FRONT OFFICE

CASHIERING &
AUDIT
CHAPTER 5
INTRODUCTION:

• Cashiering section – responsible for receiving and processing guest

payments, preparing billing statements and report of daily sales
transactions.
• Front office cashier – has the obligation to see it that all revenues pertinent
to room sales are properly received.

* Billing and collection of payments must be governed by credit policies

which vary from one hotel to another.
FORMS OF PAYMENT

• Cash – local currency. This is the most advantageous method since it

involves no risk or fraud.
• Credit Cards – this is where the credit card company advances the
payment for the card holder and the charges shall be billed to his/her
account.
• Foreign currency – dollars or other currencies. The hotel cashier must
be trained and equipped with a tool for checking foreign currencies.
The rate of change is generally lower than those offered by the banks.
Hotels accepting foreign currency re required to post the daily
exchange rate in the most visible area.
FORMS OF PAYMENTS

• Cheques – this is very risky especially if it is issued by the guests who

are strangers and not known. In some countries, the check payment is
covered by guarantee cards.
• Traveler’s cheque – issued by major banks and travel agents in fixed
denominations. The customer buys them in their own currency or in the
currency of the country being visited. Many travelers use this mode of
payment as it provides them greater security.
• Foreign cheques
• Debit cards – there are hotels that have a facility to debit guest charges
from his bank account and the transfer is done through electronic point
of sales (POS).
FORMS OF PAYMENTS

• Direct billing – the goods and services are paid at a later date after the
use of hotel services. The hotel send a bill to the company or individual
who as been given a credit line and allowed to book on charges.
• The credit approval process must be strictly enforced. The hotel has the
option to choose what companies or groups it will extend credit. The hotel
will allow the guests of account holders to sign for charges if the credit line
is granted. To minimize or avoid the creit risk, a thorough investigation is
usually conducted to determine the credit standing and the paying capacity
of applicants for credit line.
FORMS OF PAYMENTS

• Direct billing – the data needed for approval:

• Company/organization profile
• Financial standing
• References
• Independent references
• List of signatories and specimen signature

* The Sales office will furnish the Front Office with a list of organizations,
individuals or companies who have been approved for direct billing.
BILLING PROCEDURE

• Ask the guest how his/her account to be settled.

• Front desk to request passport of any foreigner or the residence
certificate number of local residents.
• See to it that registration card is properly and eligibly filled out and
contains all required information.
• Guest are required to settle room charges and other incidentals.
BILLING PROCEDURE

• Guest are only allowed to sign for charges if they have presented the
following:
• Credit card – valid, not expired or cancelled
• Letter of authorization from companies or individuals approved credit line
and in good credit standing.
• Membership card which extends signing to members. The cardholder must
in good credit standing and his membership or signing privilege is not
suspended or cancelled.
BILLING PROCEDURE

• Walk-ins/Cash Clients
• Walk-ins – without luggage or those reservations made by the guest himself w/out
prior credit card arrangements shall be required to make a deposit equivalent to the
duration of stay and shall be put in CASH BASIS. More than 2 luggage are considered
“with luggage”.
• For guest with no prior credit arrangements but who are repeat guests or have
booking history, the hotel may just require partial deposit but send reminder letter
when their account reaches a certain amount like 5,000
• For guests considered as walk-in with luggage, place the notation “walk-in with
luggage” on the registration card and guest folio. Pre-payment or deposit may not
be required but shall be closely monitored by the Front office manager and cashier.
BILLING PROCEDURE

• Private Individuals (Non-cardholders)

• If the guest indicates that the bill is to be sent to a private address, the
guest should be referred to the Front office or Duty Manager for disposition.
BILLING PROCEDURE

• Airline and Travel Agency Accounts

• A service/accommodation Voucher shall be presented and submitted to the
Desk Clerk. If it is not submitted and the guest is checking out already, the
matter shall be immediately referred to any authorized officer who will
make a decision.
BILLING PROCEDURE

• Airline and travel Agency Accounts

• For booking lay-over passenger, the Front Office will request passengers to submit the
Passenger Service order or Charge Voucher during check-in and this shall be attached to the
guest folio.
• For airline diverted/delayed flights, the Desk Clerk, upon receipt of the Manifest, shall indicate
the room number assigned to the passengers and the amount that they can charge as agreed
upon with the airline.
• The “Charge to” portion in guest folios shall indicate the proper billing instructions, such as the name of
the airline and the amount authorized by the airlines as agreed upon with the hotel, room rate and
food.
• Desk clerk shall daily inform the passenger regarding the arrangement made between the hotel and
the airline especially with regards to the mode of payment for beverages which shall be on strictly
CASH BASIS.
BILLING PROCEDURE

• Commercial Accounts with Credit line – the company should submit to

the hotel a credit application (provided by the hotel) which to be
assessed and processed by the Credit or Finance department. The hotel
will make a credit investigation to determine the paying capacity of the
applicant. Specimen of signatures of authorized signatories shall be
secured for verifying authenticity of any endorsement for check-in.
• If a company with commercial account wants to book a guest in the hotel, a
letter of authorization shall be provided before check in.
BILLING PROCEDURE

Authorization letter – provided by the guarantor before the check in of their

guest. The letter must state the items or expenses to be charged and an
assumption of liability for the charges mentioned in the letter.
PROPER HANDLING OF AUTHORIZATION
LETTER
• If the letter of authorization is presented upon registration, the Desk Clerk must always verify
authenticity of the letter by calling the company.
• If upon reservation, it was ascertained that the client is a guest of a company which has an
approved credit line and the reservation is made through the company concerned, the letter of
authorization must available before or upon check in and not later that the check out time.
• The letter must exactly state what is covered in the authorization to charges. The guest should be
notified and should be asked politely how he intends to settle charges that are not covered by
authorization.
• If a letter of authorization is not yet forwarded to the Reservation/Front Office and the guest is
checking out already, the matter should be immediately referred to the Manager authorized to
make a disposition. If the manager will authorize the check out, he should indicate his signature in
the guest folio.
CASH HANDLING GUIDELINES

• Place the bill lengthwise across the register until the end of a transaction. This can serve as
safeguard against someone who may intentionally try to confuse the cashier.
• Count change from the amount owed to the peso or dollar amount given to you by the guest.
• Traveler’s checks, cashier’s check, and bank/money order must be handled with care. Obtain
approval from management when in doubt. Be sure to get the guest’s signature on the check
or money order as well as the data on the guest’s driver license or appropriate ID. Record the
amount and the check or money order number on the guest folio.
• Mark on the gust folio that the bill was pain in cash, time-stamp, and give a receipt to the
guest.
HANDLING BILLS BY CREDIT CARD

• Desk clerk and Front Office cashier should verify the credit card if it is in the name of the guest and
has neither expired nor cancelled.
• If the card has not expired, check the cancellation bulletin to make sure the card is not stolen or
otherwise invalid.
• Know the credit card limit and credit available of card owner. If the amount to be charged appears
to exceed the credit limit, the credit card company should be contacted to approve the transaction.
• If the card presented is cut, damage or mutilated, do not honor.
• If the card is approved, imprint or swipe the card on the correct credit card voucher and fill it out
properly.
• Legibly imprint the embossed data from the card and from merchant plate on the machine on the
Sales Slip by using the imprinter.
• Front Office Cashier should require the cardholder to sign the Sales Slip in his/her presence.
Compare the signature on the sales slip with the authorized signature on the card to determine if
they match.
PAYMENT BY CHEQUES

• Check first with management what check are allowed and not allowed.
• Be sure checks are made payable to the hotel, not “to cash”
• Get management approval for second and third party checks.
• Record the amount, date, number of each check at the back of the guest
registration card.
• Do not accept post-dated checks.
• Do not refund cash from a transaction made by checks.
• Require person paying in check for proper identification like company ID, passport
and driver’s license. Write ID/passport numbers at the back of the check.
• Encashment of checks should never be allowed.
SAMPLE FORMAT OF BILLING STATEMENT
SPECIAL BILLING INSTRUCTIONS

• Special billing means that all or a portion of guest charges are to be

billed or charged to a particular person or firm. The amount to be billed
may be all his charges or just room charges.
• When reservation is being made, and the charges are to be billed to a
person or a firm with an existing credit account in the hotel, the caller
must be advised to send a letter of guarantee with assumption of
liability before the arrival of the guest.
• If a reservation is a guaranteed reservation from an individual, group or
company without existing credit line, the reserving party shall be asked
to pay a pre-payment or deposit.
RECONCILIATION AND AUDIT OF CASHIERING TRANSACTIONS:

• At the end of each shift, the Front office cashier shall prepare and
submit a breakdown of revenues per room and per guest, indicating
details and sources like laundry, room service, extra charges, etc,. This
report must be supported by vouchers, order slips and other records
that will validate the transaction.
• At the end of the day, the night auditor gathers all vouchers and all
payment transaction records from housekeeping, food outlets, etc., and
verifies if all these transactions are posted in the cashiers sales and
remittance report. It is possible that one transaction like extra room
charges has been recorded in a voucher but not accounted for in the
cashier sales report nor remitted. This discrepancy must be investigated
and the cashier shall be made accountable.
RECONCILIATION AND AUDIT OF CASHIERING TRANSACTIONS:

• The audit process must be on the look-out for unaccounted transactions resulting to
unremitted sales. That is why it is important to mandate the documentation of all
transactions that carry payments like extra charges for extended stay, cost of damage to
room facilities, mini bar charges, charges for lost items, and several others. Delivery of extra
amenities with extra pay must be accompanied by signed vouchers, delivery of laundry must
have a laundry voucher, cost of damages and losses must also be supported by vouchers.
• These vouchers must have a duplicate copy – one goes to cashier for posting in the folio and
another one for the auditor for purposes of audit and reconciliation.
• Aside from the sales breakdown, a cashiers remittance report shall be prepared showing the
breakdown or remitted sales. The auditor shall reconcile the records of sales vs. the
remittances. Any discrepancy shall be investigated.
RECONCILIATION AND AUDIT OF CASHIERING TRANSACTIONS:

• The audit process must be on the look-out for unaccounted transactions resulting to
unremitted sales. That is why it is important to mandate the documentation of all
transactions that carry payments like extra charges for extended stay, cost of damage to
room facilities, mini bar charges, charges for lost items, and several others. Delivery of extra
amenities with extra pay must be accompanied by signed vouchers, delivery of laundry must
have a laundry voucher, cost of damages and losses must also be supported by vouchers.
• These vouchers must have a duplicate copy – one goes to cashier for posting in the folio and
another one for the auditor for purposes of audit and reconciliation.
• Aside from the sales breakdown, a cashiers remittance report shall be prepared showing the
breakdown or remitted sales. The auditor shall reconcile the records of sales vs. the
remittances. Any discrepancy shall be investigated.
NIGHT AUDIT

• All financial transactions at the Front Office shall be subjected to audit

by designated officers.
• In conducting the audit, the auditor reconciles the hotel’s daily financial
transactions and other activities. The data are compiled to make a
night audit report and submitted for management review.
GUIDE QUESTION

• When is a company allowed to book a guest on charges, under a

company account?
• What will you do if a guests wants to charge his bill to his company but
the authorization letter has not been forwarded before or during check
in?
• What are the various methods of bill settlement and the advantages of
each method?