Credit and the City Ledger
Chapter 11
The City Ledger
The city ledger references the accounts
receivable of all non-registered guests.
Other types of accounts receivable are in the
city ledger such as: travel agents,
wholesalers, client companies.
Fees- Credit card companies charge
merchant/hotels discount fees, bank cards
charge at a lower range, 1% to 2% of the
transaction.
Swiping cards and point-of-sale terminals
lower processing fees.
Debit cards electronically transfer funds
out of a person’s checking account.
Merchants automatically receive the funds
with a debit purchase.
Debit cards are the first step toward the
cashless society that futurists predict.
Smart Cards are miniature computers
almost indistinguishable from standard
cards.
Smart Cards carry a quantity of
information: credit or debit cards, ATM
cards, Identification, electronic door keys,
medical and insurance records, and more.
Cards can also be used to track customer
preferences and demographics.
Master Accounts accumulate charges for
groups. Including overnight rooms,
incidentals and function charges.
Billing discrepancies need to be resolved
as quickly as possible in order to receive
payment on time
Travel agencies can become accounts
receivable in the city ledger if guests stays
are paid in advance.
Banquet sales are also an account in the
city ledger, most events end with a balance
remaining in the ledger.
Late Charges are departmental charges
that appear after the guest has checked
out.
It is easy to charge these amounts if the
guest uses express check out, the
additional charges are added on to the
final bill.
Delinquent accounts are accounts that may
not be receivable, also called bad debts.
Executive accounts are accounts for hotel
executives that use the hotel for personal
reasons within the guide lines of company
policy
Due bills are trade out balances with other
hotels restaurants or other businesses.
Components of Credit Management
Extending Credit: Direct Billing
Application Procedures- no magic formula
for picking the safe risks from the poor
ones.
Minimizing Chargebacks: hotels fall to
collect in nearly half of all credit-card
challenges.
Monitoring Credit
Credit Card Companies establish a dollar
ceiling called a “floor”; a max the hotel can
charge to any one guest.
Credit Alerts & Alerts: typical skipper is a
30-35 yr old male with light baggage and
vague info. Heavy tipper and friendly. No
phone calls and false address. Scribbles the
reg card.
Collecting Receivables: Billing and
Chasing
Receivables are amounts owed the hotel by guests
who have not yet paid for services received.
Hotels follow a three day billing cycle for city
ledger accounts.
Following up on unpaid bills is the duty of one
person in the accounting department.
The worst of bad debts ends up with the collection
agencies.
Mechanics of the Entry
Total debits to city ledger must equal total credits
from the guest ledger both daily and cumulatively.
The transfer is made and billing takes place from
the city ledger.
Settlement is received and the debt is cleared and
the check (cash) is deposited.
These types of settlements generate cash, but some
have different formats
Travel Agency Records:Vouchers are used
instead of cash.
Frequent Guest Programs:Points are used
instead of cash. Split folios are used to
process the awards that are tendered.
Incidentals are not covered by points.
Electronic Draft Capture
Covers credit card charges that are not
posted to a folio (ie- payment for breakfast
with cc in the restaurant).
These charges become part of the
departmental cashier’s daily turn-in of cash
and credit-card sales.