Front Office Cashiering Procedures PDF

TH2402 FRONT OFFICE CASHIERING The front office processes a multitude of charges and payments every day. Such activity requires a well- organized system to process guests’ bills and maintain the integrity of the hotel’s financial records. Effective cashiering pra...

TH2402 FRONT OFFICE CASHIERING The front office processes a multitude of charges and payments every day. Such activity requires a well- organized system to process guests’ bills and maintain the integrity of the hotel’s financial records. Effective cashiering practices streamline operations and contribute to exceptional guest experiences and financial transparency (3G E-Learning, 2024). Cashiering Procedures (3G E-Learning, 2024) The front desk officer performs cashiering functions when processing guest billing. During guest checkout, they ensure all guest expenditures are accounted for and process the payments. Here are the cashiering functions they perform. Request and maintain a cash bank for shift transactions. At the beginning of every shift, the front desk officer is entrusted with managing a revolving fund, also known as a cash float. This fund, specified by the accountant, ensures there is enough cash on hand for the day-to- day operations. The officer must conduct a thorough count of this money to ensure transparency. They manage and maintain this cash float throughout the operations, demonstrating their responsibility and trust within the hotel’s operation. Post charges and credits into guest folios. Each posting (transaction entry) is recorded sequentially in the folio in the order they are incurred on a given date. The money the guest owes to the hotel is recorded as a charge, while any payments made by the guest, including advance deposits, are recorded as credits. The posting function of the front desk officer is eased with the use of a Property Management System (PMS) since income-generating departments, like food and beverage, can automatically post charges to guest accounts. Upon check-in, the front desk officer assumes responsibility for the guest's folio, each of which is assigned a unique serial reference number for audit purposes. Throughout the guests' stay, they are on credit, availing themselves of products and services and paying only upon departure. This credit facility is extended only when guests provide proof of their creditworthiness, such as a credit card, cash deposit, or authorization from a company credit account. To prevent overspending, the hotel sets house credit limits. When a guest's bill reaches this limit, they are required to settle their charges. The front desk officer and night auditor closely monitor this process. Split or transfer guest balances to other accounts/folios as required. A split transaction is performed when guests wish to have a separate account even though they share the same room. While room charges will be reflected on one folio for convenience, other charges will be reflected individually in split folios. A transfer is when an individual in a group reservation pays for all or certain charges in other folios, which are then transferred to their account before bill settlement. These activities are easily performed in a property management system (PMS). Prepare and present the bill to guests at departure. Once the charges are posted to the guest accounts, the guest must review and confirm the bill. This confirmation ensures sound business practice. Processing refunds due to posting errors is inconvenient and time-consuming. 06 Handout 1 *Property of STI Page 1 of 4  TH2402 Process guest payments. It involves processing guest payments using the mode they prefer. Usually, the mode of payment they used for their reservations will still be used for settling their bills. Reconcile financial transactions. Reconciliation is an accounting process that ensures that the actual money spent and received matches the amount shown at the end of the shift. The actual takings can then be counted as revenue for the business for that day or shift. Below are the situations the front desk officer may encounter at the end of the shift that could impact the handling of cash and transactions: o Overage happens when the cash in the drawer exceeds the amount based on recorded transactions in the system during the shift. o Shortage is the opposite of overage, wherein the amount in the drawer is less than that of system- recorded transactions in a shift. o Par is when the cash on hand equals the amount of transactions recorded in the system in a shift. Any amount not accounted for is treated as negligence by the front desk officer, which may negatively impact the business's operations. Inaccuracy will affect financial reporting and may misrepresent the company's actual financial health. At the end of the shift, the front desk officer closes their account by generating the shift report (an outline of the activities and transactions within the shift) and turning over any pending issues and unresolved transactions to ensure continuity and smooth operation. This activity will ensure that the hotel will continue to operate as a whole and that the next employee will address all concerns for the shift. Once these processes are complete, the guest is ready for checkout. To ensure guest satisfaction, speed while maintaining accuracy must be maintained during these processes. Night Audit (Hospitality Connaisseur, 2020) Night audit (end-of-day close) is a process of auditing, a control procedure, and a regular financial inspection to ensure the accuracy of guest and non-guest accounts. The night auditor performs it, usually conducted during the graveyard shift. The transactions and records may relate to arrival and departures, food and beverage, mini-bar, laundry and other services, interdepartmental vouchers, foreign currency activities, and all payment types. Night audits can be performed manually (using papers, receipts, vouchers, coupons, and files) but can be done easily using a PMS. The main objectives of night auditing are to correct front office account errors and to create accounting and management reports. Various accounts are compared with the source documents and entries in the night audit process. Discrepancies must be corrected so that the front office accounting system is balanced. The steps in night auditing are as follows: 1. Check posting. During the day’s operations, front office employees post various transactions in guest folios. The night auditor must confirm the postings before the audit process. Charges posted with the wrong date will confuse guests and complicate cross-referencing. Incomplete posting will result in errors in account balancing and complicate summary reporting. To avoid these, the night auditor ensures all postings are correct. Switch errors are common in the front office, where numbers are reversed while entering (e.g., ₱237.00 is entered instead of ₱327.00). 06 Handout 1 *Property of STI Page 2 of 4  TH2402 2. Reconcile room status discrepancies. Errors in room status can lead to loss of revenue, confusion in the front office, or omission in posting. The night auditor reconciles discrepancies between the housekeeper’s and the front office’s status reports. Suppose the housekeeper’s report says a room is vacant while the front office report does not. In that case, there is a possibility that the guest has departed and forgotten to checkout, or the front office cashier must not have closed the folio properly at checkout. If such situations arise, the night auditor closes the folio and keeps it aside for the front office manager to review and follow up. 3. Verify room rates. The night auditor completes a room revenue and counts report. The report shows the rack rates and selling prices of rooms. Some of the activities a night auditor performs during the verification are checking the correct application of discounts against hotel policies and documents to support complimentary rates. 4. Balance all department accounts. The night auditor balances all revenue-producing department accounts. They balance all the front office accounts against departmental transaction information. The vouchers received at the front desk are totaled and compared with departmental sales summaries. When the front office accounting system is not balanced, the correctness and thoroughness of postings must be investigated. A detailed department audit and individual postings are reviewed until the front office account error is corrected. 5. Verify no-show reservations. The night auditor is also responsible for filing and posting charges to the no-show account. It should be done very carefully because, at times, a duplicate reservation is made, or separate data is created when the name of the guest is misspelled at the time of reservation. If no- shows are not recorded correctly, guests might be billed incorrectly. 6. Prepare reports. The night auditor prepares various kinds of reports that indicate the status of front office activities. The following are some of the reports being prepared: o The cashier report details the cashier’s transactions, including cash and credit card payments, adjustments, and discrepancies. o The end-of-day report consolidates all financial data and reconciles accounts to ensure accuracy before the start of the next business day. o The guest in-house report lists all guests currently staying at the hotel, including their names, room numbers, check-in and expected checkout dates, and any special requests or preferences. o The arrival list includes all guests expected to check in on the current day, including their names, reservation details, and special requests or preferences. o The departure list summarizes guests scheduled to check out on the current day, including their names, room numbers, final charges, and payment details. o The no-show report details guests who had reservations but did not arrive, including the reasons for the no-show, any charges incurred, and actions to manage the unoccupied room. o The manager’s report provides an overview of the hotel’s operations, highlighting financial performance, including the summary of room revenue generated, room occupancy, and the forecast for the next day’s business activities. 7. Deposit cash. The night auditor counts the total cash received, including coins, bills, and checks, places them in a deposit bag, and prepares a cash deposit voucher detailing the total amount of cash and checks to be deposited as part of the night audit process. The deposit bag is placed in a secure drop 06 Handout 1 *Property of STI Page 3 of 4  TH2402 safe in the hotel for depositing to the bank. The general cashier from the hotel’s accounting department will deposit it in the bank for safekeeping. 8. Create a new day. Once all processes are performed, the data for the last working date will be closed and frozen, and a new working date will then begin. 9. Distribute reports. Since the front office information is crucial, the night auditor must deliver reports to authorized individuals. The distribution of the night audit reports is the final step of the night audit process. Important managerial decisions can be made if all night audit reports are completed accurately and delivered on time. Following these procedures, the night audit team upholds financial accountability, operational efficiency, and quality assurance in a hotel. The meticulous attention to detail, reconciliation of financial data, and proactive communication with management ensure a smooth transition between operational shifts and uphold the hotel's standards of excellence. These night audit standards or procedures may vary from one hotel to another. Some properties use a PMS where several steps are consolidated into one or dissected into smaller parts for easier task handling. However, the activities performed are generally common. References: 3G E-Learning. (2024). Front office operations (2nd Ed.). 3G E-learning. Central Board of Secondary Education. (2022). Front office operations (753). Retrieved April 12, 2024, from http://cbseacademic.nic.in/web_material/Curriculum/Vocational/2018/FRONT%20OFFICE%20OPER ATIONS%20XII%20(753-754)/FRONT%20OFFICE%20OPERATIONS%20(753).pdf Hospitality Connaisseur. (2020). Everything you need to know about night auditing process: A complete guide. Retrieved April 13, 2024, from https://community.hospitalityconnaisseur.com/the-night-auditing- process/#:~:text=In%20General%2C%20The%20Night%20Auditing%20Process%20includes%20Comp letion,Distribution%20of%20reports%20and%20Preparing%20night%20audit%20report. Mandke, A. (2020). Front office management. Knowledge Management and Research Organization. Tutorials Point (2023). Front office management [PDF]. Retrieved April 7, 2024, from https://www.tutorialspoint.com/front_office_management/front_office_management_tutorial.pdf 06 Handout 1 *Property of STI Page 4 of 4