Front Office Accounting: Basics of Hotel

Summary

This EBG Bachelor video features Dr. Anguish and Vardar discussing the essentials of front office accounting in hospitality. They cover the significance of an effective accounting system in managing guest transactions, from pre-arrival to departure. Key topics include folio management, types of accounts, postings, vouchers, point-of-sale operations, ledgers, and the role of the visitor's tabular ledger in tracking daily sales and financial management.

Takeaways

• 🏢 Front Office Accounting is essential for managing hotel transactions involving guests and non-guests.
• 📊 It involves various stages including pre-arrival, arrival, occupancy, and departure to ensure accurate financial records.
• 💼 The system's effectiveness is crucial for collecting outstanding balances and depends on its usage and performance.
• 📋 Accounts folios, which are records of financial transactions, are maintained for guests and non-guests to track their financial activities with the hotel.
• 📊 T-accounts are used for summarizing financial data, with debits on one side and credits on the other, showing increases and decreases in account balances.
• 📑 Folio is a statement of all transactions affecting the balance of each individual account, including room charges, phone calls, and other services.
• 📄 Voucher systems are used for recording transactions made by guests, which are then posted in the guest folio for record-keeping.
• 📊 Point-of-Sale (POS) terminals ensure that all charges for goods and services are correctly posted to the guest folios.
• 📈 Ledgers, including guest and non-guest ledgers, are used to summarize accounts and are crucial for financial reporting like profit and loss accounts.
• 📊 The Visitor's Tabular Ledger (VTL) provides a daily summary of room sales, food sales, and other transactions, aiding in revenue analysis.
• 📅 Guest weekly bills are prepared to summarize a guest's account details and are used for settlement upon departure.

Q & A

What is the main topic of the video?

The main topic of the video is 'Front Office Accounting', which is a module from tourism and hospitality focusing on the basics of hotel accounting.

What is the importance of front office accounting in a hotel?

Front office accounting is crucial as it involves a set of procedures to monitor, record, and manage the transactions of guests and groups using the hotel's facilities and services. It ensures the collection of outstanding balances.

What are the stages involved in the guest cycle that an effective accounting system should perform?

An effective accounting system should perform during various stages of the guest cycle, which include pre-arrival (gathering reservation data), arrival (checking room rates and discounts), occupancy (tracking guest transactions), and departure (ensuring payment for services).

What is a folio in the context of hotel accounting?

A folio is a record-keeping device that stores information about guests' and non-guests' financial transactions. It resembles a T-account with charges on one side (debit) and payments on the other side (credit).

How does the balance in a T-account or folio get calculated?

The balance in a T-account or folio is calculated by subtracting the total of the credit side from the total of the debit side.

What are the two types of accounts that the front office has to maintain?

The front office has to maintain two types of accounts: guest accounts, which record financial transactions between the hotel and in-house guests, and non-guest accounts, which may be created for local business or former guests who did not settle their bills.

What is the purpose of a charge voucher in hotel accounting?

A charge voucher is used when a guest receives goods and services from the hotel but does not pay for them immediately. It records the transaction and is signed by the guest, then sent to the front office for posting in the folio.

What is a point-of-sale (POS) in a hotel?

A point-of-sale in a hotel is the location where guests purchase goods or services. It is any section of the hotel that collects revenue for its goods and services.

What is a ledger in hotel accounting?

A ledger in hotel accounting is a book where account summaries of both resident and non-resident guests are entered. It aids in preparing the profit and loss account and balance sheet of a hotel.

What is a visitor's tabular ledger (VTL) and what does it represent?

A visitor's tabular ledger (VTL) is a loose sheet form that records all guests' names, room numbers, and other details for one day. It represents the total daily sale of the hotel and is used for monthly, quarterly, and yearly sales analysis.

What is a guest weekly bill and when is it prepared?

A guest weekly bill is prepared for each guest and is presented on checkout for settlement. It is opened immediately on check-in by the receptionist and contains details of the guest's stay, charges, and payments.

Outlines

00:00

🏨 Front Office Accounting Basics

The paragraph introduces the concept of front office accounting in the hospitality industry. It explains that this system is crucial for managing transactions involving guests and non-guests using hotel facilities. The system tracks financial activities from pre-arrival to departure, ensuring payments for services rendered. It also mentions the importance of effective accounting for revenue management and the shift from manual to automated systems to reduce errors and improve efficiency.

05:02

📊 Understanding Guest and Non-Guest Accounts

This section delves into the specifics of guest and non-guest accounts. Guest accounts track financial transactions during a stay, while non-guest accounts handle charges for local business or incompletely settled accounts. It discusses the process of creating these accounts, the types of transactions recorded, and the procedures for payments and adjustments. The paragraph also introduces folios, which are detailed records of transactions affecting account balances, and the different types of folios used in hotel operations.

10:04

📄 Types of Postings and Vouchers

The paragraph explains the two main types of transactions posted to guest accounts: debits and credits. Debits include charges for services like rooms, restaurants, and telephone, while credits account for payments and adjustments. It also discusses various types of vouchers used in hotel operations, such as charge vouchers, correction vouchers, allowance vouchers, transfer vouchers, and paid-out vouchers, each serving a specific purpose in recording and managing transactions.

15:06

🛒 Point-of-Sale and Ledgers

This section describes the point-of-sale (POS) as the location where guests purchase goods or services, emphasizing the front office's role in ensuring these charges are accurately posted to guest folios. It also explains the concept of ledgers, which are books that summarize account information for both guests and non-guests. The paragraph distinguishes between guest ledgers, which track individual guest transactions, and non-guest ledgers, which handle accounts not settled at checkout or held by local businesses.

20:08

📈 Accounting Systems and Guest Weekly Bills

The final paragraph discusses different accounting systems used in hotels, ranging from manual to fully automated, each with its advantages and disadvantages. It highlights the importance of an effective accounting system in managing guest transactions and ensuring revenue. The paragraph also introduces the concept of a guest weekly bill, detailing its preparation and contents, which include guest information, services used, charges, and payment details. It emphasizes the importance of accurate record-keeping for efficient financial management.

Keywords

💡Front Office Accounting

Front Office Accounting refers to the procedures used to prepare, maintain, monitor, and record transactions of guests and groups using hotel facilities and services. It is central to the video's theme as it outlines the core processes involved in managing financial transactions at hotels. The script mentions that this system is crucial for collecting outstanding balances and consists of activities performed at various stages of a guest's cycle.

💡Folios

A folio in the context of the video is a record-keeping device that stores information about guests' and non-guests' financial transactions at a hotel. It is integral to the video's narrative as it explains how transactions are tracked and posted throughout a guest's stay. The script uses the term to describe how charges such as room service or phone calls are recorded and how payments are processed.

💡Point of Sales (POS)

Point of Sales in the video denotes the location where guests purchase goods or services within a hotel. It is relevant as it highlights the various touchpoints within a hotel where transactions occur, which are then recorded in the folio system. The script mentions that these points must ensure all charges are correctly posted to the appropriate guest folios.

💡Accounting Systems

Accounting Systems as discussed in the video are the mechanisms by which hotels manage and record financial data. They are key to the video's message as they provide the framework for handling transactions, from manual to fully automated systems. The script describes different types of systems, ranging from manual to semi-automated and fully automated, each with its own methods and implications for accuracy and efficiency.

💡Vouchers

Vouchers in the video are documents that detail transactions made by guests at various points of sale within the hotel. They are important for the video's theme as they serve as both a record of transactions and proof that a transaction has occurred. The script provides examples such as charge vouchers, correction vouchers, and transfer vouchers, explaining how they are used in the accounting process.

💡Guest Ledger

A Guest Ledger, as mentioned in the script, is a type of ledger that contains the accounts of all guests staying in a hotel. It is central to the video's narrative on how guest transactions are tracked and recorded. The ledger aids in preparing financial statements and managing accounts receivable, ensuring that all transactions are properly accounted for.

💡Non-Guest Accounts

Non-Guest Accounts are discussed in the video as a type of account that may be created for walk-in guests, local business people, or former guests who have not settled their bills. This concept is important as it broadens the scope of hotel accounting to include transactions beyond in-house guests, thus promoting local business and managing outstanding debts.

💡Debit and Credit Entries

Debit and Credit Entries are fundamental to the video's discussion on how transactions are posted to guest accounts. Debits represent charges to the guest, while credits represent payments or adjustments. The script uses these terms to explain the basic mechanics of how a folio's balance is calculated and how financial transactions are recorded.

💡Visitors Tabular Ledger (VTL)

The Visitors Tabular Ledger is a loose sheet form ledger that records all transactions for each guest in a hotel for one day. It is highlighted in the video as a tool for understanding daily sales and financial activity. The VTL is significant as it allows for a quick overview of a hotel's revenue streams and can be used for comparative analysis over time.

💡Weekly Bill

A Weekly Bill, as described in the video, is a statement prepared for each guest, typically presented upon checkout. It is relevant to the video's theme as it represents the culmination of a guest's financial transactions during their stay. The script explains that this bill includes details of all debits and credits, ensuring that the guest's account is settled accurately.

💡Pre-Arrival Stage

The Pre-Arrival Stage is a phase mentioned in the video that involves gathering data related to reservations, guarantees, and advance deposits. It sets the stage for the video's broader discussion on the guest cycle and the importance of effective accounting from the moment a reservation is made until the guest departs.

Highlights

Front Office Accounting is essential for managing hotel transactions.

The system tracks guest and non-guest transactions using accounts folios.

Effective accounting is crucial for collecting outstanding balances.

Pre-arrival stage involves gathering reservation and deposit data.

At guest arrival, room rates and applicable discounts are recorded.

Occupancy stage tracks guest transactions for billing.

Departure stage ensures payment for services used.

Accounts are maintained for each guest and non-guest for financial tracking.

T-accounts are used for accumulating and summarizing financial data.

Automation has reduced the manual use of T-accounts in modern hotels.

Journal forms are used in non-automated systems for recording transactions.

Automated systems list charges and payments in a single column with signs indicating balance changes.

Two types of accounts: guest accounts and non-guest accounts.

Folios are statements of all transactions affecting account balances.

Invoices in hotels serve as proof of payment for services.

Types of folios include guest folios, master folios, non-guest, and employee folios.

Postings to guest accounts are either debit or credit entries.

Vouchers document transactions and support charge recordings.

Point-of-sale terminals ensure charges are posted to the correct guest folios.

Ledgers summarize accounts of resident and non-resident guests.

Guest ledgers track financial transactions and account balances.

City ledgers handle non-guest accounts and are used for collections.

Accounting systems can be manual, semi-automated, or fully automated.

Visitors Tabular Ledger (VTL) provides a daily summary of hotel sales.

Guest weekly bills are prepared for结算 upon departure.

Transcripts

[Music]

welcome to EBG bachelor this is doctor

anguish and Vardar

from department of tourism and hotel

management Kurukshetra musty crook

Chaitra today I'll be taking about

module from tourism and hospitality

front office operations and management

and the model is front office accounting

basics of hotel accounting in this

chapter we'll be learning various

aspects related to accountancy such as

front office accounting accounts folios

vultures Point of Sales Ledger's

accounting systems Visitors tabular

ledger guests weekly bill and understand

important forms and formats used in

accounting basics of photo accounting a

front office accounting system is a set

of procedures used to prepare maintained

monitor record the transactions of

guests and groups and other non guests

using the hotel facilities and services

the front office ability to collect

outstanding balances depends upon the

usage and performance of the accounting

system followed by hotels and if a

effective accounting system consists of

performed during various stages of

guests cycle at the pre-arrival stage a

guest accounting system gathers data

related to reservations guarantee and

any advance deposits at the time of

guests arrival the accounting system

looks for room rates assigned and the

Texas discounts applicable at the

registration during the occupancy stage

the transaction of the guests are

tracked and posted to the folios lastly

at the departure stage guests accounting

system ensures payment for facilities

and services available the financial

transaction of CD guests or non guest

accounts may also be proceeded as but

the parameters of front office

accounting it helps in promoting local

business the non guest accounts also

include a

of former guests who did not settle

their respective bills whereas the

responsibility of collecting non guest

accounts shits from front office cashier

accounting division a front of a system

generally creates and maintains and

accounting record for each guest and non

guest account track and record financial

transactions throughout the guests cycle

and ensuring control over cash and

non-cash transactions front office

accounting when it comes to accounts an

account is a system of accumulating and

summarizing financial data on a form or

a sheet of computerized system it

contains and stores the various business

transactions held during various stages

of guests stay in the hotel front of

accounts are record-keeping devices to

store information about guests and non

guests financial transactions an account

is written form resembles letter T and

is called a t account with charges on

one side which means the debit part and

the payment on the other side which

means the credit part of the account in

present times the growing use of

automation in front office has

diminished the use of T accounts on the

left-hand side of the T charges are

posted which shows increase in the

account balance and the payments are

posted on right hand side denoting

decreases in the account balance the

account balance is calculated by

subtracting right side total from the

left side total of the t account front

office documents typical journal form in

non automated or semi-automated

record-keeping system a journal contains

following information description of

charges that is the debit part payment

that is the credit part and the balances

if any in fully automated system charges

and payments may be listed in a single

column the minus and the plus signs will

indicate

the decrease or increase in the account

front office has to maintain and take

care of two types of accounts number one

guest account it is the record of

financial transactions between hotel and

in-house guests such accounts are

created at the time of guests guaranteed

reservation or add the registration of

the guests in the hotel during the stay

the front office looks for any

transactions held by guests and post the

same in guest folio the payments of the

accounts is gently taken at the checkout

stage of the guests but in some cases a

guest may be requested to make partial

or full payment during any time of

guests cycle it may be seen when a guest

crosses house limit set by the hotel for

every individual guests the other type

of account is non guest account in order

to promote local business and corporate

business hotel might extend charge

privilege to such guest groups and for

non guest accounts may be created non

guest accounts may be formed even for

those guests who do not settle their

accounts completely hence changing their

status from guests to non guests the non

guest accounts are generally billed

monthly by the hotel accounting section

the other part of accounting is folios a

folio is a statement of all transactions

affecting the balance of each individual

account it lists the debits and the

credits of your charges for example room

charge phone calls

many of our laundry services room

service valet flourish shop spa extra

the invoice in hotel is no different

than a invoice for any other goods or

services it is simply proof of how much

against have paid it is gently opened at

the time of reservation or once the

guest registers with the hotel at

chicken at settlement the guest folio is

to be returned to zero balance by any

mode of payment the process of recording

transactions on folio are termed as

postings

now types of folios first type of folio

is guest for you it is an account

assigned to a single hotel guest

all transactions between the hotel and

the guest are recorded into the guest

folio other is master folio it is an

account assigned to more than one guest

or guest rooms usually for groups that

is travel agents or company the other is

non guest or semi folio it is a Hotel

folio that contains records of a walk-in

guests or non gas business or agencies

with charge privileges non guests also

include persons utilizing facilities

like spa health club pool extra the

other is employee folio it has an

account assigned to hotel employees with

charge privilege all transactions

between the hotel and the employee are

being saved into this folio types of

postings there are two types of

transactions that are posted to the

guest account they are debit and credit

entries most importantly the debit items

include room charges restaurant charges

coffee shop charges bar charges

telephone charges laundry used for hotel

facilities etc example health club

business center and transportation

credit entries include pre payments

payment for part of the bill during

state payment for final settlement

amendments to the bill next part is

voucher these are documents that have

details of transactions made by guests

from various point of sales in hotels

like room service restaurant extra the

water is sent to front office for

posting in the guest folio and record

keeping virtuous act as a supporting

document of the transactions happen

between the hotel and the guest a

voucher also acts as a proof that a

transaction has taken place in the hotel

charged vouchers correction vouchers

allowance Watchers

transfer vouchers and paid out vouchers

are examples of voters made and made at

front-office

most automated systems require only

futures are the terminals interfaced

with property management system are

capable of electronically transmitting

transactions information directly to

electronic folios first charge voucher

the guest receives goods and services

from the hotel but does not pay for them

immediately known as deferred payment

transaction wherever the transaction

occurs same has to be communicated to

front office for posting in folio and

the same is recorded on a charge voucher

duly signed by the guest the charge

voucher is also called as an account

receivable voucher next is correction

vouchers it is an error found in a guest

folio an account correction transaction

corrects the same it has to be carefully

done on the same date of the business

day an account correction can either

increase or decrease an account balance

example if a charge is wrongly posted as

higher than the actual rate it can be

corrected on the same day after entering

the details of correction in a

correction voucher next is allowance

watcher and allowance watcher requires

management approval they are generally

of two types one type of allowance is a

compensation given to a guest for poor

service or dissatisfaction related to

goods or services etc the other type of

allowance is a correction to a posting

error on an existing account after the

close of business the allowances given

must be documented with the use of an

allowance watcher another is transfer

voucher a transfer voucher is used when

the account balance or account entry is

transferred or shifted from one folio to

another folio an account transfer may

also occur when a guest checks out by

paying through credit mode the guest

outstanding account balance is

transferred from a guest account to a

non guest account through the use of a

transfer voucher

next is paid out voges or visitor's paid

out a guest may sometimes request

services which are not available in

hotels in such cases the hotel will

arrange those services from outside the

organization the staff will arrange and

pay for these services and notify

reception or kasher of the charges to be

added to the guests folio it is cash

paid out by the hotel on behalf of the

guests petty payments like take Sofia

cinema tickets purchase from outside

hotel posted estra are made by the front

desk a visitor's paid out voucher is

issued on guests name and his signature

is collected and the amount is debited

in the guests folio next important part

in front of the counting is

point-of-sales the term point-of-sale

denotes the location at which guests

purchases goods or services in hotel

property any section of a hotel

collecting revenue for its goods and

services is considered as point of sale

the responsibility of front office is to

ensure that all charge purchases at

these points are posted to proper guests

folios guests operated device like

minibar in room vending are even

considered as point-of-sale and the

transaction hell is posted in folio and

in case of fully automated system the

charges gets directly posted to the

individual folio of the guests the

automated system helps in reducing the

time and may be more accurate to post

the services with minimum errors the

hotel offers various goods and services

are different locations in the hotel and

require proper posting and documentation

of sales transactions point-of-sale must

provide some basic information when

posting in a charge through a remote

terminal or submitting a voucher or

transaction number the amount charged

room number name of the point-of-sale

like room service health club extra

description of charge like beer massage

extra

the signature of the guests and the

employees identity submitting the charge

posting through an automated terminal

only requires the guests signature on

the voucher or sales slip in case of any

dispute regarding the transaction posted

next important part in accounting is

Ledger's a ledger is a book in which the

account summary of both resident and

non-resident guests are entered the

front office ledger is a collection of

front office account folios they are the

power of accounts receivable ledger and

account receivable ledger represents

money owned to the hotel moreover this

ledger aids in preparing the profit and

loss account and balance sheet of a

hotel front office accounting system

separates accounts receivable ledger in

two groups the guest ledger and the non

guest ledger when it comes to a guest

ledger a guest ledger is a type of

ledger that has the accounts of all the

guests staying in a hotel or guests who

have sent advance deposit all financial

transactions made by a guest are

recorded on to guests folio open at the

time of registration to assist tracking

guests account balances this ledger is

also known as translate or room ledger

guests who make appropriate credit

arrangements at registration may be

extended privileged to charge purchase

to their individual account folios

guests may also pay against their

outstanding balance at any time during

occupancy guests financial transactions

are recorded in guest ledger accounts to

track guest account balances some of the

accounts of the resident guests may be

settled by their company travel agency

or airline company nexus city ledger the

city ledger is also known as the non

guest ledger and it is the collection of

non guest accounts if a guest account is

not settled by

guest info in full at checkout the

guests folio balance is transferred from

the guest ledger to the city ledger in

the accounting division for collection

post departure of the guest City ledger

could also include accounts held by

local business people using hotel

facilities and services for

entertainment or business meetings

guests who walk out of the hotel without

settling the outstanding balance guests

who have sent pre payments to the

guarantee they are booking but have not

arrived or checked in

even a skippers outstanding balance is

transferred to city ledger with the hope

that the amount may come through another

important part is accounting system the

format's of guests and non guests

account folios may be different

depending upon the front office

record-keeping system the process of

guest accounting is operated either

manually that is non automated in which

in this operating system all the phase

involved in accounting process are

carried out by the staff guest folio in

a manual system contain a series of

column for listing individual debit and

credit entries accumulated during

occupancy at the end of business day

each column is totaled and the ending

balance is carried forward as the

opening folio balance of the following

day the entire system is prone to

emissions and computation errors another

drawback is handling and re handling of

numbers date this type of system is

useful for small hotels only where the

workload is not much another system is

mechanical system or semi automated

system this system is used by hotels

which are medium-sized or large but yet

don't have automatic machines like

computers usually they use a combination

of office machines clerical equipment

and manpower to operate these systems

guest transactions are printed

frequently on a machine posted folio the

information recorded for each turn

action includes the date Department or

reference number amount of the

transaction and new balance of the

account the folios outstanding balance

is the amount the guest owes to the

hotel or the amount the hotel owes the

guest in the event of credit balance at

settlement if the posting is done by a

mechanical equipment it does not retain

individual folio balances this means

that each accounts previous balance must

be re-entered each time an account

posting is made to the folio and next is

through computers that is fully

automated system in this system

comprises of computers and other

electronic devices located at every

point of sale and interfaced with the

main cashier at the front desk all tasks

done manually is easily done by

automatic machines whether it's posting

auditing correction of errors etc the

machines are fast and practically no

possibility of late charges necessary

steps such as sorting of vouchers

identification posting code and

reference code posting are automatically

carried out since computers are machines

operated by humans it is obvious that

the accuracy will depend upon the

software developed and the efficiency of

the staff operating next important part

in accounting is visitors tabular ledger

that is VTL a visitor's tabular ledger

is in a loose sheet form one vtl is

prepared for all the guests for one day

that mean all guests names room numbers

extra staying in the hotel are entered

in one visitors tabular ledger in case

all the names cannot be entered in one

visitor tabular ledger then one more

sheet can be added for the same day from

visitor tabular ledger

Hodel can know the total room sale food

sale breakfast sale extra for one day

the total sale shown by the VTL is the

total daily sale of the hotel at the end

of the day the VTL is sent to Accounts

Department account Department then finds

out Vee

we monthly quarterly yearly sale this

sale can be compared with the last year

sale or with the busted sale VTL has

also debit side and credit sides instead

of having left side as debit and right

side as credit the VTL z-- upper portion

is debit side and the lower portion is

credit side all the debit watches are

posted in the debit side of the visitor

tabular ledger in the respective columns

the credit vouchers are entered on the

credit side of the ledger all allowances

discounts cash deposits credit balance

carried forward are entered in the

credit side of the visitors tabular

ledger discount and allowance offered

must be duly authorized otherwise

cashier will be responsible to pay next

in next important part is guests weekly

bill guess weekly bill is prepared for

each guest and is presented on checkout

for settlement it is called a weekly

bill as for one week one bill is

prepared there is no hard and fast rule

that a bill has to be prepared for one

week

in case majority of guests in a hotel

stay for three days then one may adopt a

three day bill if a guest is beyond

three days then another bill is attached

the guests weekly bill is opened

immediately on chicken by the

receptionist the copy of this guests

registration card is stapled with a

weekly bill folio the gasher can refer

to guests signature on guests

registration card and compare his her

signature with the voucher if signature

tallies then the cash and debits the

watcher to guess account otherwise

he/she may send the bill back to the

outlet with a remark that the signature

does not tally all the weekly bills are

placed numerically in the vertical file

and it helps in taking out a particular

bill instantly the vouchers after

posting in the guest weekly bill should

be kept in the bills rack a guest weekly

bill generally contains details

jazz email room number name of the guest

nationality of the guests designation of

the guest office address emails

telephone number permanent addresses

date and time of arrival date and time

of departure type of room the number of

packs it had the rate allotted room

allotted plan billing instructions like

credit card the credit card number the

expiry date of credit card and the

person who are taking the booking it

even contains details of debit and

credit the allowances incurred in the

guest account the ledger details the

transfer voucher details and the balance

if any well to summarize the whole unit

during the state guesses offered various

facilities and services like room food

and beverage health club telephone extra

for each of these services the payment

is expected either at the time of

service rendered or on or after the

departure time in order to present the

final bill with all voters duly debited

a proper record of all the voters is

recorded in the guests folio and in

guests ledges the front office ability

to collect outstanding balances depends

upon the usage and performance of the

accounting system followed by the hotel

an effective accounting system consists

of performed during various stages of

guests cycle at the pre-arrival stage a

guest accounting system gathers data

related to a reservation guarantee and

any advance deposits are the time of

guests arrival the accounting system

looks for room rates assigned and the

Texas or discounts applicable are the

registration during the occupancy stage

the transactions of the guests are

tracked and posted to the folios lastly

at the departure stage guests accounting

system ensures payment for facilities

and services available for watching ABG

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