What is a folio in hotel?

A folio meaning is an invoice or a bill that includes charges such as room, charges from hotel restaurants, telephone, minibar, spa, recreation, laundry, and any other additional purchases made by the guest during their stay. When the guest checks out, the hotel presents this hotel billing to the guest in the printed form of records containing these financial charges for collecting the payment.

Folio charges

Types of charges can be, revenue, non-revenue, adjustments, discounts, paid-outs, refunds, and payments.

• Revenue: Charges that contribute to the hotel’s revenue. For example, room charges.
• Non-revenue: taxes, because these are government levies. With every sale, the hotel collects taxes that will be given back to the government. These are collected as percentages of the sale as regulated by the local government.
• Adjustments (Also called, Allowances): These are charges posted to adjust an already posted charge by reducing or increasing. For example, a cashier posted $1000 instead of $100. Posting $-900 in this case to adjust.
• Discounts: Posted to reduce an already posted charge when it is needed to give guests a discount.
• Paid-outs: These are charges that are neither revenue nor taxes, meaning these charges don’t contribute to the hotel’s revenue or government levy. For instance, a guest in-house arrives at the hotel and he/she wants some local currency to pay taxi charges. He obtains this money from the front office cashier who will post a paid-out to affect his cashier float and take it later or at the checkout from the guest.
• Refunds: These are payments paid by the guest and when the hotel wants to pay back (return) for whatever reason.
• Payments: These are payments made by the guest. This includes deposits, additional payments received by the guest during the stay, or settlement payments. This includes, but not limited to, cash, VISA, MASTER, DINNER, or any other credit card or similar payments.

The purpose of folios

Hotel folios help:

• Keep a record of guests’ charges and track them for both hotels as well as the guests.
• Generate invoices upon checkout.
• Reconciliation of accounts and ledgers as posting charges is the first journal entry into the hotel’s accounting system.

What is a folio number?

A hotel reservation confirmation number is always one and unique for a booking. However, a guest can have multiple folios under his/her booking. For example, a guest can have a folio addressed to him/her and another folio that is addressed to his/her company. So, each of these folios has its own billing window and a unique folio number for tracking, retrieving, or reconciling folios from the system.

It is also called invoice number or bill number.

The post Define Folio first appeared on e360 hospitality.

What Is Posting Master In Opera?

In Opera (or any PMS), you need a bill to post charges, print the bill and checkout. In the PMS, you cannot have such a bill without a guest room.

A Posting Master or PM room is a pseudo or fictitious room that helps open a hotel billing for posting charges and payments just like a real guest room.

Some Reasons, Hotels Use PM Rooms

Below are some of the reasons to use a PM room, but not limited to.

• Posting charges to a group master folio. For instance, if a group is coming from a company, there are charges that the company will pay for all guests. These charges are routed to a PM room that will be paid later by the company.
• Maintaining employee accounts.
•  Maintaining the hotel’s petty cash. For instance hotel front office or any other department spends on buying little things for office use, and they want to record and reclaim the charges.
• The hotel’s Business Center want to open a folio in the morning for posting the charges of walk-in guests and maintain a folio for them for the whole day and checkout in the evening.
• The hotel staff want to move a guest folio balance to a temporary room to free up the real room for a few days.
• Receiving charges that have already been settled at the restaurant for reconciliation purposes. For instance, an outside guest at the hotel’s restaurant pays the bill on the spot, and the charges are settled. A copy of these charges is sent to PMS for accountability purposes.
• Receiving missed postings from vendor systems that failed to reach real guest rooms for technical reasons.
• Handling discrepancy guest situations such as the hotel guest skipping without paying the folio. However, the hotel might take days to investigate and sort out the issue. During this time hotel wants to use the physical guestroom.

Creating a PM room in Opera (Rather, ‘Checking in’)

Step 1

When logged into Opera PMS, on the top menu, select Front Desk > House Accounts.

Step 2

Enter profile and reservation details.

The post How Do I Create A PM Room In Opera? first appeared on e360 hospitality.

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’.

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.

City Ledger vs 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.

The post What Is City Ledger In Hotel? first appeared on e360 hospitality.