nandchef

                                                            Front office cashiering

Cash Banks/cash float

A cash bank is the specific amount of cash assigned to a cashier at the beginning of his/her shift so that he/she can handle the various transactions that occur during a particular workshift. The amount is to be used for making change when guests settle their accounts, processing paid outs and for providing other cash related services.

The Bank limit is the amount the bank should have at the beginning of the shift .

Cashiers have to sign for their bank at the beginning of their shift.

At the end of a workshift, each front office cashier is solely responsible for depositing all cash, cheques etc. The cashier has to separate out the amount of the initial bank and the place the remaining cash, cheques received in a specially designed front office cash envelope. The cashier itemizes and records and records the contents on the outside of the envelope after which it is sealed and dropped into the front office vault in the presence of at least one other employee. Both employees are required to sign a log attesting that the drop was done and stating the time of the drop.

Net Cash Receipts :

It can be defined as the total amount of cash, cheques and other negotiable items such as prepaid coupons present in the cashier’s drawer minus the initial bank and paid-outs if any.

This term refers to the difference between what the cashier took in and what was paid out.

Overages:

An overage occurs when after the initial bank is removed the total of the cash, cheques, negotiables present in the drawer is greater than the net cash receipts.

Shortages:

A shortage occurs when the total amount of cash, cheques and negotiables present in the cahier’s drawer is lesser than the net cash receipts.

Due back/Due bank:

A due back occurs when the cahier accepts many cheques and large bills during a shift making it difficult to replenish the initial bank without including the cheques or large bills. Front office due backs are normally replaced with small bills and coins before the cashiers next workshift thereby restoring the cash bank to its full amount.

REPORTS MAINTAINED FOR CAHIERING

A} Front office cash sheet:

Records each receipt or payment of cash done by the cashier.

It has separate columns for guest account, non-guest account and miscellaneous transactions.

The information on this sheet is used to reconcile actual cash at hand with the total of transactions at the end of the shift

All payments and receipts should be recorded in separately allocated columns of the sheet.

All receipts are recorded on one side such as money received from guests during departure or stay, from non-guests and any other miscellaneous source while cash payments such as visitor’s paid out, are recorded to the other side .

B} Front office cashier’s report

Each cashier whether at the front desk or any other outlet such as bar, restaurant, or any other point of sale makes a daily cash report. These reports are audited and the total cash received is combined in a daily deposit. The funds are audited by the night auditor during the night.

TYPES OF TRANSACTIONS AT THE FRONT DESK

1) Cash Payment:

Cash payments made at the front desk to reduce a guest’s net outstanding balance are posted as credit transactions to the account thereby decreasing the outstanding balance of the account.

The front office uses a Cash voucher to support this transaction.

Only cash payments made by the guest at the front desk will appear onto the folio. When cash is paid for goods or services at a location other than the front desk, no entry will appear on the account folio. The “account” for that transaction is opened, increased and settled at that point of sale itself thereby eliminating the need of front office documentation and posting.

Personal cheques and traveler’s cheques are treated as cash by the front office staff. The name address telephone number has to be preprinted on the cheque. The bank account number as well as the bank routing number should be clearly printed on the bottom of the cheque. The cheque should be endorsed with a special stamp requiring payment to the hotel only. The signature of the guest on the cheque should be verified by the cashier with a photo id proof. Finally the proof of identification should also be recorded on the check such as driver’s license number.

Traveler’s cheques are required to be signed by the guest at the time of handing it over to the cashier. The cashier should verify this signature against the original on the cheque

Cashiers should be sure that the payment is in local currency and not in foreign currency A small fee is charged to the guest for currency conversion.

Most hotels use a cheque guarantee service to ensure that the cheques they accept are good. When using a guarantee service, the account number, bank routing number, cheque number and the amount are provided to the guarantee service. Guarantee services charge a fee to the hotel but hotels in most cases absorb this fee as a cost of doing business. Traveler’s cheques donot require guarantee services as long as the cheque is properly completed, signed, counter-signed and endorsed.

2) Charge Purchases:

Charge purchases refer to deferred payment transactions. In deferred payment transaction, the guest receives goods and services from the hotel but does not pay for them at the time they are provided. A charge purchase transaction is a {debit} increase the outstanding balance of a folio.

These transactions are supported by means of a charge voucher which is used for proper folio posting.

For example when a resident guest dines in one of the restaurants in the hotel he signs a check/bill {charge vouher} indicating that he will pay the amount later. The voucher is made in duplicate and one copy is sent to the front desk folio posting.

If the Point-of-sale terminals are linked to the front desk systems, the staff at the point of sale can query the front office system for guest verification, as well as post charges directly to the guest account.

3) Account Correction:

An account correction transaction resolves a posting error to the folio. By definition an account correction is made on the same day the error is made before the close of the business {that is before night audit}.

An account correction can either increase or decrease an account balance depending on the error. For instance, an account would need to be adjusted if the front desk agent mistakenly posted a lower than normal room rate for a particular guest room. So the account correction would increase the guests outastanding balance while if a charge higher than the normal room rate was accidentally posted to the folio, account correction would then decrease a guest’s outstading balance.

A correction voucher is used to document an account correction transaction.

4) Account Allowance:

There are two types of account allowances:

1) This type of account allowance decreases a guest’s outstanding balance due to compensation of poor services or rebates or discounts. Allowances may be given to airline crew and in some cases groups. These allowances are strictly controlled and therefore need authorization from the airline or group sponsor, these sponsors give a guarantee to reimburse these amounts to the hotel upon producing the necessary documentation.

Procedure for issuing allowances:

- Get instructions from the front office manager or lobby manager {who deals with airlines}

- Check names and designations of the crew or group members and determine the allowances to be given. Build it into guest folios. 

- Take out the required number of envelopes and write down the name, designation, amount of allowance and room number {if pre-registered}

- Upon arrival of the group check guest folios for the amount of allowance authorized by management. Guests claiming allowance but who donot have authorization are referred to the lobby manager.

- Ask each member eligible for an allowance for proof of identification

- Fill in details into allowance voucher.

- The voucher is signed by the lobby manger and guest and by cashier

- Hand over the original copy to the guest

- The second copy is attached to the cashier’s report and filled in the paid column.

- The third copy is maintained in the Allowance voucher book

2} The second type of allowance corrects a posting error detected after the close of the business day {i.e. after night audit}. Such an error will be separately entered into accounting records of the appropriate revenue centers, thereby correcting their accounting records. In this case also an allowance voucher is filled up.

5) Account transfer:

This transaction involves two different accounts. For example when one guest offers to pay a charge posted to another guest’s folio, the charge will have to be transferred one account to the other.

An account transfer may also occur when a departing guest uses a credit card to settle his/her account. The guests outstanding account balance is transferred from a guest account {folio} to a non-guest account{folio} through the transfer voucher.

6) Cash Advance/ Visitor’s Paid out:

They refer to cash payments made on behalf of the guest or the management for any external services rendered to them.

Cash Advances/Paid-outs are debit transactions since they increase a folio’s outstanding balance.

Such expenses are usually taxi charges, porter charges, emergency medical expenses, ticket confirmation charges, floral delivery etc.

These payments are made from the cash bank received at the beginning of the shift by the cashier.

Paid outs are only made in local currency.

Procedure for handling paid-outs:

-      Confirm the name, room no. and identity of the guest

-      Find  out details for which the paid-out is being made

-      Fill in details into the paid-out voucher. Every voucher is numbered to maintain control.

-      Get voucher authorized by the lobby manager.

-      The guest signs in acknowledgement.

-      Make the payment in cash to the guest

-      Fill in the details in the paid-out column of the front office cashier’s report.

In brief, a front office accounting system:

-      Creates and maintains an accurate accounting record for each guest or non-guest account

-      Tracks financial transactions throughout the guest cycle

-      Ensures internal control over cash and non-cash transactions

-      Records settlement for all goods and services provided

Any accounting system flows through five phases:

1) Phase I – Transaction analysis or tracking transactions.

Cash transaction, account payable transaction, cash payable   transaction / account advance transaction (VPO), account correction, account allowance.

2) Phase II- Support documentation:

Vouchers, folios, guest checks(bills).

3) Phase III- Accounting posting and maintenance:

Pre-occupancy, in-occupancy, post-occupancy.

4) Phase IV- Account auditing procedures and internal control:

Night audit.

5) Phase V- Settlement of account balances:

Cash payment in full, credit card transfer, bill to company/ direct billing