B. Sc.

H H A (2nd Year)

CHECK-OUT AND SETTLEMENT

When the guest wishes to check out, he rings up the reception and informs them. This
information will be passed on to all major departments of the hotel by the front office assistant in
order to make them aware of the check-out. Any pending bills of the guest will be forwarded to
the front office. The front office staff prepares the final bill. The bellboy goes to the guest room
with the trolley, if required, to carry the luggage. He knocks on the door, enters inside and loads
the luggage. The bell boy also observes the room for any damaged hotel properties and guest
articles. He collects the room keys, locks the room and escorts the guest to the front desk.

The bellboy will hand over the room key to the front office assistant. The final bill is offered to
the guest and the mode of settlement is once again confirmed. The guest verifies the charges
and settles the bill. After receiving the payment, the front office assistant brings the guest
account into zero. This procedure is called as zeroing out.

It might also happen that the guest is not settling the bill at the time of departure. In such a case,
the account is transferred into city ledger for billing purpose. The front office assistant updates
the room status (from occupied to dirty vacant) and the GRE takes the feedback from the guest.
The bellboy calls for the cab or the car and loads the guest luggage before wishing him a happy
journey.

At check-out, the front office assistant should follow these guidelines:

1. Check for mails, messages or fax

2. Check for safe deposit box or in-room safe keys
3. Post all outstanding charges and check for any discount to be given
4. Verify account information ( as a guest may wish to change the mode of payment that he
had confirmed at the time of registration)
5. Inquire about additional recent charges
6. Present the guest folio for verification
7. Verify the mode of payment
8. Process the account payment (zeroing out the account)
9. Update the room status

The process of check out varies from hotel to hotel depending upon the accounting system
adopted by the hotel. In some hotels, the guests can check-out themselves through express
check-out. Though the guest may not come to the front desk in case of express check-out, it is
the responsibility of the front office to ensure account settlement and updating the room status.

Role of Cashier - Cashiers are responsible for taking payments from customers, making
change and giving receipts for the payments received. They generally operate a cash register or
an adding machine. Most modern cash registers automatically add the price of items, total them,
open the cash drawer and provide a receipt. In most large hotels, these functions are performed
by the hotel PMS. Cashiers may also be responsible for taking care of the safe deposit lockers
in which a guest may store his valuables or documents.

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B. Sc. H H A (2nd Year)

Self Check Out – Some hotels have self check-out terminals in the lobby. The guest can do the
settlement in this machine without going to the reception. The terminal is linked with the front
office computer and the check-out of the guest is notified. Self check-out saves time and
reduces the rush at the front desk.

Express Check Out – Express check-out facility can be availed only by the guests who have a
credit card. With ECO, a guest can save his time by not going to the front desk for bill
settlement. It is the duty of the front desk staff to remind the clients about the express check-out
facility, if it is available in the hotel.

Procedure – The procedure for express check-out is as follows –

1. Obtain the credit card from the guest and take its impression on the charge slip and on a
express check-out slip
2. The signature of the guest should be obtained on the charge slip
3. Offer the copy of the express check-out slip to the guest
4. Inform the guest about the need to wrap the room key along with the slip
5. Inform the guest about the location of the ECO box in the lobby
6. Give the yellow copy of the ECO slip to the Lobby Manager and file it as per the check-
out date of the guest
7. Before the actual check-out date of the guest, the lobby manager takes out a copy of the
guest invoice and sends it to the guest for verification
8. The front desk agent should attach the charge slip and the third copy of the ECO slip
with the registration card of the guest

HOTEL ABC
EXPRESS CHECK OUT AGREEMENT

Cashier, please check me out of Room No ………………. on ……………… (departure date) at

………….. Hrs (departure time)

I authorize to charge my credit card imprinted on my Sales Draft for the amount of all costs
incurred during my stay.

Guest Name …………………………………………………..

Guest Signature ………………………………………………
Check-in Date …………………………………… Check-out Date ………………………………..

Please forward a copy of the invoice to the below mentioned –

Email/ Address …………………………………………….........
…………………………………………………………………….
…………………………………………………………………….

Note: Please drop your ECO slip and Room Key into the ECO box kept near the Reception Counter

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 B. Sc. H H A (2nd Year)

METHODS OF GUEST ACCOUNT SETTLEMENT – A guest account can be settled by using

one or more of the following methods –

1. Discounts or Allowance – In case of 100% discount or complimentary accommodation, the bill

is not raised at all. However, in some cases, the bill is raised and the discount may be extended
later to determine the total consumption. In some cases, the guest may not be satisfied with the
services of the hotel and the management may decide to extend 100% allowance.

2. Cash – The cash payment is one of the most popular methods of settlement of invoices. Cash
may include payment in the local currency or in any foreign currency that is accepted by the
hotel. The cashier receives the payment and prepares a receipt for the same which is handed
over to the guest. The corresponding entry for the receipt is made on the system in order to
make the balance zero. If the guest is making the payment in foreign currency, the balance
amount is refunded in Indian rupees. An encashment certificate mentioning the details of foreign
currency exchange is also handed over to the guest and a copy of the same is retained by the
cashier for records. Before receiving payments in foreign currency, the cashier must ensure that
the guest is holding a valid passport and a copy of the same must also be collected as it is a
legal requirement for the hotels.

3. Credit Card/ Debit Card Settlement – It is also referred to as plastic money and is gaining
popularity all over the world. It is a very safe way to carry your money without bothering about a
fat wallet. Although they look similar, there are a few basic differences between a credit card
and a debit card which are as follows –

a) The details of the card holder and the card number are embossed on a credit card while
in case of a debit card, the details are printed on the card
b) A credit card can be used to take offline sale (charging the card without actually swiping
it through EDC machine) whereas a debit card has to be swiped in order to complete the
transaction
c) Manual transactions can be done on a credit card while the debit card is for electronic
sale only
d) The payment for a credit card has to be done later to the bank. In case of debit card, the
account is debited immediately on completion of transaction
e) A credit card may be used to make payments even if the account balance is less than
the amount to be paid. A debit card can be used to make payments equal to or less than
the account balance

The credit card or debit card has an amount authorised by the bank which is called the floor
limit. In order to complete the transaction, it is important that the amount to be billed is less than
the floor limit. There are some important things that the cashier must keep in mind before
accepting the card –

i) The credit card should be accepted by the hotel

ii) The card should not be expired
iii) The card holder has signed at the back of the card in the space provided

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B. Sc. H H A (2nd Year)

Once the above details are verified, the cashier swipes the card and enters the amount to be
charged on the EDC machine. The machine connects the hotel to the bank server via a
telephone line. Once the connection has been established and the amount requested by the
hotel is available in the guest’s account, the EDC prints out a transaction slip in duplicate. The
first copy is called the merchant copy and the second copy is called as the customer copy. The
cashier takes the card holder’s signature on the merchant copy and the corresponding entry is
made on the system as well. The invoice is printed in duplicate (in automated systems, the
computer is programmed to print invoice in duplicate by default). The merchant copy and a copy
of the invoice is retained by the hotel while the customer copy attached with the duplicate copy
of the invoice is handed over to the guest.

At the end of the day, the cashier prints out a batch report enlisting all the transactions taken on
the card during the entire business day. This report is used to tally all the transactions
individually and to ensure that no transaction slip is missing. This helps to recover the payments
from the banks on the next day.

Advantages and disadvantages of Credit Cards –

A) For Credit Card Holder –

Advantages –

i) Card holder need not carry cash and can buy with the credit card
ii) Purchases can be made without having enough balance in the bank account as the
payment has to be made after a month
iii) The card holder gets a consolidated bill for payment. This helps him to know the total
amount he has spent
iv) The income tax authorities accept the consolidated bill for giving rebates

Disadvantages –

i) The card holder has to pay annual membership fees

ii) Purchases can be made without having enough bank balance which may cause the
card holder to overspend
iii) The interest charged by the bank for late payments is very high
iv) The card holder can purchase from only selected shops that accept credit cards

B) For Hotels -

Advantages –

i) By accepting credit card as a mode of payment, the hotel offers additional services
ii) Guests who do not wish to carry cash can avail the facilities at the hotel

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B. Sc. H H A (2nd Year)

iii) Hotels can take pre-authorisation on a credit card which ensures them of their
payments
Disadvantages –

i) Hotel has to pay annual subscription and initial membership fees

ii) Hotel has to pay for 5-10% transaction fees for all transactions on the cards
iii) The payment is received after 7-15 days (in some cases 30-40 days) and the hotel
gets no interest for the delayed payment

C) For Card Issuing Authorities -

Advantages –

i) They get annual subscription fees and initial charges from the card holder and the
hotel
ii) They earn 5-10% commission from hotels besides the payments received from card
holders
iii) They charge heavy interest rates for defaulters

Disadvantages –

i) The cards are extended to various persons and sometimes there is a danger of bad
debts
ii) They have to appoint staff for maintaining the credit card accounts
iii) The charge slips, imprinter etc. are supplied by the establishments which costs
money
iv) The black listed member’s bulleting has to be sent to all member establishments

FOREIGN EXCHANGE - Foreign exchange is one of the most common modes of payments in
the hotels, especially when a large number of hotel guests are foreigners. In order to exchange
currency, hotels must obtain a license from the RBI (reserve Bank of India). This ensures that
the transactions involving foreign currency are legalised. It must be remembered that the hotels
in India are authorised only to purchase foreign currency and not to sell or transact in it. This
means that the hotel can take foreign currency as a mode of payment or given Indian currency
in exchange but cannot give any balance or exchange Indian currency for a foreign currency.

Authorised Agency – Under the direction of RBI, certain organisations have been given
authority to deal with foreign currency under license. These organisations may fall under one of
the following categories –
1. Hotels
2. Travel Agencies
3. Money Exchange Centre
4. Banks
5. Airport Money Exchange Counters

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B. Sc. H H A (2nd Year)

In case of hotels, there are certain terms and conditions which are applicable for the process of
exchange of currency –

1. Currency exchange can only be done by a resident guest

2. A guest can only buy Indian currency against the foreign currency
3. A guest cannot exchange denominations of a foreign currency
4. A guest cannot request for the balance amount to be paid in the foreign currency of his
choice

In order for a hotel to be able to do a foreign exchange, the RBI requires the following
documents –

1. Incorporate Certificate
2. Insurance
3. Identification of owner or Board of Directors
4. Currency License

Documents – In order to accept a foreign currency legally, it is important that the exchange of
money is shown in the book of accounts. Such documents have to be produced as and when
requested by the RBI. A strict system of checks and records has to be incorporated to avoid any
illegal transaction of foreign currency. The front office cashier is authorised on behalf of the
management to deal with foreign currency whenever a guest wishes to exchange the foreign
currency or traveller cheque.

A hotel is also required to display the rate of exchange of all the major currencies so that is easy
for the guest to determine the exchange rates on that given day. The rate of exchange can be
checked from any local bank dealing in foreign currency. Most hotels have tie-ups with money
exchange centres such as Thomas Cook or American Express who send the daily exchange
rates to the hotel.
Procedure for accepting foreign currency –

1. Find out the currency the guest wishes to exchange. In case the required currency is not
exchanged by the hotel, the guest should be refused politely and should be guided to the
nearest money exchange centre.
2. Request the guest for his room number and passport. This ensures that the guest is a
resident guest of the hotel and the passport serves as an ID proof.
3. Inform the exchange rate of the currency to the guest and confirm with the guest if he
wishes to proceed with the exchange
4. Fill all the details in the foreign currency encashment certificate. In case of computerised
systems, the details are updated on the system
5. Collect the foreign currency from the guest and check if all notes are in proper order.
Damaged and worn out currencies are generally not accepted. In case of traveller

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B. Sc. H H A (2nd Year)

cheques, the guest has to be requested to counter sign the cheque in presence of the
front office cashier. This signature is then tallied with the first signature done on the
cheque at the time of purchasing
6. Sign on the encashment certificate after updating all the information and request the
guest to counter sign the same
7. Compare the signature on the encashment certificate with that on the passport. Keep a
photocopy of the passport as a record
8. Calculate the total amount to be handed over to the guest in local currency by
multiplying the value of foreign currency with the exchange rate of the day. In case of
computerised systems, this task is performed by the system
9. Hand over the Indian currency to the guest along with a copy of the encashment
certificate. It is suggested that the Indian currency is counted in front of the guest so that
the guest is also familiar with the denominations and is assured that he is being handed
over the correct amount.
10. The entry of the foreign currency exchanged is done in the cash book for records
11. The foreign currency exchanged along with a copy of the encashment certificate is sent
down to the finance department at the end of the shift

Different (Major) Currencies and their Forex Rates

Country Currency Approx Exchange Rate

Australia Australian Dollar 48.00

Bahrain Dinar 122.00
Canada Canadian Dollar 46.50
China Yuan 07.20
Denmark Kroner 08.60
Egypt Egyptian Pound 07.70
European Union Euro 64.50
(Member Nations include Austria, Belgium, Cyprus, Estonia, Finland, France, Germany,
Greece, Ireland, Italy, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia and
Spain)
Japan Yen 00.60
Kuwait Kuwaiti Dinar 168.20
Malaysia Ringgit 15.45
New Zealand Dollar 37.80
Oman Omani Riyal 119.80
Saudi Arabia Saudi Riyal 12.25
South Africa Rand 06.40
Singapore Singapore Dollar 38.00
Switzerland Swiss Franc 53.40
United Arab Emirates Dirham 12.50
United Kingdom Pound Sterling 81.40
United States of America Dollar 53.00

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B. Sc. H H A (2nd Year)

Category of Guests Entitled

Exempted Customers – The following guests can pay their bills in Indian Currency –

a) Foreign nationals employed in India and whose salary are paid in Indian currency
b) Diplomats and official guests of diplomat missions in India, including officials of the
United Nations and other international organizations
c) Citizens of this countries with whom India has Rupee Payment agreement. This means
that the citizen of that country can pay or receive money in rupees. Some of these
countries are Russia, Nepal and Bhutan
d) Employees of shipping companies and airlines along with their crew members
e) Foreign nationals on a visit to India on invitations from Central or State Government
f) Foreign students studying in India on invitation from the Central Government
g) Foreign nationals on a visit to India at the invitation of any person who is resident of
India
h) All foreign nationals visiting India who have brought in foreign currency which has been
exchanged in India at any of the authorised currency exchange offices (as it is not
allowed to take Indian currency outside the country)

Non-Exempted Customers – A foreign traveller who has entered into India and has checked-in
to the hotel directly is expected to pay in the foreign currency unless he wishes to pay by a card
(in which case, the payment is again deducted in the currency of his citizenship). However, as
an exception, a guest may be allowed to make payment of his hotel bill in Indian currency if the
guest exchanged money from any authorised money exchange centre and has to fly out of the
country after checking-out from the hotel.

For all payments received in any foreign currency, the front office cashier must follow all the
steps that are involved in the currency exchange procedure.

TRANSFER OF GUEST ACCOUNTS

Bill To Company – Most hotels make an agreement with all the major companies or with the
companies that provide them with regular business. In such case, a hotel may enter into an
agreement with the company where the hotel allows the company to make the payments for its
guests staying with the hotel at a later stage. The company sends a letter to the hotel enlisting
the details of the guest, duration of stay and the specific billing instruction. The hotel, in turn,
processes the bill accordingly and sends it to the company after the guest check-out for
payment. The duration which the company is allowed to make the payment is called the credit
period which may range from 7 days to 30 days depending upon the credibility of the company
and the amount of business the company gives to the hotel. In case of bill to company, the
cashier must ensure to take the guest signature on the invoice and attach all the supporting
vouchers and billing letter so that the payment can be processed without any delay.

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B. Sc. H H A (2nd Year)

Airline Voucher – Airlines give a large number of guest nights to the hotel in the form of crew
members, layover passengers, their own employees etc. Airlines issue credit vouchers while
making reservation on behalf of their layover passengers, crew etc. The bill is raised, signed by
the guest at the time of the check out and sent to the account department along with the
voucher for collection. The bill is transferred to the ledger account and the balance is carried
forwarded to show the account balance as zero.

Travel Agent Voucher – A hotel honours a voucher from a travel agent only when the travel
agent is enlisted on the credit list of the hotel. However, the only difference is that in case of bills
being sent to the travel agent, the signature of the guest is not required as there are special
rates extended to the travel agents which neither party wants to disclose to the guest. Most of
the travel agents collect the payment from their guests in advance and issue a voucher against
the same for the hotel. The travel agent voucher is generally in duplicate – one copy is given to
the hotel and one copy is retained by the guest for his records. A cashier must take following
precautions in case of travel agency vouchers –
i) The travel agency should be listed on the hotel credit list
ii) The voucher should mention the name of the guest, the dates of stay, meal plan and
the billing instruction clearly
iii) The voucher should be duly stamped by the travel agency with authorised signature
iv) The guest should have signed the voucher at the back confirming his stay at the
hotel
v) The voucher should be attached with the invoice and sent to the finance department
vi) The charges to be billed to the travel agent should not be disclosed to the guest

Traveller’s Cheques – Traveller cheques (also known as TC) are purchased from the banks
against cash payment. They provide the traveller with a safe and secure way of carrying his
money as the traveller’s cheques are accepted by most of the leading hotel chains and are as
good as cash. A traveller cheque has two spaces for buyer’s signature. One signature is done at
the time of purchasing the cheque while the other signature has to be done in presence of the
front office cashier. The cashier must also ensure that the cheques are not predated and the
signature done in his presence matches with the signature done earlier.

The cashier should also ensure that there is no overwriting on the cheque and also that the
cheque is not torn or damaged in any way. In case of traveller cheque issued in a foreign
currency, the exchange rate is referred to before accepting the cheque and the balance amount
is refunded in Indian rupees. This process is similar to encashment of foreign currency.

The traveller cheque gives the bearer and advantage that even if the cheque is stolen, the
money can be reimbursed from the bank on presentation of a FIR. The traveller cheques come
in a predetermined amount which may vary depending on the currency in which the cheque has
been issued.

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 B. Sc. H H A (2nd Year)

Traveller’s Cheque

State Bank of India, New Delhi

Date: ___________________ Number: 23435

Please pay to M/s ________________________________________ Rs. 5000/- only (Five

Thousand Only) for the value received.

_______________________ _________________________
Customer Signature Customer Signature
(In presence of Manager) (At the time of encashment)

__________________________________
Signature of Issuing Authority with seal

Combined Settlement – There are cases in which a guest may wish to settle his account using
more than one mode of settlement. This happens especially in case of foreigners where they
may wish to use up all the remaining local currency before leaving the country and settle the
balance amount by either a foreign currency or by a credit or debit card. These cases are also
seen in case of corporate guests and guests booked by travel agents where a part of the bill is
transferred to the city ledger (usually the room charges) and the extras, if any, have to be
settled by the guest using cash, credit or debit card or by a foreign currency.

Difference between Traveller’s Cheques and Personal Cheques –

Traveller’s Cheques Personal Cheques

1. A person need not have any account for Only account holders are provided with a
purchasing or encashing a TC cheque book from the bank
2. Value of cheque is printed on the face of The value column is blank and any amount
the cheque can be filled in it
3. The customer has to sign twice The customer has to sign only once
4. It comes in specific denominations No pre-printed denominations
5. TCs cannot be crossed Bank cheques can be crossed
6. If lost, the bank has to be informed along If lost, only written intimation is given to the
with a copy of the FIR bank
7. The value of the cheque is always honoured The cheque can bounce for wrong signature
so long as the signatures tally insufficient balance, out dated etc
8. Bank managers also sign the cheque No bank manager’s signature is required
9. The value of the cheque is paid in advance No pre-payment is required. However, the

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B. Sc. H H A (2nd Year)

account must have sufficient balance to

encash the cheque

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