CHAPTER 9

CHECK-OUT AND ACCOUNT SETTLEMENT

BY
DANISH MUNIR
THE CHECK-OUT/SETTLEMENT
PROCESS
 Resolve outstanding guest account balances
Verifies/authorizes method of payment
Resolves discrepancies in account payment
 Updates room status information
From occupied to on-change
 Creates guest history records
Database for strategic marketing
 DEPARTURE PROCEDURES
 Inquire about additional, recent charges
 Post outstanding charges
 Verify account information
 Present the guest folio
 Verify method of payment
 Process account payment
DEPARTURE PROCEDURES
 Check for mail, messages, faxes
 Secure the guestroom key/keycard
 Update the room’s status
 Inquire about the guest’s experience at the hotel
 Ask the guest to complete a guest satisfaction
survey
 Update the guest history file
METHODS OF SETTLEMENT
 Cash or debit card
 Credit card
 Direct billing
 Combined settlement methods
 SETTLEMENT: CASH OR DEBIT CARD
 A cash payment in full at check-out is the most direct way to bring a
guest account balance to zero
 If the guest had a credit card accepted and verified at registration,
but pays the bill with cash, the funds being held for the hotel by the
card company should be released
 Debit card payments are similar to cash payments, in that funds are
drawn directly from the guest’s personal checking or saving account
 If a guest wants to pay using a debit card, there must be sufficient
funds in his or her account at the time of settlement
SETTLEMENT: CASH OR DEBIT CARD
 Guests desiring to settle their account in foreign currency
should first convert their money to the local currency
(hotels may charge a fee for this conversion)
 Cash payments are the most likely to be involved in fraud
by front desk agents; therefore, hotels should have
procedures in place for recording cash transactions
 Front desk agents should be trained to identify counterfeit
currency
 SETTLEMENT: CREDIT CARD
 Credit card settlement brings a guest account to zero, but the amount of
the charge must be tracked until payment is actually received from the
credit card company
 Credit card settlement creates a transfer credit on the guest’s folio and
moves the account balance from the guest ledger to a credit card account
in the city or non-guest ledger
 After the front desk agent processes the transaction, the guest may be
asked to sign a copy of the folio, agreeing to the credit card balance
 When an international guest presents a credit card for the payment, the
credit card company will apply payment in local currency (any currency
exchange fees are charged to the cardholder)
SETTLEMENT: DIRECT BILLING
 Direct billing transfers a guest’s account balance from the guest
ledger to the city ledger
 The hotel is responsible for billing and collecting a direct billing
account
 Direct billing must be prearranged and approved by the hotel’s back
office credit department
 To complete a direct billing settlement, the front agent has the guest
sign the folio to verify its contents and signify that the guest will
pay the bill if the direct billing agent (if applicable) refuses payment
 A copy of the final guest folio is sent to the direct billing agency
 COMBINED SETTLEMENT METHODS
 A guest may choose more than one settlement method to
bring the guest folio balance to zero
 For example, a guest may make a partial cash payment
and then charge the remainder of the account to a payment
card
 Front desk agents must accurately record the combined
settlement methods and exercise care that required
paperwork is properly completed
 LATE CHECK-OUT
 To minimize late check-outs, front office staff should post check-out
notices in conspicuous places, such as the back of guestroom doors
and in prominent locations at the front desk
 A reminder about the check-out time can be included with any pre-
departure materials distributed to guest expected to check-out that
day
 Check-out time should be tactfully enforced, in order to provide
housekeeping staff sufficient time to prepare the guestroom for
arriving guests
 Some hotels charge late check-out fees
CHECK-OUT OPTIONS

 In addition to the standard check-out process, some

hotels provide other check-out options to guests
 These options include express check-out and self
check-out
 EXPRESS CHECK-OUT
 Some hotels produce and distribute guest folios to those guests
expected to check out (by slipping printed folios under guestroom
doors, for example)
 Express check-out forms can be distributed to those guests expected
to check out
 By completing such a form, the guest authorizes the front office to
transfer his or her outstanding folio balance to the payment card that
the guest presented during registration. (if the guest did not establish
credit at registration, express check-out may not be offered)
 After completing the express check-out form, the guest deposits the
form at the designated front desk container and can depart without
having to wait in line to check out
 EXPRESS CHECK-OUT
 After the guest has left the hotel (it may be hours
afterward), the front desk staff completes the guest’s
check-out by transferring the outstanding guest folio
balance to a previously authorized method of settlement
 A copy of the guest folio showing charges and payment
should be mailed or e-mailed to the guest
 Express check-out must not be offered to guests who paid
in advance using cash
 SELF CHECK-OUT
 In some hotels, guests can check out by using self check-
out terminals in the hotel’s lobby/meeting areas or by
using a mobile or in-room device
 Self check-out devices interact with the front office system
to reduce check-out time and minimize front desk traffic
 To use a self check-out terminal, the guest accesses the
proper folio, reviews its contents, then settles the account
with a payment card
 SELF CHECK-OUT
 After payment, the guest receives an itemized account
statement
 A self check-out system should automatically
communicate the guestroom’s status information to the
front desk system which, in turn, notifies the
housekeeping department
 In-room folio review and check-out often relies on an in-
room television set with a remote control advice; guest can
pick up a copy of their printed folios at the front desk after
completing their self check-out, or request that one be e-
mailed to them
 UNPAID ACCOUNT BALANCE
 Unpaid account balances are after-departure charges (late charges)
or outstanding guest account balances
 A late charge is a charge that does not reach the front desk or front
desk system for posting until after the guest has checked out and
closed his or her account
 It is often difficult to collect late charges, and the hotel incurs
additional costs in attempting to do so
 A front office automated system that interfaces with the hotel’s
revenue center outlets is often the most effective means of reducing
or eliminating late charges
 UNPAID ACCOUNT BALANCE
 To reduce late charges in hotels without a system
interfaced with point-of-sale terminals, front desk staff can
post transactional vouchers as soon as they are received,
survey front office vouchers and folio racks for unposted
charges before checking guest out, and ask departing
guests whether they have incurred any charges not listed
on their final folios
 Payment card companies may allow hotel personnel to
write ‘’signature on file’’ on the signature line of a
payment card voucher in order to collect payment for late
charges
 ACCOUNT COLLECTION
 Late charges billed to departed guests should not be classified as uncollectible
until all billing and collection procedures have been exhausted
 Guests who paid with a payment card will be billed according to the policies and
procedures of the payment card company; guests who paid with cash may have
their accounts transferred to the hotel’s accounting division for collection
 The sooner the collection process is started, the more likely the hotel will receive
payment on unpaid, overdue accounts
 Each hotel must develop its own collection schedule (number of days between
account billings), ranging from aggressive (short-cycle) to lenient (long-cycle)
 In all collection cases, it is important for staff to be polite but firm; care must be
taken to not violate a consumer’s rights
 TYPICAL CITY LEDGER ACCOUNTS
 Payment card billings
 Direct billings
 Travel agency accounts
 Skipper accounts
 Disputed bills
 Guaranteed reservation accounts
 Late charges accounts
 House accounts
 MASTER FOLIO ACCOUNTS FOR
 GROUPS
Credit arrangements for group should be established well before
their arrival
 Front office staff may prepare a preliminary master folio account
statement prior to the group’s departure and review it with the group
leader to expedite the final payment process
 Master folio accounts can be complex; for this reason, billing
arrangements are usually clearly specified in the group function
contract and reviewed/confirmed with the group leader before the
group the group’s arrival
 MASTER FOLIO ACCOUNTS FOR
 GROUPS
It is customary for the front office manager to meet daily
with the group leader to review group transactions and get
his or her approval
 When the final master account statement is presented to
the accounting department, all previously authorized
invoices, vouchers, and related documentation should be
attached to verify that the group leader has approved the
charges
 ACCOUNT AGING
 Payment card billings are normally paid according to the
hotel’s contractual agreements with the payment card
companies
 Most city ledger accounts are usually settled within thirty
days of billing
 The practice of scheduled billings of past-due accounts is
referred to as ‘’account aging’’
 At some hotels, their accounting division monitors
account aging; at others, the front office auditor is
responsible
ACCOUNT AGING
 Accounts less than 30 days old are current; accounts older
than 60 days are overdue; accounts older than 90 days are
delinquent
 Front office and accounting department staff should
maintain a list of outstanding accounts
 Guests with overdue accounts may be denied credit
privileges until the account is paid or reclassified as
current
GUEST HISTORY FILES
 Help manager understand guests
 Help manager determine guest trends
 Their creation is one of the steps in the check-out and
account settlement process
 Help hotels provide better guest service
 Are used by the marketing and sales division to create
mailing lists
 Help managers determine the geographic distribution of
guest addresses, which helps in advertising efforts
MARKETING FOLLOW-THROUGH AT
CHECK-OUT
 Tracking guest stays for frequent-guest/traveler programs
 Verifying guest’s club membership status
 Providing guest comment cards
 Making reservation for departing guests (for the next stop)
 DATA PRIVACY
 Front office personnel are guardians of proprietary guest
information
 Historically, data privacy has been codified in both
statutory and case law
 Hotels must meet the expectations of guests and
employees regarding data privacy
 Sound privacy practices help prevent undesirable
publicity, litigation, and fraud
 DATA PRIVACY
 The payment card industry (PCI) has developed a set of
comprehensive data security standards (DSS) that must be
adhered to by all businesses accepting payment cards
 To be certified as PCI compliant, hotel operators must pass
a security review and be periodically recertified
 PCI compliance is the responsibility of hotel management,
not the hotel’s software providers