REVIEWER – FRONT OFFICE BASIC FRONT OFFICE ACCOUNTING

FORMULA
Lesson 1
Net Outstanding Balance = Previous Balance
Front office is considered as the nerve center
+ Debit – Credit
of hotel operations.
Some typical debit entries are:
Front office consists of the following sections:
1. Room Charges
a. Concierge
2. Food and Beverage Charges
b. Reservations
(restaurant, bar, coffee shop, in–room
c. Front desk
dining and others.
d. switchboard
3. Laundry Charges
e. reception
4. Guest Paid Out
TWO CATEGORIES OF FRONT OFFICE
Some standard credit entries are
 FRONT OF THE HOUSE -Interacting
1. Pre–payment (full or part)
with the guests to handle request for
2. Payment during the stay (part)
an accommodation; Checking 3. Allowance given as service recovery
accommodation availability and 4. Adjustments done due to wrong entry
assigning it to the guest. Collecting 5. Final payment to settle the account
detail information while guest
registration.
Lesson 3
 BACK OF THE HOUSE - Ensuring Account - form on which financial data are
preferences of the guest to give a accumulated and summarized.
personal touch to the service;
Guest Account - It is the record of all
Maintaining guest’s account with the
financial transactions between hotel and
accounting system; Preparing the
staying guest
guest’s bill.
Non-guest account - type of account created
Guest cycle - distinct stages of interaction for non-staying guest of the hotel but have
between the hotel and the guests; Guest other transactions with the hotel.
Cycle also represents a systematic approach
to front office operations Skippers account - type of account created
Front office personnel: for guests who leaves the hotel without
a. Bellboy settling their bills.
b. Receptionist Folios - statement of all transactions
c. Concierge affecting the balance of a single account.
Occupancy- This is the stage in the guest Guest folio - type of folio created for
cycle where guest transactions are tracked individual guest or guestroom.
by the front office accounting system. NON-GUEST FOLIO– A city folio contains
the financial transaction Front Office
Lesson 2 Accounting between a hotel and its non–
Front office accounting system - This is a resident guests.
systematic process in which the front office Master folio - type of folio created for group
accounting staff identifies, records and reservations.
summarizes financial information for hotel EMPLOYEE FOLIO – An employee folio
business. contains the credit transactions of the hotel
and its employees
The following are the stages of front office
SPLIT FOLIOS – Accounts assigned to a
accounting cycle:
guest on his/her request to split his/her
A. Creation of account
charges and payments between two personal
B. Maintenance of account folios – one to record expenses to be paid by
C. Settlement of account the sponsoring business company and the
Cash settlement include the following: other to record personal expenses to be paid
A. Foreign currency by the guest
B. Travelers’ cheque Vouchers are supporting documents of all
C. Credit cards financial transaction recorded in guest folio.
It is documentary evidence of a monetary Shortages - This occurs when the total of
transaction cash and checks in a cash drawer is less than
Correction voucher - When the night the initial cash bank + net cash receipts.
auditor sees error in posting, this is the
Due back - This occurs when a cashier pays
supporting document that should be made.
out more than she receives such that there is
Transfer voucher - type of voucher used to
not enough cash in the cash drawer to
support a reduction in balance on one folio
restore the initial cash bank.
and an equal increase in balance on another
Paid out voucher- type of voucher used to The following are sources of guest bill:
support the cash disbursed by the hotel on A. Room charges
behalf of the guest.
B. Room service orders
Cash Voucher – A voucher used to support
C. Laundry services
a cash payment transaction at the front
desk. Accounts receivable - financial
Cash Advance Voucher – A voucher used transactions where the amount is to be
to support cash flow out of the hotel, either collected by the hotel from the staying guest
directly to or on behalf of the guest of the hotel.
Point of sale - term that denotes the
location at which goods or services are Accounts payable - financial transactions
purchased. where the guest pays to the hotel against his
Ledgers - refers to summary grouping of outstanding balance
accounts.
City ledger - This is also called the non- Lesson 4
guest ledger which contain credit card Property management system - This is a
payment accounts, direct billing accounts software that facilitates a hotels reservation
and accounts past due for collection. management and administrative tasks
Semi-automated system - In this Reservation module - property
accounting system, transactions are printed management module that holds all inventory
to a machine posted folio. data and dates, sending this information to
Non-automated system - In this the front desk.
accounting system, guest folios contain a
series of columns for listing debit and credit Front desk module - the property
entries accumulated during occupancy. management module that allows a front
Internal control in the front office involves office manager to view and update room
the following reservation status, check guests in and out
A. Tracking transaction documentation and process payments.
B. Verifying account entries and
balances Housekeeping module- main function of
C. Identifying vulnerabilities in the this property management module includes
accounting system management of room status, maid
Auditing - the process of verifying front assignment for room cleaning based on floor
office accounting records for accuracy. location.
Reports and analytics - property
Front office cash sheet - This is the form management module that generates night
that cashiers used to lists or record receipt or audit reports, room and tax reports,
disbursement of cash. arrival/departure reports, etc.
Cash bank - This is the amount of cash
assigned to a cashier so that he/she can
handle the various transactions that occur Lesson 5
during a particular work shift. Night audit- called end of day process
Overages - This occurs when the total cash where financial transactions for the day are
and checks in a cash drawer is greater than reviewed and verifies.
the initial cash bank + net cash receipts High balance report - This is a detailed
report about the guests who have exceeded
the credit limit set by the hotel management.
Night audit counter report -This is a night
audit report that gives details on cash and
credit card receipts and withdrawals.

Night Audit Accommodation Report − It

gives a snapshot of the days when
accommodations are occupied, the days
when the accommodations are available,
check-ins, check-outs, no-shows, and
cancellations. This report can show further
details for any of the items listed above.
Night Audit Tax Report − Contains all the
tax information on reservation revenue and
other POS revenues such as VAT, luxury tax,
and service tax.
Cashier’s report − It is the detailed list of
cashier activity of cash influx and out flux,
credit cards, and PMS totals. Cashier’s report
is very important part of the financial control
system of a hotel. The front office manager
reviews the night audit and looks for any
divergences between the actual amount
received and the PMS total.
Manager’s Report − It is a statistical list of
previous day’s occupancy. It includes details
about available accommodations, occupied
accommodations, sold and vacated
accommodations, rack-rate, number of
guests in the hotel, number of no-shows, and
so on
High Balance Report − This is a detailed
report about the guests who have exceeded
the credit limit set by the hotel management
Posting- the process of recording guest
charges and payments (increasing and
decreasing assets and liabilities).

The following are debit entries:

A. room charge
B. Use of hotel facilities
C. Restaurants/bar/room service
Credit posting - This type of posting
reduces the guest’s outstanding balance.

Debit posting - This type of posting

increases the outstanding balance in the
guest account.
Night auditor - This is the front office
personnel responsible for reviewing financial
activities of the hotel.