Hotels follow the general principles of accounting, but due to the unique nature of guest accounting, hotel accounting departments use terms that may not be familiar to accountants in other industries. Accounting terms related to the management of guest payments, charges and disputes can be confusing to outsiders, but they represent everyday concepts in the hotel industry.
The record of all credits and debits associated with a guest or group is called an account and an account can be organized by sections, or folios. Common folio divisions include one each for room charges, food and beverage charges and miscellaneous charges. Multiple folios are often used with convention guest accounts, as the hotel room rate may be paid by the group while the individuals are responsible for their additional, or incidental charges.
Separation of folios allows printing options, which is useful for blind rates--when the group room rate must remain unknown to the guest. At checkout, a convention guest can present payment for incidental charges and receive a printed receipt for only the folios that contain the charges for which she paid. The balance from the room charges folio remains blind to the guest and is transferred to the group account for later billing.
Guests that have a credit card on file for an account are eligible to sign for charges to guest rooms. At the point of sale, guests sign a receipt authorizing the charge be paid by the method of payment on the account. The charge is then posted to the appropriate folio for the charge type.
The alternative to a room charge is using another method of payment for services, such as cash or credit. Guests without credit cards on file are considered cash-only guests and do not have room charging privileges.
Any charges posted to a guest account are posted, either manually or through the hotel's computer system. Computer-posted charges are known as interface postings and these are common from hotel outlets that use a cash register and point of sale system, such as a restaurant or gift shop.
When room charge is designated as the payment type, the cashier enters the guest room number and the point of sale system interfaces with the property management system to post the charge. Manual charges are posted by a hotel employee, usually front desk or accounting. These charges might come from outlets without a point of sale system but are most commonly interface postings that did not go through due to system outage or incorrect room information.
A late charge occurs when a guest signs for a room charge after checking out of the hotel. Common late charges include breakfast or minibar charges and manual postings due to system outage. Since the guest had a credit card on file, the front desk is able to use same card is used to pay for the charge. If the credit card declines, an invoice is mailed to the guest's address of record.
Advance deposits are prepayments for guest rooms or other hotel services. These deposits are commonly used to secure reservations for weddings or conventions held at the hotel. In most catering or group events, the advance deposit is required 72 hours before the event occurs. The deposit is posted to the group account and charges are posted against the account as they occur.
An allowance is a reversal of a posting. Allowances can occur due to duplicate posting, disputes or bad debt. Although a voided payment through the point of sale system can create a negative interface posting, this is a correction instead of an allowance because revenue is not reduced. Allowances are always manual posts, and department managers generally review and research large allowances that would seriously impact revenue prior to authorizing posting.