What Is City Ledger In Hotel?

City Ledger is a list of company/travel agent accounts that owe hotels money since their employees or representatives stayed at the hotel on a credit basis.

What Is the Primary Function of the City Ledger?

City ledger is a traditional term used only in the hotel industry for Accounts Receivables, and we know that Accounts Receivable or AR is credit sales.

In the early days, hotels only provided credit facilities to companies within the city limits wherever the hotels were located. They maintained the receivable records in the ledger, which they called the ‘city ledger’.

What is the Purpose of Maintaining a City Ledger in the Hotel Industry?

The hotels use the city ledger to record credit sales, track the aging of pending payments, and send reminders and statements to the companies that owe the hotels for collection purposes.

City Ledger Example: How Does City Ledger (Direct Billing) Work With Hotels?

1. A company (travel agent or governmental organization) requests for direct billing (City ledger) privilege from the hotel.
2. The hotel’s sales department works with the company to obtain relevant documents and checks the eligibility in line with the hotel’s credit policy. Note: Depending on the checks and eligibility of a company, the hotel determines the credit limit.
3. Once approved after fulfilling the standard procedures, the hotel is ready to accept the guests sent by the company for direct billing. 
4. Individual guests, despite being booked by credit-approved companies, should be authorized by the hotel front office manager or supervisor before his/her charges can be settled to the company’s city ledger account (also called, AR accounts).
5. City ledger authorized guests when checking out, the hotel cashier will settle the charges to the city ledger payment method instead of cash or credit card. These charges will automatically be transferred to guests’ company accounts in the city ledger.

Are All Charges Settled to the Company City Ledger?

It depends on the contract between the hotel and the company, and what has been authorized on an individual guest basis.

Usually, companies cover room, food and beverage, and laundry charges, while any incidental and miscellaneous charges are the responsibility of the guests.

In the above situation, the hotel will split the guest’s bill and settle the company’s part to the city ledger, while the guest will pay for other charges.

What is the Difference between A Guest Ledger and A City Ledger?

What is the guest ledger? Every time a guest consumes a hotel service or product, the charges are posted to the guest’s bill while the guest is still in-house and the bill is still not settled. These charges are recorded under the guest ledger (also called, the front office ledger).

When the guest checks out, the charges are transferred to the respective city ledger account of the guest’s company. From here on, the charges will reside in the city ledger (or accounts receivable ledger) until the company settles the due amount. This is the reason the city ledger is called the ledger of non-guest transactions.

Aging of City Ledger

Since transferring a guest’s balance to the city ledger, the aging process of the credit starts and is counted based on the number of days. It is the responsibility of a hotel’s Account Receivable team to collect the payment from the companies.

They send reminder letters such as 1st reminder for 30 days, 2nd reminder for 60 days, and so on. After a certain number of days and not settled (depending on hotel policy), the credit policy will be suspended.

City Ledger in Front Office

A hotel’s FO staff are not authorized to provision City Ledger facility to any guests. Providing credit facilities to a corporate client or a company has a long process and it differs from one hotel to another. Usually, it is handled by the hotel’s Sales team in conjunction with higher management.

Once the facility has been established with a company, hotel Front Office staff only checks out a guest on the ‘direct bill’ payment type just like cash or credit card checkouts.

City Ledger Payment Method

Typically, a city ledger payment method is called the Direct Bill. You cannot classify this payment method as cash, credit card, or debit card. Whenever a guest checks out using this payment method, all it does internally is transfer the bill from the Front Office Ledger to the City Ledger.

The rest is handled by the Accounts Receivable team at the finance department.

City Ledger Opera

Sample screen (obtained from https://docs.oracle.com/cd/E98457_01/opera_5_6_core_help/account_maintenance.htm):

• Oracle’s Opera PMS system has a comprehensive AR module with detailed reporting.
• Learn more about leading hotel PMS software
• For assistance (free of charge) or Opera PMS training, you can contact us.

Frequently Asked Questions (FAQ)

What is a hotel ledger?

A hotel ledger is a record of financial transactions organized into debit (charges) and credit (payments) columns. It tracks all monetary activities between the hotel and guests or vendors, serving as the foundation for accounting in property management systems (PMS).

What is a city ledger in hotel accounting?

The city ledger is a specialized accounting ledger that tracks outstanding balances owed to the hotel by third parties (e.g., corporate clients, travel agents). It’s a critical component of hotel accounts receivable (AR), ensuring timely collection of credit-based payments.

What is a city account in front office?

“City account” is an older term for the city ledger, still used interchangeably in some hotels. It refers to non-guest billing where charges are deferred to approved creditors, such as companies or event organizers.

What is the city ledger in Opera PMS?

In Opera PMS, the City Ledger is the accounts receivable (AR) module that manages creditor accounts. It automates aging reports, payment tracking, and invoice generation for hotels using this property management system.

What are the 3 main ledgers?

Hotels rely on three core ledgers:

1. Deposit Ledger: Records guest prepayments or security deposits.
2. Guest Ledger (Front Office Ledger): Tracks real-time charges/payments during stays.
3. City Ledger: Manages post-checkout credit settlements with approved vendors or companies.

Who in the hotel handles the city ledger?

The finance department’s accounts receivable (AR) team manages the city ledger. They oversee invoicing, aging reports, and collections from corporate clients, travel agencies, and other creditors.

How long can a hotel wait before companies settle credit bills?

Hotels set aging periods (typically 30, 60, or 90 days) based on the client’s creditworthiness and contractual terms. Luxury hotels may extend credit to VIP partners, while budget properties often enforce stricter 30-day limits.