Rooms Division

Processes
Session 73
Front Office Accounting
Foundation Certificate in International
Hospitality Management

under Academic Supervision of

Front Office Accounting

under Academic supervision of

Session Objectives
By the end of this session you will be able to
Understand the importance of Accounting
List types of accounts
List types of ledgers
List types of Folios

under Academic supervision of

Accounting Fundamentals and the

Guest Cycle
Pre-Arrival: It captures data related to the type of
reservation guarantee and tracks prepayment
and advance deposit.
Arrival: Documents the application of room rate
and tax at registration.
Occupancy: A guest accounting system tracks
authorized guest purchases.
Check-out: Payment for outstanding goods and
services
under Academic supervision of

under Academic supervision of

General Concepts in F O Accounting

What is an account?
What is a Folio?
What is a Ledger?

please refer to the handouts provided

under Academic supervision of

Accounts
An account is a form on which financial data are
accumulated and summarized
It stores the results of various business
transactions
The increases and decreases in an account are
calculated and the resulting monetary amount is
the account balance

under Academic supervision of

T or a T-account:
Debit

Credit

Particular

Amt

Particular

Amt

The left side of the account is called the debit side and
the right side in the credit side.
The sum of the debit entries created by a transaction
must equal the sum of the credit entries.
This fact forms the basis for an accounting process
called night audit.

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Folio
FO transactions are typically charted on account
statements called folios.
It is a statement of all transactions affecting the
balance
The process of recording transactions on a folio
is called a posting
Some maybe handwritten in the form of a journal
or computer generated in the form of electronic
folios and can be printed, reviewed etc at any
time
under Academic supervision of

Types of Folio
There are four types of folios:
Guest folios
Accounts assigned to individual persons
Master folios
Accounts assigned to groups
Non-guest folios
Assigned to non-guest businesses
Employee Folios
Assigned to employees with charge purchase
privileges.
under Academic supervision of

Why does every folio has a

unique serial no.
They serve as identification nos. that help ensure
all folios are accounted for during an audit
.
Folio
nos. may be used to index information in
automated systems and hence show as a chain
of documentation

under Academic supervision of

Ledgers
Is a summary grouping of accounts. The FO
ledger is a collection of FO account folios
The folios represented in the FO are a part of the
FO accounts receivable ledger
An account receivable represents money owed
to the hotel

under Academic supervision of

Types of Ledgers
Guest Ledger (Transient ledger/FO ledger) for
Guest receivable
It refers to the set of guest accounts that
correspond to registered guests or to those who
have sent advance deposits. Eg Guest paying in
advance may transfer their bills to the ledger or
during their stay they settle any outstanding
balance

under Academic supervision of

Types of Ledgers
City Ledger for non Guest receivable
(Non-guest ledger): Is a collection of non-guest
accounts
If not settled in full be cash payment at check out
the folio is transferred to the accounting division
for collection

under Academic supervision of

Account Maintenance
A folio used to record transactions, which affect a
front office account balance.
Folios must be accurate, complete and properly
filed since guests may request for their bills with
no advance notice
Front Office Accounting Formulae
Previous Balance + Debits-Credits=Net Outstanding Balance

under Academic supervision of

Thank

under Academic supervision of

Recap Objectives
Now you are able to:
Understand the importance of Accounting
List types of accounts
List types of ledgers
List types of Folio

under Academic supervision of