front office

topic: Check Out Procedure
                                                Front office cashiering

Cash Banks/cash float
A cash bank is the specific amount of cash assigned to a cashier at the beginning of his/her shift so that he/she can handle the various transactions that occur during a particular workshift. The amount is to be used for making change when guests settle their accounts, processing paid outs and for providing other cash related services.
The Bank limit is the amount the bank should have at the beginning of the shift .
Cashiers have to sign for their bank at the beginning of their shift.
At the end of a workshift, each front office cashier is solely responsible for depositing all cash, cheques etc. The cashier has to separate out the amount of the initial bank and the place the remaining cash, cheques received in a specially designed front office cash envelope. The cashier itemizes and records and records the contents on the outside of the envelope after which it is sealed and dropped into the front office vault in the presence of at least one other employee. Both employees are required to sign a log attesting that the drop was done and stating the time of the drop.

Net Cash Receipts :
It can be defined as the total amount of cash, cheques and other negotiable items such as prepaid coupons present in the cashier’s drawer minus the initial bank and paid-outs if any.
This term refers to the difference between what the cashier took in and what was paid out.

Overages:
An overage occurs when after the initial bank is removed the total of the cash, cheques, negotiables present in the drawer is greater than the net cash receipts.




Shortages:
A shortage occurs when the total amount of cash, cheques and negotiables present in the cahier’s drawer is lesser than the net cash receipts.
Due back/Due bank:
A due back occurs when the cahier accepts many cheques and large bills during a shift making it difficult to replenish the initial bank without including the cheques or large bills. Front office due backs are normally replaced with small bills and coins before the cashiers next workshift thereby restoring the cash bank to its full amount.

REPORTS MAINTAINED FOR CAHIERING
A} Front office cash sheet:
Records each receipt or payment of cash done by the cashier.
It has separate columns for guest account, non-guest account and miscellaneous transactions.
The information on this sheet is used to reconcile actual cash at hand with the total of transactions at the end of the shift
All payments and receipts should be recorded in separately allocated columns of the sheet.
All receipts are recorded on one side such as money received from guests during departure or stay, from non-guests and any other miscellaneous source while cash payments such as visitor’s paid out, are recorded to the other side .
B} Front office cashier’s report
Each cashier whether at the front desk or any other outlet such as bar, restaurant, or any other point of sale makes a daily cash report. These reports are audited and the total cash received is combined in a daily deposit. The funds are audited by the night auditor during the night.





TYPES OF TRANSACTIONS AT THE FRONT DESK

1) Cash Payment:
Cash payments made at the front desk to reduce a guest’s net outstanding balance are posted as credit transactions to the account thereby decreasing the outstanding balance of the account.
The front office uses a Cash voucher to support this transaction.
Only cash payments made by the guest at the front desk will appear onto the folio. When cash is paid for goods or services at a location other than the front desk, no entry will appear on the account folio. The “account” for that transaction is opened, increased and settled at that point of sale itself thereby eliminating the need of front office documentation and posting.
Personal cheques and traveler’s cheques are treated as cash by the front office staff. The name address telephone number has to be preprinted on the cheque. The bank account number as well as the bank routing number should be clearly printed on the bottom of the cheque. The cheque should be endorsed with a special stamp requiring payment to the hotel only. The signature of the guest on the cheque should be verified by the cashier with a photo id proof. Finally the proof of identification should also be recorded on the check such as driver’s license number.
Traveler’s cheques are required to be signed by the guest at the time of handing it over to the cashier. The cashier should verify this signature against the original on the cheque
Cashiers should be sure that the payment is in local currency and not in foreign currency A small fee is charged to the guest for currency conversion.
Most hotels use a cheque guarantee service to ensure that the cheques they accept are good. When using a guarantee service, the account number, bank routing number, cheque number and the amount are provided to the guarantee service. Guarantee services charge a fee to the hotel but hotels in most cases absorb this fee as a cost of doing business. Traveler’s cheques donot require guarantee services as long as the cheque is properly completed, signed, counter-signed and endorsed.

2) Charge Purchases:
Charge purchases refer to deferred payment transactions. In deferred payment transaction, the guest receives goods and services from the hotel but does not pay for them at the time they are provided. A charge purchase transaction is a {debit} increase the outstanding balance of a folio.
These transactions are supported by means of a charge voucher which is used for proper folio posting.
For example when a resident guest dines in one of the restaurants in the hotel he signs a check/bill {charge vouher} indicating that he will pay the amount later. The voucher is made in duplicate and one copy is sent to the front desk folio posting.
If the Point-of-sale terminals are linked to the front desk systems, the staff at the point of sale can query the front office system for guest verification, as well as post charges directly to the guest account.

3) Account Correction:
An account correction transaction resolves a posting error to the folio. By definition an account correction is made on the same day the error is made before the close of the business {that is before night audit}.
An account correction can either increase or decrease an account balance depending on the error. For instance, an account would need to be adjusted if the front desk agent mistakenly posted a lower than normal room rate for a particular guest room. So the account correction would increase the guests outastanding balance while if a charge higher than the normal room rate was accidentally posted to the folio, account correction would then decrease a guest’s outstading balance.
A correction voucher is used to document an account correction transaction.

4) Account Allowance:
There are two types of account allowances:
1) This type of account allowance decreases a guest’s outstanding balance due to compensation of poor services or rebates or discounts. Allowances may be given to airline crew and in some cases groups. These allowances are strictly controlled and therefore need authorization from the airline or group sponsor, these sponsors give a guarantee to reimburse these amounts to the hotel upon producing the necessary documentation.
Procedure for issuing allowances:
- Get instructions from the front office manager or lobby manager {who deals with airlines}
- Check names and designations of the crew or group members and determine the allowances to be given. Build it into guest folios. 
- Take out the required number of envelopes and write down the name, designation, amount of allowance and room number {if pre-registered}
- Upon arrival of the group check guest folios for the amount of allowance authorized by management. Guests claiming allowance but who donot have authorization are referred to the lobby manager.
- Ask each member eligible for an allowance for proof of identification
- Fill in details into allowance voucher.
- The voucher is signed by the lobby manger and guest and by cashier
- Hand over the original copy to the guest
- The second copy is attached to the cashier’s report and filled in the paid column.
- The third copy is maintained in the Allowance voucher book

2} The second type of allowance corrects a posting error detected after the close of the business day {i.e. after night audit}. Such an error will be separately entered into accounting records of the appropriate revenue centers, thereby correcting their accounting records. In this case also an allowance voucher is filled up.

5) Account  transfer:
This transaction involves two different accounts. For example when one guest offers to pay a charge posted to another guest’s folio, the charge will have to be transferred one account to the other.
An account transfer may also occur when a departing guest uses a credit card to settle his/her account. The guests outstanding account balance is transferred from a guest account {folio} to a non-guest account{folio} through the transfer voucher.

6) Cash Advance/ Visitor’s Paid out:
They refer to cash payments made on behalf of the guest or the management for any external services rendered to them.
Cash Advances/Paid-outs are debit transactions since they increase a folio’s outstanding balance.
Such expenses are usually taxi charges, porter charges, emergency medical expenses, ticket confirmation charges, floral delivery etc.
These payments are made from the cash bank received at the beginning of the shift by the cashier.
Paid outs are only made in local currency.
Procedure for handling paid-outs:
-      Confirm the name, room no. and identity of the guest
-      Find  out details for which the paid-out is being made
-      Fill in details into the paid-out voucher. Every voucher is numbered to maintain control.
-      Get voucher authorized by the lobby manager.
-      The guest signs in acknowledgement.
-      Make the payment in cash to the guest
-      Fill in the details in the paid-out column of the front office cashier’s report.


       topic: CONTROL OF CASH AND CREDIT

        The hotel industry is the only business where the guest enjoy the benefit of credit facility right from the time he comes to the hotel and where the business man whose primary objective is to collect revenue when the transaction is over is deprived of that and gets benefit only on or after the departure of the guest and that too sometimes after a period of 30-40 days in normal course. This results in the blocking of money and hence creates a situation of greater risk and this demands higher investment and hence it is important that the hotel takes some definite and concrete steps to ensure that the guest accounts will be settled in full at the agreed time therefore protecting the hotel from bankruptcy due to bad debts. The hotel should control the credit of its guest to also insure a healthy cash flow. Cash flow means the money which moves in and out of the business. The term credit control refers to the various measures taken by the hotel to ensure that the guest settle their account in full either themselves or someone else on their behalf {which may be a credit card company, airline company, corporate office, a travel agent or person}within a specified period of time.

Various steps are to be taken by different front office personnel at different stages of the guest cycle that will help in credit control.

Credit control procedures used for different guests at the front desk during check-in:


Guest paying by credit card:

-    Guest is required at the time of check-in to present his credit card
-    Credit card is imprinted
-    Name on the card is tallied with the name on registration card
-    Check expiry date of the card
-    Check the hotlist to check that it is not blacklisted
-    Check that the hotel accepts the type of credit card presented by the guest

Guest paying by travel agent voucher:

-    Guest presents travel agents voucher at the time of check in
-    These are prepaid vouchers
-    These are then tallied with the record copy the travel agent has sent the   hotel in advance at the time of reservation
-    The receptionist will then attach this voucher to the guest registration card and then sends it to the cashier who will open the folio and mark the instruction as required on the folio

Guest checking in with tour groups

-    Groups are usually prearranged and pre registered and the credit procedure is established between the tour operator and the hotel much prior to arrival
-    The cashier in such a case will open a master folio in case of group charges
-    The POS cashiers are informed not to make any credit sales transactions to any group member for their personal incidentals/expenses and charge cash for the same

Guests from Airlines:

There are two types of guests sent by the airlines:
Stayover guests: These guests are provided with PSO {Passenger Service Order} or MAO {Meal and Accommodation Order} which detail the services and facilities that will be provided by the hotel to such guests and the airline will pay for the same. The folio in this case will be signed by the guest at check out and the bill is forwarded to the airline company for payment

Crew: These guests have to sign their bills on checkout which are forwarded to the airline for payment. Services and facilities which are provided by the hotel and paid for by the airline are mentioned in the contract which the airline makes with the hotel

Guests having all their charges billed:
-    Look through the billing instructions given at the time of reservation to check what charges are covered by guests and what charges are paid by the company.
-    If the room charges are to be billed to company and other incidentals are paid by the guest himself such as laundry, food etc. confirm with the guest at the time of check in itself how he will pay his incidentals and the same instruction must be marked on the folio.
-    Examples of such guests are members of FHRAI and TAAI. In such cases a split folio is used where charges are charges are distributed into two {between company/organization and individuals} one for rooms and the other for incidentals.


Guest with scanty baggage:
-    These guests are not allowed to purchase anything on credit. All payments are to be settled in cash unless well known to the hotel.
-    An advance/deposit is taken from them at the time of check-in to be adjusted against room and incidental charges.
-    The registration cards, folio and arrival notification slips will have APC {All payments cash}.
-    A credit limit is also fixed in case of well known guests with scanty baggage and the moment his outstanding balance reaches the limit the night auditor prepares a slip which tells the guest to deposit some cash before making any new credit transactions.

Walk-in/chance guests
-    To avoid any possibility of a skipper and hence loss of revenue, the hotel will usually ask for an advance payment or deposit at the time of check-in.
-    The deposit should be enough to cover the room charges and incidental charges.

CREDIT FACILITY FOR COMPANIES/CORPORATIONS:

Hotels have to check the solvency status of the company first and also cross check with the company’s banker before listing the company on the list of credit approved companies of the hotel.
The account department maintains this list and is sent to the other departments of the hotel such as reservations, front desk, bills, sales etc.
Different limits are set for different companies, depending on the size of the company, volume of business provided and the reputation of the company. For example a company with reputation of prompt payment shall get a higher credit limit rather than a newer and smaller company

CREDIT CONTROL DURING STAY OF A GUEST:
A credit limit is set for the guest depending on his credit profile and then in turn must be marked on his folios. The front office must monitor guest and non-guest accounts to ensure they remain within acceptable credit limits. Typically, a line of credit is set for guests who establish charge privileges during the reservations or registration process. Guests who present an acceptable credit card at registration may be extended a line of credit equal to the floor limit {credit limit set by the issuing credit card company}. Guest and non-guest accounts with other approved credit arrangements are subject to limitations established by the front office. These internal credit restrictions are called house limits.

Front office management may need to be notified when a front office account approaches the house limit. Such accounts are called high risk or high balance accounts. The front office auditor, or night auditor, is primarily responsible for identifying accounts which have reached or exceeded predetermined credit limits. Front office management may request the guest to make a partial payment to reduce the outstanding account balance.

AFTER DEPARTURE ACTIVITIES:

If the guest settles his bill through credit card or airlines voucher or travel agents voucher or through a corporate company account his room account is zeroed out at the time of check out and the outstanding balance is transferred to the city ledger.
At the end of a specified period the hotel accounting department sends the bills statement to the concerned company for making the payment and it is expected out of the companies that they will make the payment promptly.
If they are late in doing so a follow up measure will be taken by the hotel requesting them to speed up the payment in case of further failure a strong reminder will be sent and if all these measures don’t produce any results a legal notice through a lawyer will be sent.

Hotels must ensure that the guests who are given credit facility from the hotel are able to pay their bill in full within the scheduled period of time and only then the hotel should fix a house limit. Usually the hotel’s credit policy allows credit to:
1)    Guaranteed payment reservation guests
2)    Company guarantee payment guests
3)    Credit card guarantee guests
4)    Deposit/advance payment reservation guests

PROBLEMS IN CREDIT CONTROL MAY ARISE IF:
1)    Guest is not explained clearly as to which credit cards/foreign currencies are accepted by the hotel.
2)    The guest is  not informed that if his bill exceeds the house limit he will have to pay the balance in cash
3)    Communication gap between accounts department and cashier or night auditor and cashier
4)    Negligence by the staff to look at the black list


CASH CONTROL:
-    All cash must be kept under lock and key and under the supervision of the cashier.
-    The cash bank/float given to the cashier is also controlled and a check is kept on the same
-    The cashier should take proper precautions when dealing with foreign currency
-    Whenever the guest pays in cash the cashier has to make a cash receipt and hand it over to the guest.
-    The cash collected everyday should be sent to the bank for deposit.

Cash control is important from the point of view of hotel as credit sales are usually discouraged.

PROTECTION OF HOTEL FUNDS:
- Cashiers should make frequent money drops to have minimum cash in  hand.
-    Cash drawers should be accessible to only one cashier at a time and should be kept closed when not in use.
-    Alarm systems should be installed in all areas of the hotel where cash transactions take place.
-    A consistent system for handling bank deposits and money pickup should be developed and followed.
-    Staff handling money like the cashier, security etc should be appointed only after strict scrutiny and cross checking with their previous employers. They should be rotated from time to time and a new combination of staff should be used.
-    They must also be trained to react in emergency situations.



topic: Checkout and Settlement

Check out and settlement are part of the final stages of the guest cycle.

It is the final phase of the guest cycle and examines the various activities involved in checkout and settlement.

Check out involves the front desk as also other departments such as housekeeping, bell desk, cashier’s desk, Point of sales etc. Main areas for a checkout are the belldesk and the cashier.

The FO performs at least 3 important functions during the checkout and settlement process.

•    It resolves outstanding guest account balances.
•    It updates room status information
•    It creates guest history records.

Guest account settlement depends on effective FO accounting system that maintains accurate guest folios, verifies and authorizes a method of settlement and resolves discrepancies in account balances. Hotels find it most effective to settle a guest account while the guest is still in the hotel.
Guest can settle the bill by paying cash, charging the balance to a credit card, deferring payment to an approved direct billing entity or using a combination of payment methods.
Most hotels require a guest to specify during registration an eventual method of settlement. FO should verify or confirm guest credit card or direct billing information before he/she arrives at the desk for check out.
Pre settlement verification activities ensure that the hotel will be paid for accommodation and services.

DEPARTURE ACTIVITIES AT VARIOUS DESKS:

1) At the Bell Desk:
During checkout a luggage outpass has to be obtained from the cashier stating that the guest has settled his account and returned the room key. Once this is received a departure errand card is made and filled out by the bell boy and will got to the guest room to bring down the luggage.
The bell captain will also make an entry regarding this in the bell captain’s control sheet.
On reaching the guest room the bell boy will announce himself, knock on the door enter the room on gaining permission. The bellboy will also ensure the following:
1.    Collect room keys from the guest
2.    Check the room for any possible damage to the property.
3.    Draws the curtains, locks the balcony.
4.    Checks bathroom and fittings.
5.    The guest is escorted by him to the front desk
6.    He puts a “room to be cleaned tag” card on the door after switching of the lights and air conditioner.
The departure room is then inspected by a housekeeping supervisor/ Room attendant to ensure that nothing is left behind by the guest. The housekeeping/ In room dining department will also check the minibar for anything consumed by the guest to be charged to the bill.

At the lobby the bell boy will:

Keep the guest’s luggage at the bell desk
Put hotel stickers and mark the luggage with “D” indicating departure luggage.
Collect the luggage out clearance slip from the reception and loads the luggage in the car/taxi.
Return the errand card to the bell captain which will then be entered onto the bell captain’s control sheet.

2) At the Reception desk:
The Front desk receptionist checks the list of expected checkouts for the day and will confirm with the guest his date and time of checkout.
Departure notification slips are printed to inform the other departments of the guest’s checkout.
In a manual system the room racks are updated. The departure register is also updated.
Checking for the mail messages and faxes.
Checking for safe deposit box or in room safe keys.

3) At the cashier’s desk:
1.    Verifying account information.
2.    Posting any remaining charges to the guest’s folio.
3.    Presenting the guest folio.
4.    Verifying the method of payment.
5.    Processing the account payment.
6.    Securing the room key.
7.    Updating the room status.

The procedures used will vary among Front Offices depending upon hotels level of service and degree of automation. Some Front Offices offer automated or express check out.

Traditionally at check out guest is presented a final copy of his/her account folio for review and settlement. FOA should confirm how the guest intends to settle the account. Guest may establish credit by presenting a credit card but may choose to settle his bill by cash or travelers cheques. VIP or special guests or corporate accounts should not be asked for settlement if their account is marked that all charges are to be Direct Billed.
FOA should bring the guest account balance to zero, called zeroing out. When guest pays by cash or credit card, hotels assume that the payment is full and close the folio. If the account is to be paid through Direct Billing by the hotel, however the account is not brought to a zero balance because it must be transferred to the city ledger and billed through the account receivable system.

METHODS OF SETTLEMENT


A guest account can be brought to a zero balance in several ways. Methods of settlement include cash payment, credit card or Direct Billing transfer or combined settlement method.

I.    CASH PAYMENT IN FULL

Cash payment in full at check out will bring a guest account balance to zero. A cash receipt has to be issued to the guest by the cashier. The cashier should mark the folio paid. If the guest has produced a credit card at check in, the cashier should destroy the guest credit card voucher imprinted at registration when the guest pays the account in full with cash.
Guests paying in foreign currency should convert their money to local currency (some international currencies like $ are accepted). Hotels often charge a fee to convert currencies as banks charge the fee from the hotels. Currency conversion rates are displayed at the Cashiers counter or it can also be taken from business sections of newspapers.
Guests can also use traveler’s cheques to settle their bills. Traveler’s cheques are issued by banks and avoid the risk of carrying cash. At the time of settlement the cashier should confirm the identity of the guest from the safety and security point of view. Also there is no danger of them being stolen as they can be encashed only when the signature of the holder tallies with the signature signed at the time of issue. A foreign traveler’s cheque should be treated as foreign currency and the necessary records, statements and certificates must be maintained like in the case of foreign currency and should be sent to the Reserve Bank of India.

Difference between an ordinary cheque and a traveler’s cheque

Ordinary cheque  and  Travelers cheque
1.    For issuing a person should have a bank account (either current or saving).
 1.    No need of any bank account for purchasing and encashing of traveler’s cheque.
2.    Any amount can be filled in the cheque as they are blank.                                                                       2.    Have a fixed amount printed on its face and available in different denominations.
3.    Only one signature is needed of the holder.                                                                                             3.    Two signatures are required (one in the presence of the issuing authority and second in the presence of encashing authority).
4.    Ordinary cheques are valid only for 3-6 months.                                                                                     4.    Valid for indefinite period of time unless dated.
5.    These cheques can be crossed for account payee.                                                                                   5.    No such provision.
6.    No slip/list of lost, damaged or stolen cheques is issued by the bank.                                                       6.    Many banks issue a stop list for stolen and damaged cheques.
7.    Cheque may bounce as the balance in the account may be less than the cheque                                      7.    No such possibility as the amount is already printed on the face of the cheque.
8.    Not safe as someone might force the owner to sign the cheque.                                                           8.    Quite safe because the second signature have to be put in front of the encashing authority.

Procedure for accepting foreign currency:

•    Request guest passport and determine the credentials such as name and photo identification place of issue and date of expiry of the passport.
•    Confirm that the guest is a resident of the hotel by asking his room no. If the guest is a non-resident the permission of the lobby manager is obtained who will extend this facility to VIP’s and regular guests.
•    Receive the cash or traveler’s cheque in foreign currency.
•    Calculate the total amount of ocal currency to be paid by multiplying the foreign currency by the exchange rate displayed.
•    Fill in details of the foreign currency encashment certificate.
•    Request the guest to sign the foreign currency encashment certificate and compare the signature with the passport.
•    Request the guest to sign the traveler’s cheque if it is an instrument of exchange.
•    Give the total amount of local currency with the encashment certificate to the guest
•    Second copy of the certificate is attached to the notes or traveler’s cheques received
•    Third copy remains in the encashment certificate book.
•    Fill in details in the record of foreign currency transactions.
•    Fill in details of the foreign currency transaction in the cashier’s report.

II.    CREDIT CARD TRANSFER
Even though credit card transfer settlement brings a guest account to zero, the amount of the charge must be tracked until payment is actually received from the credit card Co.
 Credit card settlement creates a transfer of credit on the guest folio and moves an account balance from the guest ledger to a credit card account in the city ledger (non- guest ledger).
(Procedure).
Guest signature completes this transaction. In some hotels computer system sends the settlement transactions directly to the credit card Co. guest only signs on the voucher present at FO. There is no need to sign on imprinted voucher. When foreign guests pay by credit card, credit card Co. payment is in local currency.

III.    DIRECT BILLING TRANSFER

Like credit card settlement, direct billing transfers a guest account balance from the guest ledger to the city ledger. Unlike credit card settlement responsibility for billing and collecting a direct billing lies with the hotel rather than an outside agency. Billing should be arranged and approved by hotel’s credit department. Guest signs the folio and accepts the responsibility to pay the bill should direct billing account not pay the bill.


IV.    COMBINED SETTLEMENT METHOD

A guest may elect to use more than one settlement method to bring the folio balance to zero.
E.g., guest may make partial cash payment and charge the reminder of the account balance to an acceptable credit card. FOA must accurately record the combined settlement methods and take care that all required paper work is properly completed. Once the guest has settled the account the FOA should provide the guest with a copy of the folio.
Good evaluation and follow up should be there as it is the last chance to make an impression.

LATE CHECK OUTS

Guests do not always check out by the hotels posted check out time. To minimise late check outs, the front office should post check out time notices in conspicuous places such as back of the guest room door, FO, in departure material etc. some hotels charge late check out fee. Explain to the guest why the fee is charged (management policy, HK can prepare room for other guests arriving that day).

CHECK OUT OPTIONS


Advance in technology with special guest service to expedite departure activities.
1.    Express check out

Guests may encounter line at front desk when checking out during the peak hours (e.g., between 7.30 and 9.30 am). To ease front desk volume, some FO initiate check out activity before the guest is actually ready to leave. A common pre departure activity involves producing and distributing guest folios to guests expected to check out. FO, HK or Security staff can quietly slip the folio into the guestroom, while they go for their rounds. By completing such a form, guest authorises the front office to transfer his or her outstanding folio to the credit card voucher created during registration.

Procedure for express check-out:

The receptionist should inform the guest about the express check out facility in the hotel
If the guest wishes to use this facility obtain his card during check in
Take the impression of the card on a charge slip and on the express check out slip.
The charge slip is signed by the guest.
One copy of the express check out slip is given to the guest. Explain to the guest that he needs to wrap his room key in the copy and drop it in the express check out drop box located in the lobby at the time of his departure.
Attach a copy of the charge slip and express check out sip to the registration card
The lobby manager/duty manager files his copy of express check out slip as per the check out date.
A day prior to the guests check out the copy of the guest bill is sent to the room with an ECO sticker attached
An ECO rooms list should be printed every morning which is necessary for monitoring the entire system. The second copy of this list is given to the bell desk.

This system is available only for credit card paying guests and is a facility given to those guests who avoid going physically to the cashier’s desk at the time of check out for considerable time saving.

2.    Self check out

In some hotels guests can check themselves out of the hotel by accessing self check out terminals in the lobby or in room system interfaced with front office computer intended to reduce check out time and front desk traffic. Some resemble automatic bank teller machines while others posses video and audio capability.
Credit card has to be used (number or magnetic strip). Check out is complete when the guest’s balance is transferred to a credit card account and an itemised account statement is printed and dispersed to the guest. This system sends an updated room status to front office computer.
In room folio review and check out usually relies on an in room television or guestroom telephone access via an in room TV. Guests can pick up a printed folio at the front desk on his way out.
In room self check out automatically updates room status and creates Guest History records. Another advantage is guests can look at their folios at any time during their stay.



UNPAID ACCOUNT BALANCES

No matter how carefully the front office monitors guest’s stay there is always possibility that the guest will leave without settling his account. Guest may forget to check out or front office may discover late charges for a guest who has already checked out. After departure charges or outstanding balances represent unpaid account balances.
LATE CHARGES may be a major concern in guest account settlement. Restaurant, telephone, room service charges etc are the examples of some potential late charges. Sometimes additional cost of postage, stationary, labor, etc is more than the late charge itself. It is important in maximising the profitability.


FOLLOWING STEPS CAN BE TAKEN TO REDUCE LATE CHARGES:

In automated and semi automated system front office can-
•    Post transactional vouchers as soon as they arrive at the front desk.
•    Survey front office equipment and voucher and folio racks for unposted charges.
E.g., local telephone, in room movie charge meters may posses information not recorded in a voucher.
•    Ask departing guests whether they have incurred any charge purchase or long distance calls that do not appear on the folio.

Front may appoint runners to collect vouchers or get information on phone at peak hours.
Front office computer system that interfaces with revenue center outlets is often the most effective means of reducing or even eliminating late charges. Room key deposits at reception counter help in reducing unpaid balances.

ACCOUNT COLLECTION
Late charges that are billed to departed guests should not be classified as un- collectible until the front office has exhausted all billing and collection procedures.
A registration card should contain guest address, phone number etc. Procedures for collection of late charges will be different for cash and credit card depending on company policy for late charges.
Guest account not settled at check out regardless of the credit established or prepayments processed during registration are transferred from the guest ledger to the city ledger, from front office to hotels accounting division.

TYPICAL CITY LEDGER ACCOUNT INCLUDE:
1.    Credit card billing- to authorised credit card billing.
2.    Direct billing–to approved company and individual account.
3.     Travel agency account- for authorised tours and groups.
4.    Bad cheque account- resulting from departed guests whose personal cheques were returned unpaid.
5.    Skipper account- guests who left the hotel without settling their account.
6.    Disputed bills account- for guests who refuse to settle their account (in part or in full) because of a discrepancy.
7.    Guaranteed reservation account- for billing and tracing no show guests.
8.    Late charges account- for guests who checked out before some charges were posted to their account.
9.    House accounts- for non-guest business and promotional activities.

To be effective, the front office must establish a policy for billing departed guests with overdue account.
Account receivable billing include determining:
1.    When outstanding account balances are payable.
2.    The number of days between billing.
3.    How to control departed guests whose accounts are overdue.

Collection schedules can range from aggressive (short cycle) to lenient (long cycle) depending on the hotels financial needs, clientele profile, history of collection patterns and so on.
•    Firm in any encounters involving deferred payment.
•    Documented procedure for collecting overdoes.
•    Credit for tour group to be established well before they arrive.
•    Uncollectible accounts to be sent back to the departments that originally accepted the uncollectible charge.

FRONT OFFICE RECORDS

 
Front office usually makes two copies of each guest account folio.
1 copy – guest receipt
2 copy – hotels permanent record
Front office that uses three part folio, file the third copy with credit card voucher or direct billing statement in case the guest later needs a summary of charges.
Registration cards are filed alphabetically whereas guest folios are filed numerically.

GUEST HISTORIES

Front office management can better understand its clientele and determine guest trends when it develops and maintains a guest history file.
It contains personal and financial data of the guest hence it is confidential and proprietary. It is the last step in check out and account settlement. Many hotels build guest history cards from expired registration cards. It has information about the guest’s spouse, family etc. the information may help develop ads that appeal to the types of clientele the hotel is attempting to attract. Guest histories may also point out the need for new, supplementary or enhanced services.

MARKETING FOLLOW THROUGH

Hotels marketing department may rely in part on guest history files to develop new marketing strategies. Also, a property-marketing programme may depend on the front office performance and follow through at check out.
E.g., marketing department creates a program to reward frequent guests with a free stay. Front office may be responsible for tracking the number of stays.
Frequent travelers clubs are designed to encourage brand loyalty. Here airlines work as co marketers.

GROUP DEPARTURE:
At the Bell desk:
Sufficient number of bell boys are arranged to handle luggage of the group.
Baggage down time and wake up calls times are important and must be checked and followed strictly.
Allocate floors and rooms to bell boys to bring down the luggage down to the lobby.
If on the day of departure the guests are not in the room the bell boys go to each group member’s rooms and “pull” each group members baggage out of the room and bring it down to the lobby until the group is ready to leave. This process is called as “bag pull”
Baggage is brought down to the lobby and counted. Bell captain obtains a baggage outpass.
Room keys are handed to reception
After clearance from the cashier and reception
Finally the baggage is loaded onto the vehicle by the bellboys.

At the reception:
Departure notification sips are issued half an hour prior to actual departure by the receptionist to telephones, housekeeping, room service, and food and beverage etc. to avoid any late charges.

At the cashier:
Cashier prints out the master folio and individual folios {if any}.
Makes a room wise summary for easy collection
Master folio given to the tour leader and the individual bills are collected with the assistance of tour leader.




Topic – Front Office Accounting

Objectives-
At the end of the class-
•    You should be able to understand the importance of accounting in front office.
•    You should be able to distinguish between guest accounts and non-guest accounts.
•    You should be able to understand different types of accounts.
•    You should be able to understand various accounting tools.
•    You should be able to understand non automated, semi auto mated and fully automated accounting systems.

I- Front Office Accounting System:
• The front office accounting system is responsible for:
a)    Creating and maintaining an accurate accounting record for each guest or non-guest in the hotel
b)    Tracking all financial transactions throughout the guest cycle
c)    Ensuring internal control over cash and non-cash transactions
d)    Recording settlement for all goods & services provided
• The front office accounting system shall be customized and tailored to track each hotel’s needs. Therefore, no two hotels have exactly the same front office accounting systems.

II- General Concepts of Front Office Accounting:

• Below is a brief description of some accounting terminologies used frequently in the front office department:

1- Accounts:

• An Account is a form on which financial data are accumulated, summarized and brought to its ending balance. Moreover, all accounts shall have two entries referred to as Debit (dr) (or charges) versus Credit (cr) (or payments).
• The most widely used representation of accounts is the T-Account, which summarizes debit entries on the left-hand side and credit entries on the right-hand side.
• Hotels operating under the manual system get use of journal forms to account for different front office accounting transactions.
• As far as front office accounting is concerned, there are two major types of accounts widely used:
a)    Guest accounts describe all charges and payments of guests who are already registered at the hotel.
b)    Non-guest (house or city) accounts: describe all charges and payments of non-guests. To illustrate, a potential guest sending a certain deposit to guarantee a reservation is a non-guest. Moreover, charges and payments of guests who checkout with any method of payment other than cash, shall be opened a non-guest account. Lastly, visitors and employees with charge privileges shall be opened non-guest accounts.

2- Folios:

• A folio is a statement of all transactions (i.e. debits & credits) affecting the balance of a single account. At Checkout, any guest folio should be balanced to 0 through full cash payment, credit card transfer, personal check transfer, special program transfer, and direct billing transfer…
• The correct way of maintaining folios starts with proper posting, which is the process of recording transactions on a folio  (i.e. proper folio, proper location and proper amount)
• Under the manual, semi automated and fully automated systems, folios are called hand-written folios, machine-posted folios, and computer-based electronic folios respectively. Moreover, all folios shall have a unique serial number for internal control and storing purposes.
• In the front office department, there are four common types of folios used:
a)    Guest folios: accounts assigned to individual persons or guestrooms
b)    Master Folios: accounts assigned to more than one person or guest room; usually reserved for guest groups
c)    Non-Guest (or semi-permanent) folios: accounts assigned to non-guest businesses or agencies with hotel charge purchase privileges
d)    Employee Folios: accounts assigned to employees with charge purchase privileges
• Apart from the above mentioned common folios, front office department get use of some other types of folios such as A-type, B-type, C-type, D-type, and E-type folios.


3- Vouchers:
• Vouchers depict the details of the transaction information gathered at the source of transaction and is, hence, a supporting documents used only for internal control purposes. Below are some of the commonly used vouchers in the hospitality industry:
a)    Cash vouchers
b)    Credit card vouchers
c)    Charge vouchers
d)    Transfer vouchers
e)    Paid-out vouchers
f)    Correction vouchers
g)    Allowance vouchers


4- Points of sale [i.e. POS]:

• A point of sale is the location at which goods or services are purchased; sometimes called a revenue center. Moreover, due to technology breakthrough, some non-traditional point of sales emerged such as in-room movie & in-room vending service systems.
• Since charges are usually incurred at remote points of sale, and guest and non-guest folios are maintained at the front office department, posting of different guest and non-guest charges shall be performed. An electronic transfer ensures this, under the fully automated system. Under manual and semi automated systems posting shall be done by a physical submission of different vouchers to the front office department.
• When posting charges, the following items shall be considered:
a)    Amount of the charge
b)    Name of the point of sales outlet
c)    Room number & name of the guest
d)    Brief description of the charge
e)    Guest signature & employee identification

5- Ledgers:

• The front office ledger is the collection of front office account folios, which usually include guest ledgers (i.e. charges and payments of all guests staying at the hotel).
• At any moment in time, the account receivable includes the addition of guest ledger and non-guest ledger (or city ledger) which refers to charges and payments of all non-guests.

III- Creation and Maintenance of Guest Accounts:

• All guest folios shall be created during the pre-arrival or arrival stage of the guest cycle. Moreover, folios might be either placed in front desk folio tray [i.e. posting tray, folio well, or bucket] or stored as an electronic guest folios in fully automated systems.
• As far as walk-ins are concerned, all their guest folios are created at the arrival stage!

1- Record keeping systems:
a)    Non- automated systems: Ensured through a series of columns listing individual debit and credit entries accumulated during the occupancy stage after which and establishment of an ending outstanding balance is needed.
b)    Semi-automated systems: Under this very system, all guest transactions should be printed sequentially on a machine-posted folio. Later, the front office clerk needs to come up with the folio outstanding balance. It is extremely important here to mention that, under this very system, each account’s previous balance shall be re-entered each time a transaction is posted to the folio.
c)     Fully-automated systems: All guest charges are automatically posted to an electronic folio


2- Guest charge privileges:
• Potential guests who would like to have guest charge privileges shall present an imprint of an acceptable credit card or direct billing authorization at registration. Failing to do so, guests would have to pay, in full, all their charges through cash, hence called Paid-in-Advance [PIA] guests and have, hence, have no post status.

3- Credit monitoring:
• In order to monitor and control charge privileges, the front office clerk should check whether the total net purchases are less than the minimum of floor Limit (i.e.: credit card company's limit) and house limit (i.e. hotel's limit). At least, each day, lists of guests with high risk or high balance accounts shall be communicated to all point of sale outlets. This is vital since, failing to do so, will let point of sales outlets continue giving charge privileges to a point that eventually the credit card company refuses to pay the amount of money exceeding its limit. This will cause very serious financial losses to the hotel.

4- Account maintenance:
• Whatsoever system hotels operate, maintenance of guest and non-guest accounts is ensured by the following formula:

Net outstanding balance = Previous balance + Debits - Credits
                               NOB                      =            PB             +    DR  -   CR


IV- Tracking Transactions:
• Under the manual and semi-automated systems, tracking transactions is ensured through an intensive use of vouchers. On the other hand, Under fully automated systems, tracking transactions is ensured through on-line electronic transfer of transactional information from remote points of sale to the front office main frame terminal.
• In accounting, a transaction is an exchange of goods and services for cash or a promise to pay. Under this very assumption, "nothing happens until a transaction occurs". This means that front office clerks shall first of all have a transaction, its supporting documents (i.e. vouchers, invoices…) to be able later to debit or credit certain accounts!
• In hotels transactions might have the form of:
a)    Cash payment
b)    Charge purchase
c)    Account correction
d)    Account allowance
e)    Current transfer
f)    Cash Advance

1- Cash payment:
• In this very transaction, front office clerks shall post cash payment as a credit in the guest folio. Moreover, cash vouchers shall be used as a transaction-supporting document.

2- Charge purchase:
• Charge purchases represent deferred payment transactions that increase the outstanding balance of a folio account. In this transaction type, front office clerks shall use charge vouchers as a transaction-supporting document.

3- Account correction:
• Account correction is used to resolve a posting error in a folio detected at the day the error is made (i.e. before the closing of the business day). In this transaction, front office clerks shall use correction vouchers as a transaction-supporting document.

4- Account allowance:
• Account allowances occur because of two reasons:
a)    Either as compensation of poor service, or as rebates for coupon discounts. That way, guest outstanding balance decreases.
b)    As to correct a posting error detected after the closing of the business day.
• For both reasons, front office clerks shall prepare an allowance voucher as a transaction supporting document.
V- Internal Control:
• In the hotel industry, the main purpose of internal control is to track transaction documentation, verify account entries and account balances, and to identify vulnerabilities in the accounting system. The keyword to internal control is auditing, which is the process of verifying front office accounting records for accuracy and completeness.

• Below are some forms that are of extreme importance to internally control, one of the most vital assets in the hotel (i.e. cash):
1- Front office cash sheet:
• The front office cash sheet lists each cash receipt or disbursement in order to reconcile cash on hand at the end of a cashier's shift with the documented transaction that occurred during the same shift.
2- Cash, house banks or petty cash:
• Petty cash is the amount of cash assigned to a cashier so that he/she can handle the various transactions that occur in a particular work shift.
• At the beginning of each shift, all cashiers must sign their cash banks and at the end of the shift, shall deposit all cash, checks, and other negotiable instruments in the general cashier's safe deposit box. Moreover, at the end of each shift, cashiers should watch out for cash discrepancies (i.e. any difference between front office cash sheet and the actual amounts in their cash drawers). Cash discrepancies might have the form of cash overages, shortages, or due backs
•Lastly, cashiers might come up with the net cash receipt, which is:

Amount of all cash, checks, and other negotiable instruments in cashier’s drawer – amount of the initial cash bank + all paid outs

3- Audit control:
• Along with the fact that hotels might employ internal control auditors, at least once in a year, (especially for hotels traded in the stock market) to get use of external certified public accountants responsible for approving hotel's accounts.

VI- Settlement of Accounts:

• One of the responsibilities of front office clerks is to settle guest accounts, which means the eventual collection of payment for outstanding account balances (i.e.: bringing account balances to 0]. This is usually ensured either by full cash payment, transfer to an approved credit card, personal check, special program, or direct billing account…


What is an account ?
An account may be imagined as a bin or container in which the results of various
business transactions are stored. The increases and decreases in an account are
calculated and the resulting monetary amount is called as account balance. Any
financial transaction that occurs in the hotel may affect several accounts. Front office
accounts are recordkeeping devices to store information about guest and non-guest
financial transactions.
The simplest form of writing an account is the “T” form
 {as it resembles the letter T}
Account name
Charges Payments
Computers have replaced the use of these T accounts. However the principle behind
usage of accounts remains same.
Types of accounts at the front desk:
1} Guest accounts:
A guest account is a record of financial transactions which occur between a guest and the hotel. Guest accounts are created when guests guarantee their reservations or when they register at the front desk. During occupancy, the front office is responsible for and records al transactions affecting the balance of a guest account. The front office usually seeks payment for any outstanding guest account balance during the settlement stage of the guest cycle. Certain circumstances may require the guest to make a partial or full payment at other times during the guest cycle. For example, if the front office is to enforce the hotel's house limit, guests who exceed that limit may be asked to settle part or all of the outstanding balance. When there is a house limit, account settlement action is initiated when the account balance exceeds a predetermined limit, not at the time of check-out.

2} Non-guest accounts:
A hotel may extend in-house charge privileges to local businesses or agencies as a means of promotion, or to groups sponsoring meetings at the hotel. The front office
creates non-guest accounts to track these transactions. These accounts may also be
called house accounts or city accounts. Non-guest accounts are also created when a
former guest fails to settle his or her account at the time of departure. When the
guest's status changes to non-guest, the responsibility for account settlement shifts
from the front office to the back office {accounting division}. Unlike guest accounts, which are complied daily, non-guest accounts are normally billed on a monthly basis by the hotel's accounting division
Voucher:
A voucher details a single transaction to be posted to a front office account. This
document lists detailed transaction information gathered at the source of the
transaction. The voucher is then sent to the front office for posting onto the guest folio.
Usually any service or goods brought on credit by the guest has to be supported by a voucher.
Types of voucher:
Charge vouchers such as Restaurant/ Bar check
Cask advance/Paid out voucher
Allowance vouchers and Correction vouchers
Cash Vouchers

BASIC PRINCIPLES OF ACCOUNTING:

• Any amount paid by the guest to the hotel is posted in the debit column. A debit{dr.} therefore is moneys owed by the guest to the hotel
• Any money received from the guest is posted in the credit column. A credit therefore is any money paid by the guest towards settling his/her bill including advance deposits.
• The balance column reflects a progressive difference between debits and credits
calculated on basis of the formula
“ previous balance + debits – credits = net outstanding balance”
These principles are applicable to the guest folio/bill in which all cash and
credit transactions are recorded for each resident guest which increase or decrease the balance of a single account. It is also called as “guest account card”. In some hotels it is also called as Guest weekly bill.
The debit transactions are recorded to the left of the folio while the credit transactions are recorded to the right. The outstanding balance is calculated by subtracting the right from the left.
In the manual system the folios are maintained in hard copies in folio racks
at the cashier’s cabin or back office. In an automated system the folio remains in the computer and a hard copy is printed out only at the time of guest check out. Each entry into the folio is called a posting . Each posting is recorded sequentially in the folio in the order of transactions on a given date.
When an account is created, it is assigned a folio with a starting balance
of zero.
A debit entry will increase the guest’s outstanding balance while a credit entry will decrease the outstanding balance.
At departure the outstanding balance has to be returned to zero by cash payment or by transfer to an approved credit card or to a direct billing account
Guest folio format :

POINTS TO REMEMBER WITH REGARD TO A FOLIO:

1. A folio is raised as soon as the guest checks in.
2. The initial outstanding balance {when it is opened} of the folio is zero
3. Details on a folio: Guest name, Room Number, date of arrival, date of departure,
Room rate, address, billing instructions. Each folio has a serial no. which will help
keep a control on folios for the purpose of audit.
4. The cashier is responsible for the guest folio till the guest departs.
Types of folios used in hotels:
• Individual guest account card/folio: To record transactions made by an individual
or independent guest with the hotel. Also called as guest folio
• Group folio/master folio: One folio for the whole group and this folio is required to
record all transactions made by the group{which are part of the package of the
group}
• Semi-Permanent or non-guest folios: In this folio the credit financial transactions
made by non-resident guests with the hotel are recorded. Also known as city
account card or non-resident guest account card.
• Employee folio: All the financial transactions {if any} made by the employees are
recorded
• Permanent/ companies/airlines folio: Separate folios are maintained for all
companies, agencies, organizations with whom the hotel has permanent billing
arrangements.
• Split Folios: Split folios are those when two guests wish to have separate accounts
though they share the same room. Room charges will feature on one folio for
convenience, other charges would reflect individually in split folios.
Another case of split folios is when a company executive would like to
maintain two separate accounts one that is charged to his/her company while
the other is to record his/her personal expenses.

Ledgers used at the front desk
A front office ledger is a collection of front office account folios
There are two main types used at the front desk
1} Guest ledger {Transient ledger/front office ledger and room ledger}
Guest ledger is the total set of all account folios of guests registered in the hotel
{in-house guest} hence any debit entry to the guest folio will not only increase the
guests balance but will also increase the net outstanding balance of the guest
ledger.
2} City ledger {Non-Guest Ledger}
City ledger records all accounts that do not belong to resident guests. At the
time of check out if the resident guests outstanding balance is not brought to zero ,
the same is transferred from the guest ledger to the city ledger.
At the time of account transfer, the responsibility for account collection shifts
from the front office to the accounting division (back office).
Accounts which are included in city ledger:
• Credit card payment accounts
• Direct billing accounts {guests’ whose bill will be settled by the company}
• Airlines
• Travel agencies
• Skipper’s account
• Bad cheques account {Bounced cheques of guests}
• Disputed bills account
• Retention charges account from DNA guests

Account aging:
Most of the city ledger accounts are settled within 30 days of billing which is
generally satisfactory. However there will be some which will take longer than 30
days to collect . The hotel should establish methods for tracking past due
accounts which may be based on the date the charges were incurred. This
practice of scheduled billings is normally referred to as account aging. At large
properties the accounting division monitors account aging while at smaller
properties the night auditor may assume this role. An account age analysis sheet
identifies which account receivables are 30, 60, 90 or more days old. Accounts
lesser than 30 days old are considered current. The accounts over 30 days are
considered overdue and the ones above 90 days are delinquent The front office
should maintain a list of accounts over 90 days due. Guests asking for
reservation on an overdue account may be asked to pay cash or by a valid
credit card until the account is considered current




topic:Front office and guest safety and security

Security Issues
----------------------
Security encompasses areas such as security of the property itself, company assets, employees' and customers' personal belongings and valuables, life security, personal security etc.
 
In all workplaces management stipulates that it is not responsible for valuables and employees personal belongings (their handbags, items kept in the personal lockers, etc.).  Yet management must take all possible measures to prevent theft among employees and of employee belongings through its hiring practices and through the implementation of effective management, human resources and operational policies, such as:  
•    Background checks of selected applicants
•    Policies related to employees' entry to, and exit from, the workplace
•    Spot checks of locker rooms and lockers
•    Effective supervision and control during the work cycle
•    Policies related to the discovery of criminal records and wrongdoing among, and by,  employees
•    Control of people entering and exiting the workplace
With regard to guest valuables, management informs guests that the hotel is not responsible for valuables left in the room, advising them to secure these in safety deposit boxes provided by the hotel.  Besides taking care of security issues related to the people they employ (as outlined above), management must undertake some necessary measures, among which:
•    Providing "secure" (safety) deposit boxes and areas to keep valuables
•    Policies and practices to ensure the security of these boxes and areas
•    Management and operational policies regarding the security of guest rooms
•    Management and operational policies regarding the security of public areas
•    Security policies and practices for the back-of-the-house areas
•    Employment and training of security personnel
•    Policies and practices to minimize the "presence" and "patronage" of  "shady characters" and criminals, verification of registration and check-in personal data and documentation submitted, and curtailing free movement of unknowns on the premises, as well as direct, free flowing communication with local, national and international security authorities)
•    Training of staff in guest and valuable security
•    Effective supervision and control procedures.

Some of the security measures taken by hotels:
Key Card Locks:
While key card locks on guest rooms are quickly becoming the standard, some hotels still don't take advantage of the added safety provided to guests. 
Guest room locking systems these days include punch and magnetic key cards which have locks with flash memory and other productivity linked functions. The system can directly be linked with PMS.
Security Guards:
Most hotels do not have security guards while some employ them only at night.  At Best Western Sterling Inn, we have our own staff of trained security guards working 24-hours every day to provide the best in safety and security for our guests
Defibrillation Units:
A life saving device in case of heart attacks, defibrillation units are starting to be deployed among police and emergency personnel across the nation. 
Security Cameras:
Few Hotels have security cameras with digital technology, intelligent access central system, software interface with CCTV for matching undesirable visitors and criminals, interfacing with motion detectors, pocket lie detectors and spy cameras and use of biometric readers like hand key reader or face recognition system etc.
Fire Alarms:
While most hotels now have smoke detectors and fire alarms, Some hotels have a state of the art alarm system with smoke detectors in each guest room and throughout the entire complex that is monitored 24 hours a day, 7 days per week that pinpoints the exact point of the alarm allowing our security staff to respond immediately to the area of any alarm condition.
Emergency Power:
Very few hotels have any provision for emergency power in case of an electrical outage while a few hotels provide limited emergency stand-by power to provide elevator service and some lighting.  Some hotels has a 2-Megawatt stand-by generator that provides 100% emergency power that can provide uninterrupted guest service during a power outage.
Emergency Manual:
Hotels maintain an emergency manual, detailing operations in the event of a variety of emergencies.
Employee Photo ID:
For added security, some hotels have employees wearing a photo ID nametag allowing quick identification.
In-Room Safes:
In addition to the safety deposit boxes offered by most hotels at the front desks, Some hotels provide in-room guest safes capable of holding a lap-top computer that use the guest's own credit card as the key.
Guest elevators:
Elevators may also be interfaced with a room electronic locking system, where swiping the room card key takes the guest to the floor on which he is staying.



Bomb threat security:
Precautions and measures that may be taken in the above case:
1.    Security nets and body searches for guests not known to the staff.
2.    Banqueting suites and other non-public areas should be security checked and locked after use
3.    Goods received and bags should be checked and kept tidy.
4.    If a bomb threat is received via telephone, the telephonist should note carefully what exactly is said, the time of the call received the accent of the caller and background noise if any. After the alert the GM should stay put in the lobby where he can be reached easily.
5.    Duties and responsibility of staff during an emergency should be well-defined.
6.    The hotel should work closely with the police to keep them updated.
7.    Chamber maids and HK supervisors should be trained to conduct security checks in the guest rooms. 

Security measures for women travelers
-Mirrored walls of the guestroom floor elevators so that you can see who is walking behind you
-Well-lit public areas such a s lobby bars
-Valet parking services to avoid the need o a woman to enter the parking lot
-Assigning rooms closer to the elevator
-If a woman traveler is not assigned a room on the special executive floor , hotels most often on request, upgrade her accommodation to that floor without an increase in room rate. The floor is staffed almost 24 hours a day with a concierge
IMPORTANCE OF A SECURITY SYSTEM
The guest, who comes to a particular hotel, comes with an understanding that he and his belongings both will be safe and secure during his stay at the hotel. At the same time it is also quite important that the hotel staff and assets are protected and secure. Hence it is very important to have a proper security system in place to protect staff, guests and physical resources and assets such as equipment, appliances buildings, gardens of the hotel and also the belongings of the guest.
The management must take care that the security and safety systems cover the following areas:
Guest: Protection from crimes such as murder, abduction and health hazards from outsiders, hotel staff, pests, food poisoning etc.                                                                                                                              Staff: Providing staff lockers, insurances, health schemes, provident funds etc. Protective clothing, shoes, fire fighting drills, supply of clean drinking water use of aqua guards, sanitized wash rooms etc.    Guest luggage: Secure luggage store rooms and proper equipment such as luggage trolley and bell hop trolley should be provided.                                                                                                                             Hotel Equipments: Lifts, Boilers, Kitchen equipment, furniture fitting and building etc. must be protected and for these the security and safety should cover up fire safety equipment, bomb threat security system, water floods security system, earthquake security system , safe vault security system etc.                                                                                                                                                               Protection of raw materials, goods, provisions and groceries etc. for this the security system should cover proper storage and pest control systems, apart from the application of total material management system.

TYPES OF SECURITY:
1)    Physical aspect
2)    Security of persons
3)    Security of systems
1) Physical aspect is divided into two parts a) Internal  b)external
a) Internal security
Against theft
Fire safety
Proper lighting
Safeguarding assets
Track unwanted guests

b) External Security
Proper lighting outside the building
Proper fencing of the building
Fecing of pool area to avoid accidents in the night
Manning of service gates to restrict entry
Fixing of closed circuit TV cameras
2) Security aspects of persons
a) Staff
Effective recruitment and selection
Identification of staff
Key control
Red tag system
Training
Locker inspection

b) Guests:
Check scanty baggage guests
Guests suspected of taking away hotel property should be charged according to hotel policy
Guest room security:
Provide wide angle door viewer, dead bolt locks, night torch, chains on doors etc
Employees should be trained to not give any information abount in house guests to outsiders
While issuing a card key ask for key card if in doubt of the guest.
House keeping staff should never leave keys expose on unattended carts in corridors


3) Security aspects of systems:
Record of all losses and missing items immediately
Inventory control should be proper
Auditing should be done on a regular basis
Proper system for cash disbursements should be made
The term system implies the operations of the hotel eg: all the equipment used for operation, procedures laid down for operations and policies to be followed. Systems procedures and policies if followed properly shall safeguard the assets and increase life span of equipment as well as avoid any breakdown maintenance
This would mean the following:
Fix duties and responsibilities: Fix duties of staff members so that they don’t interfere with others’ work.
Make surprise checks
Staff who have access to liquid assets should be made to sign a bond so that in case of theft the concerned person can easily be caught
Hiring of some independent security company to check the security system of the hotel

Safety issues
-----------------
When we take the same hotel as example, it is management's duty to ensure "safety" in several areas, such as:

•    The structure itself
•    Installations and fixtures (check electrical, plumbing, air-conditioning and other installations)
•    Public and work areas (e.g. slippery floors,  hazardous obstacles in traffic areas), safety of furniture, equipment, appliances, and utensils.
This is followed by:   
•    Health safety (nontoxic cleaning material and detergents used)
•    Good quality air (what we breathe, dependent upon the type of equipment, installations and fixtures used, and regular repairs and maintenance)
 
•    Food safety (a whole world in itself including sanitation, food quality, food spoilage, correct handling procedures, allowable and recommended temperatures, etc.), and checking and control procedures.  
An important "preventive measure" is eliminating the possibility of communicating contagious diseases. Even if local regulations do not require it, it is recommended to send food and beverage handlers for a regular medical checkup. Another preventive measure is the formulation and implementation of policies and procedures related to employee accidents which may present a threat to food sanitation. 
Culinary staff who cut themselves accidentally at work, as often happens while slicing food products, have to immediately stop handling food, and report to their Executive Chef and to the person in charge of First Aid in their company (Security or Human Resources Department) for preliminary treatment and handling.  Healing and precautionary measures are taken before they are allowed back at their job.
There are also some basic "dress" requirements for staff involved in food and beverage preparations:  e.g. Chefs' hats (to prevent hair and whatever hair contains to fall into the food), discreet earrings (non-dangling) or no earrings for women, and long hair neatly and securely tied in a bun at the back of the head.
Of no lesser importance is the safety of work tools and work procedures covering all areas, such as stable ladders, secure shelving, safety shoes, well-fitting work garments, clearly written and complete safety procedures and guidelines from management, safety training, and safety installations and equipment, e.g. fire fighting units, regular maintenance schedules for safety equipment and installations, wider traffic areas (to prevent accidents), adequate staffing, and last but not least, continuous effective training in work procedures.
All of this necessitates comprehensive planning, the creation of clear policies and work procedures, organization, implementation, training of supervisors and employees, supervision and control. 

FIRE:
Fires in the hotel may result in the injury and loss of life of both the guests and the staff.
Main causes of fire are:
i) Smoking:
-Smoke only where allowed.
-Put out cigarettes in the right place.
-Sufficient ash trays should be provided in eating places and in rooms, but away from    curtains and draperies.
-Educate the guests about fire possibilities due to smoking.

ii) Defective wiring, faulty appliances and motor and worn out insulation
Such hazards should be immediately reported to the concerned person and such equipment should be immediately repaired

iii) Laundry Areas:
Care should be taken to see that none of the electrical equipment is left on after use

iv)Gas leaks:
Precautions should be taken against this especially in kitchen areas.

    v) Combustible waste
Combustible material should never b e left near the boiler room

vi) Kitchen
All equipment such as chimneys, exhausts, ventilators, grills, hoods etc. which collect a lot of fume vapor and catch fire easily should be cleaned regularly.

vii) Elevator shafts:
These require constant check and inspection. Cigarette butts can ignite the debris and oils that gather at the bottom of elevator shafts.

 
Types of Fire and fire extinguishers:

Hotel personnel are trained about the fire protection procedure and the types of fire. They must be able to recognize the various types of fire, all fire require air. Air contains O2 which is necessary for combustion. Fire has been classified in 5 categories depending on how they can be extinguished-
Class A Fire- It is the fire of wood, paper, linen and similar dry materials. They are extinguished by cooling and quenching effect of water. The water reduces the temperature of burning substances below their combustion temperature. These are the most frequent and easiest to extinguish when there is an ample water supply and when water can be directed on the combustible material .Keeping the other combustible material wet will limit the spreading of fire
Class B Fire-These include fires of oil, gasoline, grease and other petroleum product. These fires are extinguished by blanketing the source of burning substances and eliminating the supply of O2.Petroleum products is lighter than water and will float on water and continue to burn and spread by means of flowing water to other section of the building, hence water is never used for this category.
Class C Fire-These are the fires of pressurized gases. For e.g. L.P.G., most of the gases are lighter than air but L.P.G. is heavier than air. Water is not to be used for this class of fire.
Class D Fire-These are fire of metals having low burning temperature for e. g. Na, Mg etc. This class of fire does not exist in the hotel.
Class E Fire-These are electrical fire. The fire extinguishing agent must not conduct electrical energy which could spread the fire. Electrical fires are usually blanketed and cooled down. Water is a good cooling agent but it also conducts electricity, so it is not used to control or extinguish this class of fire. Electrical fire is usually caused by a part of circuit overheating or by short circuit. Controlling the sizes of electrical fuses and circuit breaker will often minimize this class of fire.
There are 2 systems of fire protection
1.    Portable fire extinguisher.
2.    Stationary fire fighting system.
Portable fire extinguisher
a.    Soda acid fire extinguisher- It is used for class A fire. The extinguishing agent is H2O.The fire extinguisher is a cylinder type of pan in which a rubber or flexible hose is attached to the top. When it is desired to use the extinguisher, it is carried to the fire and inverted. A small bottle of acid usually H2SO4 is spilled when the cylinder is inverted or turn upside down. Powdered sodas, bicarbonate of soda (Baking Soda) is mixed with H2O when the tank is charge or fills with water. The chemical reaction of acid and soda water creates a pressure which forces the water out of the cylinder or tank. The hose is used to direct the flow of water to the fire. It has 2 disadvantages:-
-It must be kept away from freezing
-Acid causes corrogen problem which reduce the life of the tank or cylinder. The corrogen problem has been minimized by replacing the acid with CO2 cartridge. Upon the cylinder inversion the cartridge opens and releases CO2 gas under high pressure. The high pressure gas than forces the water out of cylinder.

b.    CaCl2 fire extinguisher-It is also used on class A fire. . CaCl2 is a salt which when added to water      form brine which has very low freezing temperature. CO2 cartridge is used as pressure agent to   force H2O and CaCl2 out of the cylinder to the fire. These extinguishers are used where freezing is a  potential hazard
c.    Foam type extinguisher-It is used on class B type of fire. The extinguisher is charged with special chemical (Al2SiO4), the chemical spread on the burning material and the solution, blanket the fire by excluding O2.
d.    CO2 fire extinguisher- It is used on C, D and E class of fire. The CO2 types spray a chemical fog towards the fire. The fog quickly excludes the O2 from the burning material and blanket the combustible material.
e.    D.C.P. extinguisher- It can be used on C, D and E class of fire. The most common extinguishing agent is sodium bicarbonate or plain baking soda. The extinguisher is charged with the dry chemical and a small tank of CO2 gas. The CO2 gas exerts pressure on dry chemical and forces it out of a nozzle directly to the fire. The powder strict the fire and the heat from the fire breaks down the chemical which releases CO2 gas on a large scale which helps in extinguishing the fire.
Stationary fire fighting system
a.    Automatic sprinklers-It is generally mounted just below the ceiling height with a temperature detector or smoke detector, attached with each sprinkler. The temperature from the fire melts the fusible link on the detector, which opens a water valve. The water is then sprayed on the ceiling and falls on the floor, extinguishing the fire. If the fire area should spread, more sprinklers are automatically opened, thus confining the fire to a small area. The temperature detector can be purchased for different activating temperature. The high temperature detectors are often used in kitchens.
b.    Fire Hose System-It is a semi portable system. In this system the fire hose box is permanently located but the flexible hose can be moved to various distances throughout the building. The hose used to fight fire within a building should be of linen type. The linen allows some water seepage through it which will prevent its burning when in use.

HANDLING EMERGENCY SITUATIONS
Apart from fire and bomb threat etc. the front office staff at some point of time have to handle a lot of unusual situations also. Some such situations may be death and illness of guests, theft in hotels etc and many others.
1) Death of a guest in the hotel :
  1. Once the information comes to the front desk it should directly be reported to the front office manager.                                                                                                                                                              The front office manager will then report it to the GM or resident manager
  2. The security manager should also be informed immediately
  3. The police is informed and the hotel doctor is summoned who will check and confirm the death
  4. Meanwhile the hotel will locate the residential address of the deceased and will inform the relatives.
  5. Once the police complete all formalities and activities and gives the permission, the dead body is fully covered and then removed from the room on a stretcher. For this purpose the service elevator and not the guest elevator is used
  6. A death certificate is obtained from the doctor
  7. A report should be prepared as to who informed of the death, time, room number and date of death. In case there is any luggage of the deceased in the room a list should be prepared and the luggage should be kept in the luggage room and the person performing this activity should sign this report
  8. The guest room is locked and sealed.
  9. After obtaining clearance from the police the room is opened and thoroughly disinfected and spring cleaned and only after permission of the police and subsequent permission of the GM or resident manager the room should be sold.
  10. Some important facts to be kept in mind are:
  11. Do not enter the room alone always take the lobby manager and security officer with you
  12. In case you are aware that the deceased was under the treatment of a specific doctor, the same should be called instead of the hotel doctor. His physician will also be helpful in knowing and notifying the incident to the relatives and people known to him
  13. Donot disturb the body or touch anything before the arrival of the police as this may be a murder or suicide case.
2) Handling accident cases:
•    A knowledge of first aid would come very handy in such situations. In general the following points should be taken care of :
•    Remove the person who has met with accident from the site of accident {as early as possible and take him to a more comfortable area, use a stretcher in case the need be}
•    Call the doctor and if possible give him the details of accident and gravity of the accident.
•    Take someone along with you to the site of the accident as you may need help
•    Keep alert you must serve the victim immediately by providing first aid
•    Try to protect your establishment from any false allegations
Prepare a full report of the whole accident giving details of the date and time who reported the incident, room no., site of the accident etc. Also make your comments as to the reason of the accident and how could it have been prevented and what action is to be taken to avoid the same in the future.
The accident book:
-    An accident book is usually maintained in all organizations and the receptionist should record all details of accidents which have occurred to employees whilst carrying out their daily activities.
-    The book must be kept in a place easily accessible by any injured person or a person bona fide
-    Particulars of an accident may be entered here in either by the injured person himself or by  a person acting on his behalf
-    The accident book when filled up should be preserved for a period of three years after the date of the last entry
-    Every employer is required to take steps to investigate the circumstances of the accident recorded and if there happens to be any discrepancy between the circumstances found by him and the entry made, he is required to record the circumstances so found.


3) Situation of Theft:
Theft is divided into four categories:
I.    Theft by employees of the hotel can be avoided by:
-    Work business and personal references should be checked before the employee is hired.
-    A detailed record of all employees who enter the guest room such as chamber maids bellboys room boys maintenance etc
-    All hotel keys should be returned to the department concerned and no employee should be allowed to take keys out of the hotel’s premises.

II. Damage of hotel property by the guest can be avoided by:
-    The hotel staff should identify the main cause for the damage.
-    If the damage is appears to be done intentionally the hotel can ask the guest to pay compensation for the same. For this it is necessary that the front desk is well versed with the cost of the damaged item.

III. Theft of hotel property by the guest:
Can be avoided by taking the following steps:
-    Installing automatic locks on the guest room doors
-    Appointing a security officer who would walk and take rounds at regular intervals
-    Inform guests to use the safe vault of the hotel and not to keep valuables in the guest room
-    Keep a watch on walk in as their likelihood of being a thief is more as compared to a guest who has undergone a process of making a reservation in the hotel          
-    Avoid giving room numbers of resident guests to visitors or over the telephone callers.
-    In case the guest loses his key and asks housekeeping to open the room door for them, HK should direct them to front desk 
-    Master key should be kept under strict supervision and control
Theft by outside visitors can be avoided by:
-    being aware of suspicious persons
-    regular and irregular schedule of vigil and rounds
-    Stagger lunch and rest periods of employees so as to keep one person on duty on each floor at all times
-    Instruct eh telephone operator not to connect calls to the guest room incase the request is made by the caller by room number. The receptionist should insist on knowing the name of the guest who the caller wishes to speak to.
-    Guest should be informed to keep the balcony door closed to avoid anyone entering the rooms from the balcony
-    Closed circuit televisions should be used

4) Situation of illness and epidemics:

-    The receptionist may be called for assistance during sickness of a guest.
-    Patient should be advised to consult the house physician but in case the guest has his own physician the same should be called.
-    Housekeeping needs to be notified about the sickness and instructions if any
-    If the case of serious sickness, the guest should be moved to a nursing home
-    During epidemics all precautionary measures especially in food and beverage service area should be followed

5) Handling a drunk guest :

-    The guest should be removed from the lobby as early as possible but being careful not to irritate/offend him.
-    Preferably taken to the back office or to his room. 
-    If he behaves unruly, the hotel security must be called.

Safe deposit facility in the hotel for security of guests’ valuables:

-    It is the responsibility of management to develop and maintain proper safe deposit procedures for its property.
-    If this facility is available for guests, notices regarding it should be put up in various conspicuous/noticeable places in the hotel and also should be mentioned to the guest.
-    Safe deposit boxes should be located in an area, in vicinity of the front desk and which has limited access. Unauthorized guests or personnel should not be permitted inside the area.
-    Front office staff should be well-versed with the procedures regarding safe deposit boxes.
-    Strict control should apply to the storage and issue of safe deposit keys.
-    At any point of time there should be only one key issued for each safe even if more than one person is using the safe.
-    Two keys are required to open a safe deposit box: one being the guest’s key and the other being the control key/guard key put in by the cashier/safe deposit attendant.
-    After the verification f the identity of the guest, the safe deposit attendant/cashier should accompany the guest to the safe deposit area where in clear sight should make use of the control key and the guest’s key to open the safe.

                            Sometimes the hotel may not be able to meet the demand for individual safe box; in that case a large box containing the belongings of more than one guest is used. Each guest’s belongings are put in an envelope which is sealed. The key to this box is stored in a secure place and a log is maintained which records an entry each time the key is used to open the box




topic: THE NIGHT AUDIT

Front office records must be periodically reviewed for accuracy and completeness. This need is met through the NIGHT AUDIT. With computerised accounting it can be carried out at any time during the day. These properties choose to call the audit the Front office audit or System up date. Even though computerised properties can perform these functions at any time, they almost invariably follow the night time tradition since the no. of transactions are less during the late night or early morning hours.   Performing the night audit requires attention to accounting detail, procedural controls and the guest credit transactions.

Duties and responsibilities of a night auditor:
  1. The night auditor is an official of the hotel who verifies the correctness of the guest accounts, checks the entries of the day’s sales and verifies whether the cash collected during the day has been duly accounted for with the help of summaries and statements received from various departments during the night shift.
  2. The night auditor should also be familiar with the nature of cash transaction affecting the front office accounting system.
  3. The night auditor typically tracks room revenues, occupancy percentages and other operating statistics.
  4. In addition, the auditor prepares a daily summary of cash, check and credit card activities that occurred at the front desk. These data reflect the front office’s financial performance for the day.
  5. The night auditor summarizes and reports the results of the operations to the front office management. This accounting data can also be used by hotel’s accounting department for the generation of further statistical reports.
  6. The night auditor establishes guest and non guest account integrity by cross- referencing account posting with departmental source documentation.


The audit process is complete when the totals for guest, non-guest and departmental accounts are in balance. As long as the audit process presents an   out of balance position, the audit is considered incomplete. An out-of-balance position exists when the charges and credits posted to guest and non guest accounts throughout the day do not match the charges and the credits posted to the departmental revenue sources. An out-of-balance condition may require a thorough review of all account statements, vouchers, support documents and departmental source documentation.
Proper internal control techniques call for different front office staff to post, verify and collect for different sales transactions at the front desk. If a front desk agent was allowed to sell a guest room, post the charges, verify the postings and collect the cash for the room, no one else would be able to detect mistakes. Instead, duties should be split among the employees; a front desk agent may perform posting, a night auditor the verification and a cashier the settlement.



Supervising the credit limits of guests and non guests accounts helps to maintain the integrity of a front office accounting system. Establishing lines of credit or credit limits depends on a lot of factors, such as credit card company floor limits, the hotel’s house limit, and the guest’s status or reputation as a potential credit risk. High account balances should be noted as a part of the posting process. At the end of each day the auditor has to identify those guest and non guest accounts that have reached or exceeded the assigned credit limits. A report listing high balance accounts or a high balance report for the front office to take appropriate action.

Night audit functions can be performed manually, mechanically or electronically. Regardless of how the night audit is conducted, the basic accounting formula that applies is as follows :
Previous Balance    +    Debits    -    Credits    =    Net outstanding balance      
          PB          +       DR      -       CR       =             NOB

A daily transcript is made in manual and semi automated hotels as a detailed report of all guest accounts. The daily transcript indicates those guest accounts that had transactional activity on that particular day. A supplemental transcript is often used to record the day’s transactional activity for non-guest accounts. Daily and supplemental transcripts are simply worksheets designed to detect various types of posting errors. They can facilitate the night audit routine by identifying out-of balance figures. An out-of-balance condition among the non-guest accounts, for example, will help the night auditor to detect and correct errors without having to review all transactions occurring on that day.

The Night Audit Process :
A manual accounting module simply is not feasible for a large hotel’s front office operation. The duties of the night auditor working with a non-automated system are as follows:
1.  All pending vouchers, left unposted by the previous billing clerk are entered into   
     the guest account.

i.    Charges room rate to all guest accounts and accumulates room charges for the day are also posted in the guest account
ii.    Closes all guest accounts for the day in the Visitors Tabular Ledger as well as in the Guest Weekly bills
iii.    Prepares new sheets of Visitor Tabular Ledger for coming day and opens all guest accounts
iv.    Totals Debit and Credit sides of each V.T.L.
    Checks the arithmetical accuracy of the total of each debit and credit item on the last sheet of the V.T.L. The formulas applied are:
•    Daily total vertical figures = daily total horizontal figures
•    Daily total + Balance B/F(Dr.) – Balance B/F(Cr.) = Grand total(Dr.) – Grand Total(Cr.)
    2.  Two transcripts of the guest accounts are prepared; one for the in-house  
         guests and the second for the departed guests

    3. The total individual items showing the transcript are compared with the
         respective sale summaries of the departments

a)    The total room sales is compared with the room sales shown by the V.T.L., room count sheet and the night receptionists room sales report
b)    The total food sale is compared with the restaurant sale summary, cash book summary and V.T.L. food column
c)    The total of the bar sale is compared with the bar allocation sheet of control dept. and cashiers bar sale summary and V.T.L. bar column.
d)    The total of telephone column is compared with the telephone summary and V.T.L. telephone column.
e)    The total of other departments is compared with the sales journals of these departments and respective columns of the V.T.L.
f)    The balance b/f is compared with the balance c/f  for the previous day
g)    The total of cash receipts is compared with the front office cash sheet
h)    The allowance vouchers are not listed in the front office so the night auditor prepares a consolidated statement of allowances. The total of these is compared with the allowance column of the transcript.
Sends the departmental summaries, transcript sheet, V.T.L., etc. to the income auditor.
 
 In some hotels semi-automated accounting system is used with the help of N.C.R. machines. The duties performed by the night auditor are as follows:
1.    Takes the readings for all departments with the help of accumulating key
2.    The night auditor prepares a trial balance with the help of N.C.R. machine.
3.    It is also the responsibility of the night auditor to remove bills of those guests who have completed their seventh day in the hotel and reopen new bills for them for the new week
4.    Sends all department summaries, transcript sheet, machine balance and audit roll tape is sent to the income auditor.
    The night audit focuses on two aspects, The discovery and correction of front office guest accounting errors and management reports. Guest and non guest accounts are compared with the source documents from the revenue centers to provide individual transactional entries and account totals. Discrepancies found during a night audit should be corrected so that the front office accounting system is in balance. For  management reporting, the night audit provides important operating information, such as average rate, occupancy percentage, usage of package plans and other marketing programs and the no. of group rooms and complimentary or no-charge rooms occupied.
    The degree of scrutiny required during the night audit process depends firstly on the frequency of errors which relates to the quality of the front office work and secondly the volume of the transactions to be reviewed which relates to the size and complexity of the hotel operations.
The following steps are common to the sequence of a night audit :
1) Complete outstanding postings
    One of the primary functions of the night audit is to ensure that all transactions affecting guest and non guest accounts are posted to appropriate folios before the end of the day. Charges posted to wrong date will confuse guests and severely complicate cross-referencing. Posting errors can also lead to discrepancies and delays at check-out.
    Though the transactions have to be posted to the proper account as soon as they are received, the night auditor must confirm that all the transactions received by the front office for posting are been posted, before starting with the audit routine.  Incomplete posting will result in errors in account balancing and complicate summary reporting. In addition to completing posting functions, the night auditor verifies that all vouchers for revenue center transactions are posted. If the hotel does not have interfaced computerised telephone call accounting system, outstanding telephone charges may require manual posting. In case of a point of sale or call accounting system interfaced with the front office accounting system, the previously posted totals should be verified to ensure that all outlet charges have been posted. This can be done by generating printed posting reports from the interfaced  system and comparing them with the total reported by the front office account system. If the figures are identical, the systems are in balance. If they do not tally the auditor begins to compare transactions between the two systems to identify the transactions that have been omitted or improperly posted.

2) Reconcile Room Status Discrepancies
Room status discrepancies must be resolved in a timely manner since imbalances can lead to lost business and cause confusion in the front office. Errors in room status can lead to lost and uncollectible room revenues and omissions in postings. The front office must maintain current and accurate room status information to effectively determine the number and types of rooms available for sale. For example, if a guest checks out but the front desk agent fails to properly complete the check-out procedure, the guest's room may appear occupied when it is really vacant. This error in procedure could prevent the room from being rented until the error is discovered and corrected.
In manual and semi-automated hotels, before the end of the day, the night auditor reconciles discrepancies between the daily housekeeper's report and the front office room status system (the room rack and guest folios in manual and semi-automated hotels). To minimize errors, housekeeping departments typically require staff to record the perceived status of all rooms serviced. The auditor must review front office and housekeeping department reports to reconcile and finalize the occupancy status of all rooms for a given night. In fully automated hotels, the night auditor compares the daily housekeeper's report with the room status report of the system and the bucket where the registration cards for in-house guests are kept.
If the housekeeping report indicates that a room is vacant, but the front office believes it is occupied, the auditor should search for an active room folio and registration card. If the folio exists and has a current outstanding balance, there are several possibilities:
•    A guest may have departed but forgotten to check out.
•    A guest may be a skipper who left with no intention of checking out.
•    A front desk agent or cashier may not have properly closed the folio at check-out.
After verifying that the guest has left the hotel, the night auditor should process the check-out and set the folio aside for front office management review and follow-up. If the folio has been settled, the front office room status system  should be corrected to show that the room is vacant. The night auditor should verify the guest folio against the housekeeping and the room status reports to ensure that all three are consistent and in balance. In a computerized system, the check-out process is normally linked to a rooms management function that automatically monitors and updates the room's status. Few, if any, room status discrepancies should occur in a computerized front office system, but the night audit process is still necessary to ensure accuracy.

3) Balance All Departments
The night audit process can become quite complicated when errors are discovered. It is generally considered more efficient to balance all departments first and then look for individual posting errors within an out-of-balance department.
The night auditor typically balances all revenue center departments using source documents that originated in the revenue center. The night auditor seeks to balance all front office accounts against departmental transaction information. Vouchers received at the front desk and other documents are totaled and compared with revenue center summaries. Even fully automated front office accounting systems rely upon source documents to help resolve discrepancies as they arise.
When the front office accounting system is out of balance, the correctness and thoroughness of account postings must be investigated. A detailed department audit (by shift or by cashier) may be conducted and individual postings reviewed until the front office accounting error is corrected.
The process used to balance the revenue center departments is often called the trial balance. The night auditor completes the trial balance before verifying the final system balance and creating final night audit reports. The trial balance usually uncovers any corrections or adjustments that need to be made during the night audit process. Night auditors often perform the trial balance before posting room and tax charges. Doing so can simplify the final night audit procedure. If the trial balance was correct and the final balance is wrong, the auditor can deduce that the error must relate to the room and tax posting.
It is important to note that a mathematical balance in guest and non-guest accounts against departmental totals does not necessarily mean that the proper accounts were selected for posting. Posting the correct amount to an incorrect account would still present an imbalance total. This type of error usually goes unnoticed until a guest has a problem with the validity of an entry on his or her statement.
Exhibit presents a sample sequence of night audit procedures useful in departmental balancing.

4) Verify Room Rates
The night auditor may need to complete room revenue and count report such as the one shown in Exhibit. This report provides a means for analyzing room revenues since it shows the rack rate (price) for each room and the actual rate at which the room was sold. If a room's rack and actual rates do not match, the night auditor should consider several factors.
•    If the room is occupied by a member of a group or by a corporate-rate     customer, is the discounted rate correct.
•    If there is only one guest in a room and the actual rate is     approximately half the rack rate, is the guest part of a shared     reservation? If he or she is, did the second guest register.
•    If the room is complimentary, is there appropriate supporting back-up  for the rate (for example, a complimentary room authorization form)
The proper use of room revenue and count information can form a solid basis for room revenue analysis. The night auditor may be required to produce a copy of this report for review by front office management. Some hotels today measure room revenue potential against actual room revenue.
The actual room revenue posted is compared with the rack rate of the rooms occupied for the night. The comparison may be shown as a percentage. The night auditor may be responsible for calculating this number and reporting it as part of the night audit or it may be done automatically by the front office computer system.

5) Verify No-Show Reservations
The night auditor may also be responsible for clearing the reservation rack or filing and posting charges to no-show accounts. In posting no-show charges, the night auditor must be careful to verify that the reservation was guaranteed and the guest never registered with the hotel. Sometimes duplicate reservations may be made for a guest or the guest's name may be misspelled and another record accidentally created by the front office staff. If these are not identified by front office or reservation staff, the guest may actually arrive but appear to be a no-show under the second reservation.
No show billings must be handled with extreme care. A front desk agent who does not record cancellations properly may cause clients to be billed incorrectly. Incorrect billing may lead the credit card company to re-evaluate its legal agreements and relationship with the hotel. Incorrect billing may also cause the hotel to lose the guest's future business and (if applicable) the business of the travel agency that guaranteed the reservation. All front office staff must adhere to established no-show procedures when handling reservation cancellations or modifications.

6) Post Room Rates and Taxes
Posting room rates and room taxes to all guest folios typically takes place at the end of day. Once room rates and taxes are posted, a room rate and tax report may be generated for front office management review. The ability to electronically post room rates and room taxes on demand is surely one of the most frequently cited advantages of an automated front office system over manual and semi-automated systems. Once the night auditor has verified the room rates to be posted, the computer can auto-post numerous room rate and room tax charges to the appropriate electronic folios in a matter of minutes. With manual or semi-automated systems, the procedure required to post room rate and room tax can be very tedious and time consuming. In addition, automatic charge postings are accurate, with no chance for pickup, tax calculation, or posting errors. This feature can be especially important to hotels located in municipalities that have bed or occupancy taxes in addition to a sales-tax. Some automated hotels may pre-set their computer systems to post daily recurring charges, such as valet parking or gratuities. Auto-posting these charges can save night audit time and improve accuracy.

7) Prepare Reports
The night auditor typically prepares reports that indicate the status of front office activities and operations. Among those prepared for management review are the final department detail and summary reports, the daily operations report, the high balance report, and other reports specific to the property.
Final department detail and summary reports are produced and filed along with their source documents for accounting division review. These reports help prove that all transactions were properly posted and accounted for.
The daily operations report summarizes the day's business and provides insight into revenues, receivables, operating statistics, and cash transactions related to the front office. This report is typically considered the most important outcome of the front office audit.
The high balance report, as shown in Exhibit, identifies guests whose charges are approaching an account credit limit designated by the hotel (the house limit).
In a computerized front office system, the computer may be programmed to produce many management reports on demand. For example, the high balance report may be produced at any time during the day as a continuing check on guest transactions and account balances.
In addition, other reports are usually created at this time by the night audit. A report showing each group in the hotel, the number of rooms occupied by each group, the number of guests for each group, and the revenue generated by each group is common. This report helps the hotel sales department with the group history. The same type of report may be generated for guests on package plans or guests staying in the hotel due to a special promotion or advertising program. Other reports may list guests who stay frequently and guests who are  VIPs. In automated hotels, this type of marketing information can be automatically tracked, sorted, and reported.
8) Deposit Cash
The night auditor prepares a cash deposit voucher as part of the night audit process. The night auditor compares the postings of cash payments and paid-outs (net cash receipts) with actual cash on hand. A copy of the front office cashier’s report may be included in the cash deposit envelope to support any overage, shortage, or due back balances. Since account and departmental balancing often involve cash transactions, accurate cash depositing may depend on an effective audit process.

9) Clear or Back Up the System
In manual and semi-automated front office operations, totals must be cleared from the system after the night audit is complete. Manual systems are cleared by simply moving the closing balance from the night audit report to the opening balance of the next day's report. In semi-automated operations, the totals in the posting machine must be brought t a zero balance. The night auditor controls this function so that the possibility of fraud is minimized. As each account is reduced to zero, a separate card (sometimes called a Z card) is used to verify the zero balance. A Z card is usually submitted with the night audit work to show that all accounts have been properly reset. In semi-automated systems, typically only the ending balance is maintained in the posting machine.
Since a computer system eliminates the need for a room rack, reservation cards, and a variety of other traditional front office forms and devices, front office accounting depends on the continuous functioning of the computer system. A system back-up in the night audit routine is unique to computerized front office systems. Back-up reports must be run and various media duplicated in a timely manner so that the front office can continue to run smoothly.
End-of-day reports can be developed and automatically generated by a front office computer system. Normally, at least two guests lists are printed for back-up and emergency use: one for the front desk and one for the switchboard.
A printed room status report enables front desk agents to identify vacant and ready rooms should the computer become inoperable. A guest ledger report can be generated which contains the opening and closing account balances for all registered guests. A front office activity report can also be generated. Such a report contains expected arrival, stayover, and departure information for several days.
In some front office systems, the next day's registration cards are pre-printed as part of the front office activity report. Due to requirements of the Americans with Disabilities Act, hotels must also keep track of guests with disabilities. One reason for this is to ensure that all disabled guests are accounted for in case of an emergency. This report is usually produced at this time and distributed to the various departments needing this information.
Computer-generated front office information should also be copied (backed up) onto magnetic tape or magnetic disk, depending on the system configuration. A system back-up should be conducted after each night audit and stored in a safe place. Many computer systems have two types of system back-up. A daily back-up simply creates a copy of front office electronic files on magnetic tape or magnetic disk. The second type system back-up is performed once or twice a week. This back-up not only copies daily information, but eliminates account and transaction information deed to no longer be of value. For example, accounts that have been checked out for over three days and have had no activity during that time can be deleted from active computer memory. Following this procedure will reduce the overall amount of computer storage required for back-up. If any account must be researched in the future, it can be found on previously printed reports or the weekly back-up.
10) Distribute reports
Due to the sensitive and confidential nature of front office information, the night auditor must promptly deliver appropriate reports to authorized individuals. The distribution of night audit reports is the final step in the night audit routine, and is important to efficient front office operations. Informed managerial decisions can be made if all night audit reports are completed accurately and delivered on time.

















                   
           




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