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Credit and the City Ledger

Chapter 11

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The City Ledger

The city ledger references the accounts

receivable of all non-registered guests.

Other types of accounts receivable are in thecity ledger such as: travel agents,

wholesalers, client companies.

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Fees- Credit card companies charge

merchant/hotels discount fees, bank cards

charge at a lower range, 1% to 2% of thetransaction.

Swiping cards and point-of-sale terminals

lower processing fees.

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Debit cards electronically transfer funds

out of a persons checking account.

Merchants automatically receive the fundswith a debit purchase.

Debit cards are the first step toward the

cashless society that futurists predict.

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Smart Cards are miniature computers

almost indistinguishable from standardcards.

Smart Cards carry a quantity of

information: credit or debit cards, ATMcards, Identification, electronic door keys,

medical and insurance records, and more.

Cards can also be used to track customer

preferences and demographics.

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Master Accounts accumulate charges for

groups. Including overnight rooms,

incidentals and function charges.Billing discrepancies need to be resolved

as quickly as possible in order to receive

payment on time

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Travel agencies can become accounts

receivable in the city ledger if guests stays

are paid in advance.Banquet sales are also an account in the

city ledger, most events end with a balance

remaining in the ledger.

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Late Charges are departmental chargesthat appear after the guest has checked

out.

It is easy to charge these amounts if theguest uses express check out, the

additional charges are added on to the

final bill.

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Delinquent accounts are accounts that may

not be receivable, also called bad debts.

Executive accounts are accounts for hotel

executives that use the hotel for personal

reasons within the guide lines of companypolicy

Due bills are trade out balances with other

hotels restaurants or other businesses.

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Components of Credit Management

Extending Credit: Direct Billing

Application Procedures- no magic formula

for picking the safe risks from the poorones.

Minimizing Chargebacks: hotels fall to

collect in nearly half of all credit-cardchallenges.

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Monitoring Credit

Credit Card Companies establish a dollar

ceiling called a floor; a max the hotel can

charge to any one guest.Credit Alerts & Alerts: typical skipper is a

30-35 yr old male with light baggage and

vague info. Heavy tipper and friendly. Nophone calls and false address. Scribbles the

reg card.

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Collecting Receivables: Billing and

ChasingReceivables are amounts owed the hotel by guests

who have not yet paid for services received.

Hotels follow a three day billing cycle for cityledger accounts.

Following up on unpaid bills is the duty of one

person in the accounting department.

The worst of bad debts ends up with the collectionagencies.

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Mechanics of the Entry

Total debits to city ledger must equal total credits

from the guest ledger both daily and cumulatively.

The transfer is made and billing takes place fromthe city ledger.

Settlement is received and the debt is cleared and

the check (cash) is deposited.

These types of settlements generate cash, but somehave different formats

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Travel Agency Records:Vouchers are used

instead of cash.

Frequent Guest Programs:Points are usedinstead of cash. Split folios are used to

process the awards that are tendered.

Incidentals are not covered by points.

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Electronic Draft Capture

Covers credit card charges that are not

posted to a folio (ie- payment for breakfast

with cc in the restaurant).These charges become part of the

departmental cashiers daily turn-in of cash

and credit-card sales.