Any Accounting professionals out there who can help me?

Question

So my concern is about the sales ledger operations in a Hotel industry, as the Hotels sales are on room accomodation,(so selling rooms), Why do they need a credit control for their customers? I mean for their hotel guests...or issue credit notes to them? I dont understand the sales account in this hotel industry, as the customers or hotel guests pay for the accomodation when they check-out the hotel. And what type of invoices do they issue cant get it???
I am a student and curious to know about working for a hotel, as I know how to maintain a sales ledger in a wholesale or retail trade business. But in hotels the nature of accounting is different..
If someone can help it would be Great.

Thank you a lot.

Answer 1

Unless you are going to work in the Accounts department in the hotel, the Sales ledger system in a hotel is handled by the Accounts department or the accountant or the finance officer, dependant on the size of the hotel.

The Typically hotel runs 3 types of Accounts proccess.

Purchase ledger (Purchasing Officer) deals with buying in for the hotel, ie spending money. Anything the hotel buys ussually goes through them.

Income Control deals with checking all the transactions in a business day to ensure that all charges are posted and recorded correctly, and that the money received on the books matches the physical 'cash in hand'.

Sales Ledger is with regards to companies, Agents, Businesses, charities, and some individuals who have credit faccilities in the hotel. This could be companies who book a minimum number of rooms per year for their staff, or agents who pay this as the client has already paid them.

Different hotels have different ways of running their accounts procedures, and if you are going to be involved in some way you will be advised of what to do.

Contrary to your statement, an average of 60% of hotel bills get billed back to someone via sales ledger. Additionally, Rooms revenue is not the only revenue centre in hotels; F & B, Communications, Entertainments, Conference, Sundries, I could be hear a while, so I'll stop.

Answer 2

Put simply, companies booking hotel rooms usually do so on credit, in addition some very valued customers (high spenders, frequent users) may have credit accounts with the hotel as an incentive. Only the general public will pay on departure!

Secondly, sales ledger is more than just credit control as I'd hope you are aware so it is far from a redundant position.

There are very, very few businesses which do not have some element of customer credit involved in one way or another and those that don't are very small and usually fail. Think about it, every company would love to have no customer's with credit. No credit means no debtors, no debtors means no need to chase and no loss on product/service sales which means more profit, more MONEY and that's what the world is all about.

Answer 3

Typically hotels either have a deposit equal to estimated room and tax charges or block funds in that amount on the customer's credit cards. When the customer leaves, especially if early, his bill will be less than the deposit or blocked amount. Thus the hotel has to refund the excess deposit or amount held.

Other charges for telephone, laundry, room service are also revenue items for the hotel business. Does that help?

Jordyc CPA

Answer 4

Your answer is really simple, just think of the
customer as someone you charge a set amount
upon their arrival, or when they call ahead to reserve a room to their charge card. Your computer will open and invoice for this customer and remain open until the customer has checked out of your hotel.At that time any extra charges have been added to their invoice and the difference between the first set amount that was already charged to their charge card and the amount of extras that they may or may not have charged to their room is now charged to their charge card as a second transaction.
Thus, closing out the entire transaction.

Answer 5

Creditors might be companies and organisations making mass bookings and not being settled on departure. Or it might be for hospitality/functions where credit terms might be offered.

There are lots of things hotels do other than sell hotel beds. Can't imagine they would need an entire army of them, though!

Answer 6

sorry