What is a hotel folio? A hotel folio can be defined as a printed invoice that represents your hotel bill containing itemized charges, discounts, and payments posted by the hotel.
Examples: Room and Tax, Continental Breakfast, Laundry, 10% FB Discount, 5% FB VAT, and Cash Deposit.
How Do You Get A Hotel Folio?
Your hotel bill contains charges for accommodation, food and beverage, minibar, laundry, spa treatments, and any hotel services you consume and payments you make. When the hotel prints a copy of your hotel billing, it is your guest folio.
Your hotel bill is opened when you check into the hotel and kept open throughout your stay for posting charges, discounts, and payments until you settle the charges and check out.
- The hotel Front Desk agent must provide you with an ‘information folio’ whenever you request during the stay.
- With modern property management systems, you can view the folio on your smartphone and room TV during your stay.
- The hotel Front Desk agent must hand over your checkout folio (settlement bill) at the checkout.
- The hotel can provide or email you a copy of your final folio after checkout with your identity verified.
Note: Depending on the capability of the property management system being used, a bill for guests can be opened when the reservation is created and not necessarily when the guest is checked in. Deposit, cancellation, no-show, or an upselling charge can be posted to a hotel folio.
For Guests: Review Your Hotel Folio Carefully Before You Settle It
Before we dive deeper into understanding folios, we accept that charges in the folio are not always accurate due to human or system error. Hence, it is important to carefully review the hotel folio to ensure you are being billed legitimately. For instance, say you ordered room service for a single taco two days back that you might have forgotten; there is a chance you could have been billed for double. Or, the entire restaurant check might have been posted twice due to a system error.
By carefully reviewing the hotel’s folio and checking with hotel staff for clarification, you can avoid any unnecessary charges. In case of a bigger dispute, you can escalate it to even hotel management.
Let’s dive into the details.
What Is A Folio In A Hotel, And What Makes A Perfect Folio?
- Clarity is King: The folio should be easy for the guests and hotel employees to understand, with clear descriptions of each charge and the corresponding dates. Avoid using jargon or abbreviations that might leave both the guests and new employees confused.
- Transparency is Key: All charges, including taxes and service fees, should be displayed with clear descriptions. Don’t hide anything in the fine print.
- Customization Matters: Consider offering guests the option to access their folio electronically, allowing them to review and query charges at their convenience, even before the checkout. For instance, with IP TV integrations with hotel PMS, guest can view their current charges on TV screens on demand.
- Efficiency is Essential: Ensure a smooth checkout process by enabling multiple payment options to settle guests’ bills and minimizing wait times.
Defining Types of Hotel Folio
Even though the folios serve a common purpose and format, traditionally hotels identify them as one of the below types to simplify day-to-day operational understanding. Remember, a folio is a representation of a bill. And, in hotels, a bill has to be associated with a guest room. Where there are needs to post charges to a bill, which doesn’t have a real room involved, it is done through a house account (staff folios below):
Understanding Hotel Folios (Guest Folio in The Front Office)
Guest folios represent the billing items that are directly charged to a guest, such as charges and payments (made by the guests). For example, if you are an individual traveller and not booked by a company for a business trip. Or, if your visit is for business purposes and the company pays for the room and food & beverage while you pay for the other charges.
In the first example, you solely pay for all the charges – there is only one bill. In the second example, there are two bills/folios: 1. paid by you for miscellaneous charges and 2. Room and Food and beverage charges paid by your company.
Understanding Hotel Company Folios
Company folios are the ones that are going to be sent to companies as invoices. As in the above example, if you visit for a business purpose and your company pays for the room and food & beverage charges, the hotel sends the folio for the bill that contains room and food & beverage charges to collect payment.
Understanding Hotel Master Folios / Group Folios
Master folios or group folios contain charges posted to the main bill where all group member charges are posted to. For example, if you visit the hotel as part of a tour group, you don’t pay anything at the hotel since you have already bought your tour package from a travel agent or a tour operator.
Therefore, the hotel collects the charges of each group member into a single bill to be charged to the tour operator.
Understanding Hotel Staff Folios (Sometimes Referred to as ‘Hotel Folio’)
Staff folios, hotel folios, or non-guest folios are bills that hotels maintain for posting charges but there is no real guest room involved. Examples can be staff purchases that will be deducted from wages later or post charges of a walking guest who uses the facility for a few hours, like a business centre. Or, a hotel guest who skipped the hotel without settling the payment, and the hotel wants to keep the bill open till a settlement is done. In these cases, the hotel will move the bill to a staff folio till the issue is resolved.
A hotel folio is essentially a fictitious room bill (also called house accounts), or in Opera PMS, called PM rooms.
Some PMS Systems Can Have Additional Types of Folios
Depending on what property management system the hotel uses, there can be below folio types:
- Proforma Folio: A folio contains the expected/estimated room charges, room rates, taxes, and any other fixed charges.
- Deposit Folio: This is also a pre-stay folio. As said before, when the guests pay a deposit to confirm their booking, The hotels must send guests with deposit folios rather than mere payment receipts in some countries.
- Group Folio: For instance, travel agents have arrangements with hotels and they block a large number of rooms for a certain period (mostly during low seasons) at usually a lower rate. They fill the allocated rooms with their guests who have already paid the travel agent for hotel rooms, so they don’t settle or pay their bills at the hotel, but the agents do. What hotels do is, post the room charges of each of these guests to a common bill, and when this bill is printed, it is a group folio.
- Informational Folio: It is a folio, usually printed on a guest’s request but not finalized. Each final folio has a unique Hotel Folio Number/Invoice Number; however, an informational folio doesn’t have a hotel’s Folio Number/Invoice Number.
- Interim Folio: When the folio is not closed, but the guest pays for the outstanding balances and continues to stay, an interim folio is printed with a folio number.
- Final Folio / Checkout Folio: These are settlement folios printed when the guest checks out by settlement charges. This is when the debit and credit must be equal (See below for folio Debit and Credits).
- AR Folio (Accounts Receivable): Companies sign agreements with hotels to send their employees on a credit basis, and settlement is usually after 30 days. When these company staff check out, hotels send these folios as invoices to companies and follow up for payment.
Purpose of A Hotel Folio
Importance of A Guest Folio In Hotel
What is the purpose of a folio? Folios are more legal docs than mere stationery. For the guests, a hotel folio, meaning they serve as itemized descriptions of their charges and payments and proof of settlement documents. For instance, a guest might want to see his bill during the stay, hotels print an informational folio (not finalized) whether a detailed or summarized list of items for him/her.
Billing Records In A Hotel Folio
When we say a folio represents a guest’s bill, it is the summarized view of detailed billing records where the charges/payments are posted. It not only simplifies guests’ reading of their bill but also helps other instances such as below:
Certain countries enforce their legal requirements through the folio. For instance, a government authority to trace and validate the hotels pay the taxes fairly. So, each guest’s billing record is electronically sent to the authorities for this purpose, and it is achieved through sending the folios.
Account Summary
For companies, folios are part of their accounting system, and they call it invoices. For example, a company guest’s bill is either fully or partly settled by the company. For payment collection, the hotels send invoices to the companies. These invoices represent a copy of the final folios. And, the same is applicable for OTA (online travel agents), government guests, and the guests who the travel groups book.
For hotels, it helps maintain account summaries and the ageing of each company.
Guest Transaction History
In any PMS system, a guest’s transaction is recorded in the database, including any cancellation fees. It is kept for reprinting an informational folio at a later stage if there is a need, such as a legal case or audit purpose. However, not all systems are capable or are set up to keep historical records indefinitely.
In such a case, a printed copy stored physically or a PDF format sent through email can help trace transactions. Modern PMS systems are capable of storing PDF copies of final folios attached to guest profiles.
Further Understanding Your Hotel Folio
Understanding hotel folios: a folio is a statement of charges and payments posted to a guest’s bill by the hotel. Throughout the hotel industry, the hotel staff often interchangeably use the terms invoice and bill.
Like in any statement, there is a debit side that includes charges, such as room charges, food and beverage, additional charges, and taxes and fees, which the guests have to pay the hotel (left side). And there is a credit side where any payment from the guest sits (right side).
To be more precise, the term ‘Invoice’ is used for copies of final folios (check-out folios) that the hotel’s finance department sends to guests’ companies and travel agents for payment collection where they have established credit facilities with the hotel.
This is called City Ledger or Direct Billing.
Components of A Hotel Folio
Have a look at the below sample folio before we dive a bit deeper.
A Simple Hotel Folio Example
Looking at the above folio, it’s not a fancy one – we just recreated it. However, the folio provides every detail that defines a ‘complete folio’. Let’s note the following points:
| Data | Description |
|---|---|
| Hotel information including address. | Guest info, to whom the folio is addressed. A guest can have multiple folios for a single stay. For instance, a folio covers the charges of incidental charges that the guest pays personally. While another folio is addressed to the guest’s company where his/her company will pay the room charges. A PMS (property management system), it uses separate billing windows to contain these specific charges. For instance, Opera PMS has 8 different billing windows. |
| Guest info: (rather addressee – to whom the folio is addressed to). | Importantly, confirmation number, folio number, dates, if the guest is part of a group, and the cashier who checked out. Notice the ‘Folio No’, which goes along with the billing window discussed before. |
| Member No.: of the hotel’s loyalty program. | This helps as an additional tracking code for hotel staff for verification as well as to justify discounted charges. |
| Stay Info: Reservation stay information. | Folios play a crucial role not only in reflecting a guest’s bill but also as a supporting doc to hotel staff for clarification on revenue and expenses-related queries at a later stage or any other auditing/investigation purpose. Cashier ID will help here. Folio No., is a unique serial number assigned to each billing window. Check the the below sections for Folio type. |
| Cashier No. / Folio No. / Folio type: discussed in detail below. | Detailed record of each posting. Detailed in the sense, date, description, and amount provides guests with enough information. |
| Itemized charges | The summary at the bottom helps with reading and understanding at a glance. |
| Itemized charges summary | Summary at the bottom helps with reading and understanding at a glance. |
| Guest signature | This could be part of a regional legal/hotel requirement. In addition, this also avoids printing a separate payment receipt once the guest and cashier sign on it to acknowledge each other. |
Itemized Charges
A folio should have the header with hotel, guest, and booking information, followed by the ‘detail’ section where the itemized postings are listed, which includes charges and payments. In this section, let’s check some of the items that get into this:
Room Rate
Room charges are the primary sales of any hotel, followed by food and beverage. Nightly room charges are posted on folios at the time of the night audit process. However, in the case of a Day-Use guest (the guest checks in and checks out on the same day) or departing earlier than originally booked, room charges are posted instantly by the system or manually.
Room rates are not always the room revenue, for instance, for an inclusive Bed and breakfast guest, it can combine room revenue and food & beverage revenue as well like for a room rate of 100$, it can be 70$ room revenue + 30$ breakfast. However, the guest on the folio sees a single line of ‘Room Rate 100$’.
Taxes
Depending on the country’s regulations, whenever a revenue is posted, a tax is automatically added by the PMS system. Again, depending on the regulations, taxes can be included with the main revenue charge; for example, you see a single line, ‘Room Rate 100$’ in case of inclusive taxes. Or, it can be ‘Room Rate 100$’ in 1 line and ‘Room Tax 12$’ for 12% exclusive taxes.
Food & Beverage
Similarly, food and beverage charges.
Incidental Charges
Revenue that is not room revenue or food & beverage charges is considered incidental. Usually, Laundry, Telephone, Miscellaneous, Minibar, etc.
Credits And Adjustments
Credits in a bill/folio are usually, payments such as cash, credit cards, etc. They usually sit on the right side of the debit/credit bill/folio. Adjustments are corrections and discounts given to a posted revenue charge. These are usually sitting on the left side of the debit/credit bill, preceded by ‘-‘ (minus) in front of the figure.
What Is ‘Folio Balance’?
When the guest checks out, the hotel subtracts the guest’s charges from any payment he made earlier, such as a deposit. to settle any outstanding balance. When the guest’s consumption (debit) is more than what the guest paid before the checkout, he/she pays to settle the outstanding balance. When the guest’s payment is more, the hotel refunds the guest to the balance.
Hotel Bill Format
A hotel bill format can be flexible. However, it should be informative enough not to leave room for guests’ confusion and adhere to regional legal requirements.
The above hotel bill format meets the basic requirements. Later in the post, we cover the details of all the fields.
Download Hotel Bill Formats:
Open Folio
The concept of Open Folio comes from Opera PMS, even before Oracle acquired the company Micros in 2014. The feature is very simple but useful when a hotel wants to vacate the guest room while the folio is not settled – debit/credit does not equal zero, as we said before.
This can happen due to several reasons, such as the guest’s credit card not working, a technical fault, or the guest checking out while still wanting to spend some time at a restaurant and expecting charges back to his bill. In these situations, hotels can move/disassociate a guest’s bill along with all the postings from his room to a fictitious room so that the original room can be sold to another guest.
This is an Open folio situation since the hotels can still post on the bill, change the departure date, and settle the charges whenever they are ready to.
Difference Between Folio And Receipt
The hotel folio serves as a statement of charges and payments with description, date, and sometimes time to clarify guests’ expenses and ensure transparency between guests and the hotel on how the guest balance reached there.
A receipt is a proof of payment, like in any business, printed for guests to acknowledge that the hotel has received a payment from them at any time a guest makes a payment. At the time of checkout, some hotels provide an additional receipt, and some don’t unless the guest asks for it.
Types of Folio In Hotel Billing
How many types of folio in the hotel is irrelevant once you understand how hotel billing works. Every time a hotel sells its products or services or receives an advance payment from a guest, a relevant entry has to go into the particular guest’s hotel billing to maintain financial records.
These transactions are posted manually by a hotel cashier or auto-posted by the PMS software, such as room postings during the hotel night audit process. Charges are also posted by other systems, such as point-of-sales, telephone, etc., that have been integrated with the hotel’s PMS.
A folio is crucial for another reason: it is the first entry point for a transaction. These transactions sit in the guest’s hotel billing that front office staff can print as folios during the guest stay as informational or at the checkout as final folios. It can also be reprinted after the guest is checked out.
Behind the scenes, every entry done on the hotel billing goes way beyond printing folios to submit to the guest. A hotel’s operation is a complicated business that depends on various ledgers and financial reports for accountability, reporting, and revenue management.
If you’re interested in learning the different types of folio styles available in Opera PMS, you may check it.
Remember, there is no standard format for folios when it comes to aesthetics as long as a folio provides the crucial information printed on it. Even though some hotel chains do have a set standard, regional legal requirements take precedence.
Hotel Folio: Frequently Asked Questions:
| What is a folio? | We explained above that a folio is a print statement of a bill containing charges and payments. And, it is printed for a payee that can be a guest, a guest’s company, a travel agent, a hotel employee, a hotel account that is used to post charges for accountability, or any entity that the hotel wants to record charges and payments. |
| Why do charges and payments need to be in a folio? | The billing is the entry point of any charge and payment in a hotel system. These charges are itemized postings such as Lunch Food, Lunch Beverage, etc. When this bill is printed, it is a folio. When an individual guest checks out, a printed folio is presented, and for payment recollection from a travel agent, a copy of a folio is sent, and so on. |
| What is a guest folio? | Guest folio is a front office folio where the payee is the guest. |
| Is folio an invoice? | In accounting terms, yes. In hotel operational terms, they are different. When a guest checks out, the hotel front office agent hands over the bill, which is a folio. However, if a company guest checks out, whose bill is later paid by his/her company (city ledger or direct bill), the hotel’s finance department would send a copy of the folio to the company for collecting the payment, which is an invoice. |
| What is the difference between folio and ledger? | Folios show the charges and payments of a single guest, a company, or any entity individually. A ledger is a collection of charges and payments of the hotel. |
| Why is folio important in hotels? | Hotels are a business that runs on revenue collected through selling services and products to hotel guests. The first entry point of these revenues is guest billing, which is merely a computer screen, no matter the size and the class of the hotel. A folio is a legal document (invoice) that represents the posted transactions on a guest’s billing as they are. |
12 Comments
Helped me. Question, how does a group folio work?
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