Chapter 9
Accounting Applications
Managing Technology in the Hospitality Industry
Fourth Edition
(469T or 469)
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Competencies for
Accounting Applications
1. Identify features and functions of an accounts
receivable module for an automated accounting
system and explain how managers use accounts
receivable reports generated by the accounting
system.
2. Identify features and functions of an accounts payable
module for an automated accounting system and
explain how managers use accounts payable reports
generated by the accounting system.
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(continued)
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Competencies for
Accounting Applications
(continued)
3. Identify characteristics of hospitality operations that
affect the design of a back office payroll module for
an automated accounting system.
4. Identify characteristics of hospitality operations that
affect the design of inventory and purchasing modules
for an automated accounting system.
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Accounts Receivable Module Functions
 Maintains account balances.
 Processes billings.
 Monitors collection activities.
 Generates aging of accounts receivable reports.
 Produces an audit report.
 May contain credit history data.
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Customer Master File Data
 Account code
 Contact person
 Name of guest or account
 Type of account
 Address
 Credit limit
 Telephone number
 Last payment date
 E-mail address
 Last payment amount
 Web site address
 Credit history
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Accounts Payable Module Functions
 Posts purveyor invoices.
 Monitors vendor payment discount periods.
 Determines amounts due.
 Produces checks for payment.
 Facilitate reconciliation of cleared checks.
 Generates reports.
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Vendor Master File Data
Vendor name
Discount terms
Contact name
Discount account
number
Address
Telephone number
E-mail address
Web site address
Invoice description
Payment date
Year-to-date purchases
Vendor payment priority
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Payroll Module Functions
 Maintains employee master file.
 Calculates gross and net pay.
 Prints paychecks.
 Produces payroll tax registers and reports.
 Prepares labor cost reports.
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Employee Master File Data
Company employee number
Name of employee
Address of employee
E-mail address of employee
Social security number
Job classification(s)
Wage rate code(s)
Withholdings
Deductions
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Inventory Master File
 Item name
 Product group code
 Item description (brief)
 Vendor identification
number
 Inventory code number
 Storeroom location code
 Item purchase unit
 Purchase unit price
 Item issue unit
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 Order lead time
 Minimum-maximum
stock levels
 Date of last purchase
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Inventory Status
Physical inventory: physical count of items in inventory
Perpetual inventory system: running balance of
issued/stored items
Inventory variance: differences between a physical
count of an item and the balance maintained by the
perpetual inventory system
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Inventory Valuation
First in, first out (FIFO): items are valued on the basis
of the most recently purchased items.
Last in, first out (LIFO): items are valued on the basis of
cost of items placed in storage the earliest.
Actual cost: actual cost of items stored.
Weighted average: “weights” value of items on the basis
of the quantity of items in storage at each price.
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Minimum/Maximum Purchase
Order System
Minimum inventory levels: safety level—minimum quantity
below which inventory items should not fall
Maximum inventory levels: highest quantity above which
inventory items should not rise
Usage rates: number of purchase units used per order period
Lead-time quantity: anticipated number of purchase units
taken from inventory between the time an order is placed
and the time it is delivered
Order point: number of purchase units in stock when an
order is placed
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E-Procurement
Sell-side model: placing an order directly with a supplier
over the Internet—“many to one” environment
Buy-side model: using Web-based services to purchase from
approved vendors—“one buyer, many sellers”
environment
E-marketplace model: virtual shopping mall—“many
buyers, many sellers” environment
Contract compliance: conformity to volume purchasing
contracts negotiated by hotel chains, franchise
organizations, associations, consortia, or representation
firms
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Enterprise Reporting
Enables corporate managers to monitor transactions
and affect unit-level operations:
Sorts data from units grouped by:
 Regions
 Price points
 Other variables
Implements pricing and/or accounting changes for:
 Regions
 Price points
 Other variables
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