupancy. House Count 2 - ------------------------ X 100 No of Room Sold Or 2 X (No of Rooms Sold) – House Count ----------------------------------------- X 100 No of Rooms Sold Heritage Institute of Hotel & Tourism 8

9. Various Front Office Ratios Bed Occupancy Percentage: (Guest Occupancy or Sleeper Occupancy) No of Bed sold ------------------------------------ X 100 No of Bed available for sale Heritage Institute of Hotel & Tourism 9

10. Various Front Office Ratios Average Room Rate or Daily Rate (ARR/ ADR): Total Room Revenue ------------------------------- Total no of Rooms Sold Rev Per: (Revenue Per available Room): Total Room Revenue ---------------------------------------- Total Rooms Available for Sale Heritage Institute of Hotel & Tourism 10

11. Various Front Office Ratios Average Revenue Per Guest (ARPG / ARG): Total Room Revenue ---------------------------- House Count Heritage Institute of Hotel & Tourism 11

12. Various Front Office Ratios No Show Percentage: This is the percentage of those Guest who did not arrive in spite of having Confirmed Reservation. No of (DNA) Did Not Arrive Guest ------------------------------------------------ X 100 No of Confirmed Reservation Guest Heritage Institute of Hotel & Tourism 12

13. Front Office Accounting Also called as Guest Accounting system and it is an essential process to monitor and chart the financial transaction of Resident and Non-Resident Guest. Heritage Institute of Hotel & Tourism 13

14. Objectives and Aims The main objectives of Front Office Accounting Process is to ensure that all financial transaction maid by the Guest are recorded and settled in Guest account and are monitored, controlled and Audited time to time to avoid any discrepancy, loss of Revenue and possible disputes with the Guest. Further its objectives is to collect payment for all Guest transactions. Heritage Institute of Hotel & Tourism 14

15. Types of accounts maintained by Front Office Cashier Resident Guest account. City accounts. Management accounts. Heritage Institute of Hotel & Tourism 15

16. Types of Financial Transactions • Accounts Receivable. • Accounts Payable. • Cash Transaction. Heritage Institute of Hotel & Tourism 16

17. Basics of Keeping Accounts • Debit and Credit : Dr. Cr.. Dr. Cr. Rs. 750 Rs. 750 Debit Rs. 750 Credit Rs. 750 Balance 00

18. Account Receivable transaction (Debit items) Room charges Restaurant or food and beverage bills Telephones Laundry Account payable Transaction (Credit Items) Prepayments Payment for part of the bills Payment for final bill. Types of postings or transactions for a guest

19. Functions of Front Office Account system Creation and Maintenance of guest folio. Tracking financial transaction of the guest. Maintain an accurate and current records of all guest transactions. Monitoring credit limit of the guest. Provide management information on departmental revenue. Maintaining effective control over cash and credit transactions. Heritage Institute of Hotel & Tourism 19

20. LEDGER • Guest Ledger: A ledger that contains all detail of financial transactions between a hotel and a resident guest. It is also known as Bill Folio Transient Ledger or Guest Ledger. • Categories of Folios: 1. Guest Folio 2. Master Folio or Pay Master (PM) 3. Non Resident Folio 4. Employee folio 5. Split Folio Heritage Institute of Hotel & Tourism 20

21. City Ledger • City Ledger : A ledger that contains the collective accounts of all non-resident individuals/agencies to whom hotel provide the credit facility. • Credit always follow a contract with company or agencies who is availing the credit facility. • The settlement of credit bills always follow credit note, voucher, VPO, SPO, and Billing letter (BTC).

22. Presentation and Settlement Of Bill • Check out request is received at FO/Bell desk. • Bell boy fills up the departure errand card. • Bell boy transfers the luggage to lobby. • FO sends DNS to respective departments. • FO cashier updates the guest folios. • Guest arrives at front desk and handover key. • Cashier wishes the guest. • Cashier prints out the room bill. • Guest reviews the bill.

23. Presentation and Settlement Of Bill • Re-check for the mode of payment. • Settlement of the bill by Cash, Credit Card, VCHR, BTC. • Fill the feedback form and say good bye. • The front desk makes the gate pass. • The front desk clears the bill slot for the guest checked out. • The Front Office updates the Arrival/Departure register.

24. Paid Out • It is a process by which Front Office cashier provide money to the guest or on behalf of the guest to someone else. • Kinds of Paid Outs: 1.Cash paid out 2. Paid out at check out 3. VPO / Other paid outs. 4. Advanced to Concessionaire

25. House Bank • Some of money given to Front Office cashier for daily operations such as: • Foreign Encashment • Paid Outs • Petty Cash • This is also called as Float Money.

26. House Bank • Overage • Shortage • Par • Turning • Due Bank • Refunding Due Bank

27. Follow-up on Bad Debts, Late charges Assigning rate & tariffs Checking methods Of payments Front Office Accounting Cycle Establishing Credit limit Settlement of Master folios by Company Creation of accounts Verifying Accounts To co After Departure Pre Arrival & Arrival Creating folio Settlements of accounts Posting of Cr/charges On Departure During Stay Audit Monitoring Credits Maintenance of accounts Settlement of Guest folio Heritage Institute of Hotel & Tourism 27

28. BIBLIOGRAPHY • Textbook of Hotel Front Office Management & Operations by Manoj Kumar Yadav. • Check-in Check-out Managing Hotel Operations by Gary K. Vallen and JoromeJ.Vallen. • Managing Front office Operations byMichael L KasavanaPhd,RichardM.Brooks. • Hotel Front Office Training Manual by SuvradeepGaurangGhosh.