Guest services and guest accounting aspects of the guest cycle are completed during the cycle’s fourth and final phase that is departure. At Departure the guest vacates the room, receives the accurate statement of the settled accounts, returns the room keys and leaves the hotel. Once the guest has checked out, front office updates the room’s availability status and notifies the housekeeping department. The front office performs at least three important functions during the check-out and settlement process:
- It resolves outstanding guest account balances.
- It updates room status information.
- It creates guest history records.
The last interaction of the guest with the hotel staff takes place during the final phase of the guest cycle check-out. The departure procedure may vary slightly from hotel to hotel according to the degree of automation of the organization. The following steps are involved in the departure procedure in manual or semi-automated systems:
- The check-out request is received at the front desk or bell desk.
- Send bell boy to transfer the guest’s luggage
- The bell boy fills the departure errand card.
- Send departure notification slips (DNS) to all concerned departments
- Alert all points of sale to rush last-minute credit transactions
- Update the guest folio
- The guest arrives at the front desk and hands over the room keys.
- The cashier prepares the master bill and presents for review.
- The payment is received from the guest
- The front desk makes the ‘luggage out’ pass
- Marketing activities are carried
- Communicate the check-out information to other concerned departments.
- The front office assistant updates the following front office records:
- Current room status
- Guest history card.
- Arrival/Departure registers.
Departure Procedure in Fully Automated System
The departure procedure in a hotel running on a fully automated system is smoother and more efficient. It involves the following steps:
- The check-out request is received at the front desk or bell desk.
- The front desk sends a bell boy to transfer luggage from the guest room to the lobby.
- The front desk informs all points of sale and other departments of the hotel about the departing guest through the interlinked computer network.
- Since all the points of sale terminals are interlinked, any credit transaction of the guest will instantaneously get added in the guest folio.
- The front desk prepares the master bill by selecting the bill option of the cashier module.
- The front office presents the master bill, along with supporting vouchers, to the guest for review.
- The payment is received from the guest as per the pre-determined mode of payment.
- The front office makes the luggage out pass.
- The front desk communicates the departure of the guest to housekeeping and all the other concerned departments.
- The front office records are updated automatically. These include:
- The auto removal of the name of the departed guest from the in-house guest name list.
- The automatic updating of the current room status—from occupied to vacant/dirty.
- The automatic updating of the guest history card.
Methods of Settlement
Regardless of whether the guest intends to pay by cash, credit card or any other acceptable method of payment, the hotel should take precautionary measures to ensure payment. Effective account settlement depends on the steps taken during registration. Common methods of payment include
a. Local currency
b. Foreign currency
2. Travelers cheque
3. Personal cheque
4. Demand draft
5. Debit card
2.Travel Agent Voucher
4.Bill to Company
Cash: Some guests prefer to pay guest room charges during registration in advance of occupancy. These guests are typically not extended in house credit. Revenue outlets are usually given PIA (paid in advance) lists. They are not authorized to have charge purchases posted to their guest room account.
Procedure for accepting local currency:
- Count cash in guest’s presence
- Confirm amount with guest before putting it into the cash drawer
- Count change, if any, and return to guest (Count twice)
- Issue a receipt to the guest
- Keep duplicate copy of printed folio for balancing of cash float at end of shift
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 local 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.
Traveler’s Cheque: A traveler’s is a preprinted, fixed-amount cheque designed to allow the person signing it to make an unconditional payment to someone else as a result of having paid the issuer for that privilege. Traveler’s cheques are most often used by those traveling because they are widely accepted as payment in many parts of the world, yet can be replaced if lost or stolen by the issuing financial institution. A customer should be able to purchase traveler’s cheques from most major financial institutions. At the time of purchase, the customer will be required to sign each individual traveler’s cheque. The signature is one of the security features of traveler’s cheques as the user will be required to countersign the check at the point of redemption. If the signatures do not match, the cheque will not be accepted.
At the time of purchase, the customer should be provided with a listing of the serial numbers of the cheques that were purchased. If any cheques are reported lost or stolen, most banks will require the customer to provide the serial numbers of the missing cheques. This allows the bank to verify the validity of the claim and the checks. Even though traveler’s cheques can be replaced if lost or stolen, it is recommended that the user treat them as carefully as they would cash. The user should keep track of the cheques that are used as they are redeemed. The customer should also keep the traveler’s cheques purchase agreement and listing of the serial numbers separately from the cheques themselves.
Traveler’s cheque Procedure
In most cases to accept a Traveler’s cheque the customer must produce a passport. This will show the identity and signature of the customer. An authorized Traveler’s’ cheque in local currency is treated as cash; if it is in a foreign currency then an exchange transaction must occur. Change is only given in local currency. An unauthorized Traveler’s cheque is one which has been sign only once at issue, in otherwise the space for countersignature is empty.
- Issue the bill.
- Accept the unauthorized traveler’s cheque.
- Accept the identification either a passport or an official ID card.
- Ask the customer to countersign the cheque.
- Check the signature and photograph matches that on the identification document!
- It is advisable to write down the passport or ID number on the back of the traveler’s cheque.
- Check the amount of the traveler’s cheque and treat it as cash
- Give the customer change or accept additional cash to meet the bill.
- Place the check in the till drawer.
Cheque Payment: Out of all the credit instruments, cheques have the highest percentage of risk involved. Most hotels specify that cheques are not accepted but there may be situations when cheques have got accepted.
Demand draft: A demand draft is a negotiable instrument similar to a bill of exchange. A bank issues a demand draft to a client (drawer), directing another bank (drawee) or one of its own branches to pay a certain sum to the specified party (payee).
Debit Card: Debit cards are embossed plastic cards with a magnetic strip on the reverse side that authorize direct transfer of funds from a customer’s bank account to the commercial organization’s bank account for purchase of goods and services. These are similar to credit cards in that they guarantee credit worthiness, against which the hotel charges the bill; however, the payment is deducted directly and immediately from the guest’s personal account and transferred to the hotel’s account rather than being billed to the guest on a monthly basis. Debit cards continue to gain in popularity as the use of credit cards becomes more costly to the guest. Debit cards are processed similarly to credit cards. To process a debit card payment, the following procedure is used:
- Insert the debit card into the validation machine.
- Have the guest enter his or her personal identification number.
- Process the debit-card voucher as a cash payment on the guest folio.
Credit Card: A credit card is a payment card issued to users as a system of payment. It allows the cardholder to pay for goods and services based on the holder’s promise to pay for them. The issuer of the card creates a revolving account and grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user.
Credit Card Procedure
- Present the charge record form to the guest and receive his signature on it.
- Check the following to establish the validity of the card.
- Whether the credit card is accepted by the establishment
- Expiry date of Card. The card should be within expiry date.
- Compare the name and number with the cancellation bulletin circulate periodically and ascertain if the credit card is black listed.
- Any alterations on the card.
- Compare card holder’s signature on the credit card with that on the charge record form.
- Return card, top copy of voucher or bill and the customer slip of credit card to guest.
Travel Agent Vouchers: This is an extension of the city ledger system. The guest should handover the original voucher at the time of registration. This voucher will keep along with the guest folio or bill. The billing instructions are mentioned in the voucher and accordingly the data is entered in the guest bill. The hotel sends the original vouchers along with the guest bill and the departmental voucher for the payment to the travel agent after the guest departure. The travel agent settles the bill after subtracting his commission. On receiving the payment the hotel issues a receipt to travel agent.
Direct Billing: Some guests extend credit to guests by agreeing to bill the guest or guest’s company for charges. Direct billing arrangements are normally established through correspondence between the guest or company and front office. A potential guest or a sponsoring company representative may be asked to complete the hotels application for credit. Front office manager revives it and is responsible for approving a guest credit application. A list of direct billing account is maintained at the front desk. At checkout the guest signs on the folio. Account transferred to appropriate city ledger account. Credit control department is responsible for payment collection. – This method is acceptable only when billing has been arranged and approved by the hotel’s credit department. – The guest has to sign the folio to verify that it is correct and he/ she accepts the responsibility for all the charges contained on the folio (should the direct billing account not pay the bill).
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.
Potential Check-out Problems and Solutions
The following problems may occur during the departure of a guest:
- Late check out
- Long queues at the cashier counter
- Improper posting of charges in the guest folio
Late check out
If a guest vacates his room after the check-out time, it is considered late check-out. This may create a problem, especially during high occupancy periods, as the guests with confirmed reservations will be required to wait for the room to be vacated and cleaned. A hotel may take the following preventive measures to minimize late check-outs:
- Inform the guest about the check-out time and late check-out charges at the time of reservation and also at registration.
- Have the information regarding the check-out timings printed on the key card and displayed at the back of the room doors.
- Add the late check-out charges in the guest bill.
- Request the guests to vacate the room as per the check-out time and offer to keep their luggage in the left luggage room at no extra cost.
- In case of groups, provide hospitality rooms without any extra charges.
Improper posting of charges in the guest folio
There are occasions when a guest’s financial transactions are not properly posted in the guest folio and the final bill is inaccurate. This might be due to human error or system error. The front desk is flooded with check-out requests at peak checkout times and the cashier might make some mistake in the posting of charges or the calculation of bills. This could lead to a dispute with the guest and delay other guests in the queue. The whole experience can be quite damaging for the hotel. To avoid this, hotels should install guest accounting systems, which are more accurate and faster, leading to higher guest satisfaction.
Long queues at the cashier counter
The standard check-out procedure, involving number of steps dealing with the presentation and settlement of bills, takes some time. As more and more guests now want a speedy and queue-free check-out, hotels are coming up with alternatives to the standard check-out. These alternative methods are:
- Express check-out
- Self check-out terminals
- The express check-out procedure requires the guest to fill the express check-out form and a pre-departure folio.
- The ECO form is an authorization by the guest to the hotel authorities to charge the outstanding balance to his credit card. By signing the ECO form, the guest agrees to pay the amount finalized by the front desk cashier after his departure.
- These forms are available at the front desk or are sent to the guest on the morning of the date of departure.
- The ECO form is accompanied by a copy of the guest’s folio, indicating the approximate total bill.
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.
Self Check-Out Terminals
Only fully automated hotels are equipped with self service terminals, which allow guests to check-in/checkout promptly by operating these interactive machines. The self check-out terminals have the following benefits:
- They minimize the guests’ waiting time
- They simplify the check-in and check-out
- They eliminate the scope of human error
Difference between an Ordinary Cheque and a Traveler’s Cheque
|Ordinary cheque||Travelers cheque|
|For issuing a person should have a bank account (either current or saving).||No need of any bank account for purchasing and en-cashing of traveler’s cheque.|
|Any amount can be filled in the cheque as they are blank.||Have a fixed amount printed on its face and available in different denominations.|
|Only one signature is needed of the holder.||Two signatures are required (one in the presence of the issuing authority and second in the presence of encashing authority).|
|Ordinary cheques are valid only for 3-6 months.||Valid for indefinite period of time unless dated.|
|These cheques can be crossed for account payee.||No such provision.|
|No slip/list of lost, damaged or stolen cheques is issued by the bank.||Many banks issue a stop list for stolen and damaged cheques.|
|Cheque may bounce as the balance in the account may be less than the cheque||No such possibility as the amount is already printed on the face of the cheque.|
|Not safe as someone might force the owner to sign the cheque.||Quite safe because the second signature have to be put in front of the en-cashing authority.|
Unpaid Account Balance
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 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.
Account aging usually refers to the methods of tracking past due accounts in accounts receivable based on the dates the charges were incurred. Account aging can also be used in accounts payable, to a lesser degree, to monitor payment history to suppliers. Most city ledger accounts are usually settled within 30 days of billing, and some city ledger accounts may take longer than 30 days to collect. The hotel should establish methods for tracking past due to accounts based on the date the charges were incurred. This practice of scheduled billings is normally referred to as account aging. Accounts that are less than 30 days old are considered current, that are older than 30 days are considered overdue, that are older than 90 days are delinquent.