Ledger and Types
The ledgers are a group of accounts. There are two ledgers the front office handles −
Guest ledger − A set of all guest accounts currently residing in the hotel.
Non-guest ledger − A set of all unsettled, departed guest accounts.
There are two other types of ledgers used in the hotel. Both types of ledgers are used by back office accounting section as given −
Receivable ledger − The back office accounting staff mails the bills and statements to the guests after their departure without settling the bills and ensures the payments for services provided.
Payable ledger − The staff handles amounts of money paid in advance on behalf of the guest to the hotel for future consumption of goods and services.
There are various issues regarding account settlement −
Orientation of Account Settlement
By Guest − The guest settles own account by cash/credit card/cheque.
By Organization − The organization settles guest account by transferring money to the hotel account.
Methods of Account Settlement
There are following popular methods of account settlement −
Account Settlement in Local Currency − A guest can pay in terms of a local currency where the payment is not chargeable with conversion fees.
Account Settlement in Foreign Currency − If the guest prefers to pay in foreign currency, the service of payment by the bank is chargeable for around 3% to 6% of the total payable amount.
Account Settlement Using Traveler Check − Travelers? cheques, the pre-printed cheques in the denominations of major world currencies are a good option to paying by cash.
Debit Card − Use of magnetic cards for payment against account is most common today. Paying by debit cards is as good as paying by cash as the amount of money is instantly transferred from the guest's bank account into the hotel's bank account.
In case of credit card settlement, the accounting staff mails the charge vouchers signed by guests to the credit card company; preferably within a specified time. The credit card company then settles the guest account by transferring money against it.
Credit Settlement by Organization − Many national, international, private, or public organizations send their employees or students for attending workshops, seminar, or meetings. Such organizations tie-up with the hotel for paying the bills of their employees on credit. The organizations reserve accommodations depending on the number of room nights (number of rooms, number of nights the representatives are expected to occupy). This is popularly known as account Settlement using Direct Billing.
In direct billing account settlement, the front office staff verifies guest folios and transfers the guest account to non-guest or city account. The hotel's back-office accounting verifies the guest folios and is responsible to collect the direct billing amount from a direct billing agency such as embassy, university, or organizations.
The accounting section also notifies the guests that if the direct billing agency fails or refuses to pay the charges then the guests need to settle the account by paying them from their pocket.
Combined Account Settlement − A guest can settle account by paying partial amount in cash and remaining amount on credit. The front office staff needs to prepare the supporting document for such kind of payment and hands it over to the back-office accounts.