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

Not entirely clear, but you may be speaking of the process whereby a guest presents a credit card at check in.
An approval on that card is obtained for some amount above the the actual room charges. This is done in order to give immediate approval for any charges applied to the room.
IE, Bars, restaurants, phone calls, Internet, etc.

The approval may be obtained for as much as 20 percent , or so, above the anticipated charges.

This total amount including the additional approval, may be entered on the books in the Accounts Receivable ledger.
It won't be entered as a "sale" until the stay is completed and actually finalized, and the hotel can actually debit the card for the correct amount. Only at that time will it be credited to the hotel bank account.
When a guest checks out, if the charges are less than the entry, a credit must be entered for the "overcharge". If the charges exceed the origianl approval, then a "sale" is increased by that amount.

Bear in mind that the approval amount actually "ties up that amount" on a credit card or as a debit on a bank account. The hotel has nothing to do with correcting any overage held on the card or bank account.

The bank corrects this at the time the actual charge is presented to the bank, or the card service is debited. This is done electronically and may be done every day, or once a week.

Other than this process, I can't determine any other part of your question.

One thing that may help you understand the above.

If a guest checks in on or near the last day of the month and remains into the next month, can you see that it cannot be entered in the current month sales? It will be entered in the next months sales at checkout.

It can only be entered as an account receivable for the current month.

This has to handled in a bit of a strange way. It is not considered a completed sale, as an account receivable, in the normal sense of A/R.
If a guest had checked out and not paid in full, then the service has been performed, just like any service, completed and not paid in full. This is entered on the books as a "sale" for that month, and the balance is a true Accounts Receivalble.

The method of handeling the other explanation is up to the company., so I won't go into that method.