Chapter 3 Accounts Receivable May 2010

Updated: May 2010 HOTEL ACCOUNTING & OPERATION MANUAL Index Nº: FIN-03
POLICIES & PROCEDURES
CREDIT / ACCOUNTS RECEIVABLE
Subject: Credit / Accounts Receivable - Index Page: 1 of 1
Index nº Contents Pages
FIN-03-01 Accounts Receivable functions 2-4

FIN-03-02 Credit policy 5 - 15
FIN-03-03 Guarantee of payment 16 - 18
FIN-03-04 Transfer to City Ledger procedure 19 - 20
FIN-03-05 Invoicing procedure 21 - 22
FIN-03-06 Accounts Receivable follow-up 23 - 34
FIN-03-07 Travel agent commission payment 35 - 36
FIN-03-08 A/R rebate procedure 37 - 38
FIN-03-09 Control of receipts in a foreign currency 39 - 40
FIN-03-10 Doubtful debt policy 41 - 43
FIN-03-11 Advance deposit policy 44
FIN-03-12 Credit card payment process 45 - 47
FIN-03-13 Sundry Debtors 48
Organisational structures
Not all hotels within the Asia Pacific region will have an organisational structure that allows for
every position mentioned in the policies and procedures to be employed. Whether all positions
exist or not, the underlying procedures and controls must be in place and the responsibilities must
be allocated to other staff members within the hotel or associated accounting hub.
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Updated: May 2010 HOTEL ACCOUNTING & OPERATION MANUAL Index Nº:
FIN-03-01
Subject: Accounts Receivable functions Page: 1 of 3
The main functions performed by the Accounts Receivable department are as follows:
- To ensure the strict application of the credit policy in regards to opening and maintenance
of accounts together with advance deposit management
- To manage the invoicing process and perform account adjustments where necessary
- To monitor credit card payments
- To follow up on debtors’ payments and manage delinquent accounts.
I Credit control
Guest ledger and city ledger accounts are used to record customer transactions in the front office
and back office accounting system. It is the responsibility of the Credit Manager to ensure strict
adherence to the credit policy defined by the hotel management in regards to:
- In-house guest ledger: the systematic request of guarantee of payment and appropriate
levels of guarantee taken.
- City ledger: credit applications are maintained and updated for all accounts.
Credit facilities are only to be extended to legal entities and not to individuals. The level of credit
granted must depend on the volume of business expected or generated by the entity. A formal
approval by the Financial Controller and the General Manager must be obtained first before credit
facilities are granted. In the case of an accounting hub, the Senior Financial Controller is
responsible for the approval of credit applications.
The Credit Manager must ensure that guarantee deposits requested as per contract (sales events,
banquets etc) are paid on the due date and that the person initiating the contract on the hotel side
is informed of and follows up with the client with regard to any breaches of the contract.
II Accounts Receivable management
The hotel city ledger provides an ageing balance for each debtor account, aged in the following
periods “current”, “30-days”, “60-days”, “90-days”, and “over 120-days”, and are categorized into
the following main types:
- Travel agents – Local / Foreign
- Airlines
- Corporate – Local / Foreign
- Affiliated (related to owner and group sister companies/hotels)
- Government (all public administration and affiliated)
- Reward schemes
- Credit cards (sub-categorized per credit card companies)
In addition, the credit limit as set by the hotel management should be included in the ageing
balance report for each debtor account, as a reference.
It is essential that there is no “hold-all” account maintained in the city ledger.
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If a guest has checked out without payment, the Front Office Manager must resolve the situation
within 48 hours. The debtor is not to be transferred to the City Ledger unless the appropriate credit
applications have been completed and authorized, or unless the General Manager has given
specific written authorization that the transfer can take place. The Front Office Manager should
liaise with the Credit Manager if assistance is needed to recover the debt.
It is the responsibility of the Credit Manager to ensure that the Accounts Receivable staff strictly
comply and follow the procedures set by the hotel management in matter of invoicing, filing and
follow-up of debtors’ accounts.
III Payment control
The methods of payment for departing guests are by cash, credit card or city ledger. For payment
by credit card and city ledger, the guest ledger balance will be transferred to the city ledger and
Accounts Receivable will proceed to invoice and will follow-up the payment.
a. Credit card payment

It is the responsibility of Accounts Receivable to ensure daily that all credit card slips are
matched with a system-generated Cashier report and the credit card terminals’ settlement
reports; to follow up the payment and commission charges.
A credit card reconciliation must be performed on a daily basis (any variances followed up) and
submitted to management for supervision on a monthly basis.
b. City ledger payment

Accounts Receivable must collect and check all supporting documents received from Front
Office, issue and send a proper invoice to the debtor concerned; generally within 2 days of
checkout.
Where adjustments need to be done after transfer from the guest ledger to the city ledger,
approval from the Credit Manager and related Department Head must be received prior to any
posting into the system.
IV Maintaining Debtor information
The Accounts Receivable department is responsible for maintaining and filing all relevant
documents in order to minimize the risk of delinquent accounts. A separate file must be maintained
for each debtor and include the original credit application and any amendments thereto and all
current invoices outstanding (together with supporting documents).
Alternatively a separate file may be kept for all credit applications; and invoices (together with
supporting documents) may be kept in the day bag filed by checkout date.
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V Credit meeting
A credit meeting should be held at least once a month with the participation of the Credit Manager,
General Manager, Financial Controller, and all relevant Heads of Department to review and
discuss:
- Previous meeting minutes and update on status
- New credit applications and change of status for any current debtor
- Debtor ageing balances with special attention to all “over 60-days” balances
- Permanent and pending in-house guest accounts
- Pending guarantee deposits to be received and expired deposits
- Forced credit accounts
- Dishonoured cheques and credit card charge backs
- Potential and actual bad debt accounts (and external debt collection actions if any)
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Subject: Credit Policy Page: 1 of 11
OBJECTIVE
To define a proper evaluation and approval process for new customer accounts or credit limit
increases for existing debtor accounts in order to reduce future potential collection problems.
POLICY
1. Credit should only be extended to customers who have been subject to a pre-arranged
thorough review of their credit status.
2. The credit application must be formalized, stating maximum credit permitted, payment
terms and methods, people authorized to make bookings on behalf of the debtors etc. All
credit applications should be renewed annually for solvency checks.
3. An up-to-date authorized debtors listing must be maintained, stating the credit limit and
terms available to each debtor and communicated to all relevant staff.
4. The Credit Manager is responsible for the review of the application and investigation of the
applicant’s credit history. All credit applications must be approved by the Financial
Controller and the General Manager. In the case of an Accounting Hub, credit applications
are approved by the Senior Financial Controller.
PROCEDURE
I- Credit Application procedure
1. A company wishing to open a credit facility with the hotel must complete a hotel credit
application form (sent by the Sales & Marketing department) stating:
- Company details (Name, address, corporate name, etc)
- List of persons authorized to make bookings on behalf of the company (Name, position,
ID number, specimen of signature)
- Credit references
- Invoicing details (Billing address, contact person, etc)
2. Once received, the Credit Manager must review the application for completeness and
accuracy. Missing or erroneous information may result in delays or rejection of the
application. Then the Credit Manager will perform a formal check of the solvency of the
company, through:
- The use of independent credit investigation agencies (such as D&B) or investigative
services on internet
- The investigation of the credit references given by the applicants
- The enquiries made to other hotels in the Accor group
Detailed results of the enquiries must be attached to the credit application.
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For a company with a past relationship with the hotel, any information with regard to their
prior history (such as returned cheques, non-compliance with payment terms, settlement
disputes, etc) must be included.
3. The Credit Manager will review the credit application and the results of the credit
investigation to propose the approval or rejection of the credit facility.
4. The credit application file will then be submitted to the Financial Controller and the General
Manager for their final approval before execution. If approved, the credit line and terms
authorized must be in accordance with the hotel’s credit policies.
5. After completion of the process, the Credit Manager will send an official letter to the
applicant to inform him of the result of the application and outlining the conditions of the
credit granted, including the credit limit and payment terms. A provision should also be
included to advise that credit will be cancelled if the terms of the credit are not respected.
6. The approved credit application should then be filed in alphabetical order in the credit
department.
7. In the case of government accounts, there is no need for a credit application to be

completed. The Credit Manager must however verify that it is a bona fide government
department. Government bodies that are not 100% owned by the government are still
required to complete the credit application.
8. In countries where there is a National Credit Manager, national credit may have been
granted to clients. In this case hotels are not required to have a hotel specific credit
application completed. They must however verify that the client is on the current national
credit listing.
II- Credit application maintenance
1. A credit file for each debtor account, containing the authorized credit application with all
supporting solvency check documents attached, is maintained by the credit department.
A summary list of all companies with authorized credit should be maintained for easy
reference, listed by sub-category and stating:
- A/R code
- Company name
- Date of approval of the credit application
- Credit limit and terms granted
- Invoicing terms
This summary should be distributed to all relevant department heads.
2. The credit worthiness of the debtor must be reviewed annually, ensuring there is no
change in the company status and that the persons authorized to make bookings on behalf
of the company are still valid.
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- In Asia, a new credit application is sent to the client and the former credit application is
then replaced if received. Otherwise a note must be made on the debtor file with regard
to the status of the client.
- In the Pacific, the status of the client must be noted on the debtor file.
3. Credit limits must be reviewed regularly by the hotel management. Any company over the
credit limit should be discussed in the credit meeting. There are two main reasons why a
company is over its credit limit:
- The volume of business generated by the company over the period is more than the
credit limit. In that case, the credit limit should be increased accordingly.
- The company is experiencing difficulty with payment. In that case, the option of
removing credit authorization temporarily or permanently must be discussed. A floating
deposit system should be considered.
4. Any changes in the credit limit must be formalized with a new credit authorization form
being approved by the Financial Controller and the General Manager and subsequently
attached with the original credit application.
5. The Financial Controller is responsible for performing regular checks to ensure the filing is
properly and accurately maintained.
III- Form samples
- Credit application form - Asia

- Credit application form - Pacific
- Credit reference check – form
- Letter of offer – credit facility
- Example of credit denial letter
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CREDIT APPLICATION FORM - ASIA
NOTE: It is important that this form is completed in full. Insufficient information may result in unnecessary delay in
processing your application. All terms and conditions over leaf are deemed to be part(s) of this application and
have been read, understood and accepted by you in total at time of your application for credit facilities at the hotel
Name of Company or Firm: Nature of Business:
Address: Phone Number:
Type of Company : PRIVATE / PUBLIC LTD / SOLE PROPRIETOR / PARTNERSHIP

(Delete where not applicable)
Authorized Capital : Paid-Up Capital : No. of Employees :
PARTICULARS OF PERSONS AUTHORIZED TO MAKE HOTEL ARRANGEMENTS, ISSUE INSTRUCTIONS AND

SIGN ON BEHALF OF COMPANY.
Name in Position Held ID Card or Passport Signature
BLOCK CAPITAL Number
1
2
3
4
NOTE: Please notify the hotel if there are changes or amendments to the above authorized signatories. If written
notification is not received, the above signatories will still be valid and the company is still liable or all changes
incurred thereafter.
Company’s Bankers : Account No :

(Please State Branch)
Bank Address : Registrar of Company (ROC) No :
DO YOU OR YOUR COMPANY PRESENTLY HAVE OR PREVIOUSLY HAD AN ACCOUNT WITH OTHER HOTELS IN
THE ACCOR GROUP (If YES, please furnish the following particulars)
Name of Hotel: Address:

1
2
3
The undersigned (an authorized signature) hereby requests that a corporate account be opened at THE HOTEL.
In connection with the above particulars, the undersigned authorizes the receipt and exchange of credit
information. The company will be liable for all charges incurred at THE HOTEL, by the company’s guests unless
otherwise instructed in writing. The company will be bound by the terms and conditions contained over leaf
upon approval of the application for credit facilities at THE HOTEL.
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CREDIT FACILITIES – TERMS AND CONDITIONS
1) These terms and conditions are deemed to be part(s) of the application for credit facilities at THE HOTEL (insert
hotel name).
2) Granting of credit facilities shall be at the sole discretion of THE HOTEL.
3) All charges incurred by the company shall be billed to its business address and settlement of outstanding shall be
payable within the credit term (insert credit term) upon presentation of the bills.
4) The amount of each bill should be paid excluding of any bank charges and in the currency of the bill.
5) The company must inform THE HOTEL if there are any changes / amendments to the authorized signatories or any
other related matters. Prior to the receipt of written notification the company will still be liable for any charges
incurred thereafter.
6) This credit facility is not transferable to other companies, sister companies or associates companies of the approved
company.
7) For all credit balances which are not cleared within the credit term after receiving the bill, 2 (two) percent interest
per month will be applied and reservation will be treated on cash basis.
8) The hotel reserves the right to withdraw, suspend or increase the credit facilities at any time. Such notification shall
be made in writing to the company informing them of the hotel’s decision without having to assign any reason
whatsoever.
9) The company undertakes to reimburse and to indemnify the hotel for all looses expenses and damages that have
resulted directly or indirectly from the negligence and/or malicious actions of the company and/or his guests.
10) This present form is valid until DATE (insert date).
11) In order for this credit facility to be valid, please return this completed application by facsimile or email, and we shall
reply to your application as soon as possible.
SIGNATURE & COMPANY STAMP :
* Please attach a copy of your passport or identity card for verification.

Name : Designation :
CONTACT PERSON RESPONSIBLE FOR THE PAYMENT
Name : Position :
Tel. : Fax. :
E-mail Address : Signature :
Mailing Address :
OPERATION MANAGER / handling agent
Name : Position :
Tel. : Fax. :
E-mail Address : Signature :
Mailing Address :
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CREDIT AUTHORISATION APPROVAL FORM
Name of Company or Firm:
Recommended by: (Name & signature) Position:
Remarks (if any):
Verified by: (Name & signature) Position: Credit Manager
Credit Limit Granted:
Director of Sales : Approved / Disapproved
Financial Controller: Approved / Disapproved
General Manager: Approved / Disapproved
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CREDIT APPLICATION FORM – PACIFIC

(INSERT YOUR BRAND LOGO)
HOTEL CREDIT APPLICATION FORM - AUSTRALIA
Address
City
Australia
Phone: & fax:
AAPC Limited (Company Number)
The information on this application form will be treated in the strictest confidence.
IMPORTANT All questions must be answered. (Please print clearly).
Please send this application directly to the Accor Hotel that you wish to apply for credit at.
Registered Name: …………………………………………………. Applying for credit at which Accor Hotel/s : ……………
………………………………………………………………. ……………………………………………………………….
Trading Name………………………………………………………. Registered Office (if company): ……………………….
………………………………………………………………………... ……………………………………………………………….
Postal Address …………………………………………………….. List (3) hotels that you have established credit facilities
with :
………………………………………………………………………...
1) ……………………………… Ph:………………………
Principal Place of Business:………………………………………. 2) ……………………………… Ph……………………….
Phone No: …………………………………………………………... 3)………………………………. Ph:………………………
Fax No: ……………………………………………………………… List (3) Trade references (Name & Phone No.)
A.C.N. or A.B.Number :….………………………………………… 1)…………………………………………………………….
Business Activity:…………………………………………………… ………………………………………Ph:…………………
Type of Business: Sole Trader / Partnership / Company 2)……………………………………………………………
Contact Name for Account Enquiries: ….…………..……………. ………………………………………Ph:………………….
Contact Phone for Account Enquiries:…………………………… 3)……………………………………………………………
How many years trading: …………………………………………. ……………………………………….Ph:………………….
Website Address : …………………………………………………. Name of Accor Sales contact: …………………………...
CREDIT LIMITED REQUIRED Page two of this form must be completed
$…………………………………..PER MONTH Initials : _________
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The Proposal
I/We the proposer(s) hereby agree that the following terms and conditions under which this credit proposal, if granted will
operate.
The Hotel, is herein named “The Company”.
1. Settlement will be due and payable within 14 days of the proposer(s) date of invoice(s)
2. The proposer(s) agree(s) to confirm in writing, or by telex/fax the charges for which responsibility will be accepted in
respect of each reservation made. Further, the proposer(s) will advise the company of any change of details
submitted as soon as they become known.
3. The company will rely on the representations and statements by the proposer(s) in this proposal.
4. It is expressly agreed that in the event that just debts owing to the company by the proposer(s) become 60 days
overdue from the date of invoice, then interest at a rate of 1.5% per month will be payable on such overdues, from
the date of reaching 60 days overdue.
5. The company has the right, without notice to terminate any or all credit facilities to the proposer(s), at the company’s
absolute discretion, and all just debts, (plus interest if applicable as in point 4 above), owing by the proposer(s) to
the company will then become due and payable immediately on demand.
6. The company has the right to set limits on the amount of the credit facility made available, and to vary these limits at
any time, at the company’s absolute discretion.
7. The proposer(s) will indemnify the company for the costs, being either legal costs and/or collection costs or
commissions of recovering just debts owing by the proposer(s) to the company.
8. The proposer(s) give consent for the company to perform credit checks with third parties (i.e. Dun & Bradstreet),
and to perform trade reference checks, in order to establish credit worthiness.
9. The company reserves the right to request an advance security deposit if the proposer(s) book conferences or book
large group accommodation.
10. The company reserves the right to impose a surcharge if the proposer(s) decide to pay invoices by credit card.
The information provided in this application is to the best of my knowledge, and belief, true and correct. I warrant that I
have read the terms and conditions of this proposal and have the authority to sign it.
Signed for and on behalf of……………………………………………………………………………………………………………

Name:……………………………………… Title:…………………………………………………….. Date:………………………..
Signature: ……………………………………………… (Director, General Manager, Partner or Company Accountant only)
FOR OFFICE USE ONLY:
Issued by: ………………………..……………………………………………………………………………………………………...
Trade References Checked and verified by………………………………………………………………………………………….
Credit Limit: ………………………………………Credit Rating:……………………………………………………………………..
Approved by: ……………………………………. Position …………………………………….Date: ……………………………...
Approved by: ……………………………………. Position …………………………………….Date: ……………………………...
Credit valid until: ……………………………Date of review: …………………………………….................................................
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Credit Reference check form
Hotel Name
CREDIT REFERENCES
Internal Use Only
APPLICANT [TRADING NAME]:
REFERENCE 1 - COMPANY: DATE CONTACTED:

TELEPHONE: FAX: CONTACT NAME:
CREDIT ESTABLISHED SINCE [DATE]: AVERAGE MONTHLY EXPENDITURE [$]:

PAYMENT TERMS [DAYS]: PAYS WITHIN [DAYS]:
COMMENTS:


COMMENTS:


COMMENTS:
RECOMMENDATION: TO [APPROVE/ DENY] CREDIT.
CREDIT LIMIT: RATING:
PREPARED BY [NAME & POSITION]: DATE: SIGNATURE:
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Letter of Offer - Credit Facility
{on hotel letterhead}

Date
Company Name
Address
Dear _____________________
Re: Credit Application
With reference to your credit application dated , we are pleased to inform you that your
application for a credit facility of______ (“insert amount”) with us has been approved with a credit
term of days (insert number of days) and in addition to the conditions specified in the
application form.
1. All bookings require a written authorization (letterhead fax, letter or email), or voucher, to
be sent, stating clearly what charges are to be charged back to your company for payment.
2. All charges incurred by the company shall be billed to its business address. Settlement of
outstanding invoices shall be payable within the credit term from the date of the invoice, or
immediately if the balance of the account rendered has reached its credit limit.
3. The hotel reserves the right to withdraw or suspend the credit facility at any time without
notice if the terms of the credit application are not respected.
We prefer payment by bank transfer, with the hotel bank details as follows:
Bank Name :
Bank Address :
SWIFT Code :
Account Name :
Account Nº :
Should you have any query, please do not hesitate to contact us.
Yours faithfully,
Financial Controller General Manager
Cc. DOR/ DSM/ Credit Manager
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Example of Credit Denial Letter
Date
Company name
Address
Dear _____________________
Re: Credit Account Application
Thank you for your application for credit facilities at the “Hotel” (insert hotel name).
Unfortunately, we are unable to provide your company with a credit facility as the information we
have so far obtained does not permit us to extend credit to your company. We therefore regret that
we are not in a position to comply with your request.
In the meantime, in the absence of credit arrangements please note that we will either require
payment by credit card upon check-in or full pre-payment of future bookings.
Thank you very much for your attention and kind cooperation on this matter. We certainly hope
that we will continue to have the privilege of working with you and your company.
Yours faithfully,
________________________ __________________________
Financial Controller General Manager
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Subject: Guarantee of payment Page: 1 of 3
OBJECTIVE
To ensure that payment guarantees are systematically requested and proper control policy is in
place in order to minimize the risk of non-payment.
POLICY
1. A guarantee of payment must systematically be provided for all hotel guests upon check in.
2. For a banqueting event (seminar, wedding, catering), a contract must be signed between
both parties and a deposit/down payment requested and paid before the event taking
place.
3. The Credit Manager must ensure that all guarantees of payment for banquets are received
on time and as per the contract, and must also spot check that front office is properly
applying the guarantee of payment policy upon check in.
PROCEDURE
I- In-house guest control
1. Individual guests are required to provide a guarantee of payment at the time of check-in,
using either cash or a credit card pre-authorization. In the case of a cash deposit, room
charge facilities may be denied depending on whether the deposit is sufficient to cover
potential charges.
The guaranteed amount must be equal to the room rate x number of nights + an estimate
of incidental charges (per day).
2. For corporate/ groups/ travel agent clients, reservations must ensure that all guarantees of
payment have been received by checking the expected arrivals report for the following day
against the reservation files. Front Desk must be advised on any missing guarantee so that
the booking confirmation letter and/or voucher is presented at the time of check-in at the
latest. When some incidentals are not covered by the letter of guarantee, a cash deposit or
credit card pre-authorization must be requested from the guest upon check-in.
3. For long stay guests paying their own account, adequate deposit should be received.
Alternatively, a new credit card pre-authorization should be taken on a weekly basis and
the account settled against the pre-authorization at the end of each week. For long stay
corporate guests, the company should be billed on a weekly basis.
4. The Credit Manager must regularly perform spot checks to ensure that guarantees of
payment are properly taken and received as per the hotel policy (ie credit card
authorization taken, booking confirmation letter/voucher received, etc).
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5. Systematic daily checks must be performed for high balance guest accounts showing an
unusual accumulation of charges, i.e. those with outstanding balances exceeding the daily
estimate of charges referred to above.
II- City ledger control
1. Bookings made by corporate clients must be supported by a letter of authorization on

Company letterhead and signed by an authorized signatory. Travel agent reservations
should be guaranteed by a voucher (issued by the relevant booking engine or presented by
the guest).
2. The booking confirmation letter must be on the company’s letterhead and contain the
following information:
- Name and position of person authorizing the billing and their signature.
- Name of the guest
- Period of stay
- Description of charges to be billed to the company
Where the authorization covers only a certain period and that period has expired, a new
guarantee letter and/or voucher must be obtained.
3. Charge back facilities shall only be granted to companies and travel agents who have
approved credit facilities.
4. Regular spot checks must be performed by the Credit Manager to ensure that guarantee
letters and vouchers are valid and kept in guest files.
III- Contracted events control
1. For special events like banquets, seminars, wedding ceremonies, etc a contract must be
signed between the hotel and the third party, where conditions pertaining to the deposit or
down payment are defined as part of the general sales conditions (this may be calculated
with reference to percentage of estimated revenue). Other conditions to include total
amount, schedule for payment, situations where the deposit may be refundable etc.
2. Unless the company has a credit facility with the hotel, the request for deposit or down
payment is compulsory. Only the General Manager can waive the deposit and in this case,
the sales contract must be signed by the General Manager.
3. There must be sufficient time between the day of deposit and the day of the event to seek
an alternative solution in the case of non-payment.
4. Proposed sales contracts should be reviewed by the Credit Manager before sending to the
client for signature. Once approved and signed by the third party, a copy of the executed
contract must be sent to the Credit Manager.
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5. The Credit Manager has the responsibility of ensuring that the payment of the requested
advance deposit is received according to the terms of the contract. In the case of non-
payment, the hotel staff member who negotiated the contract must liaise with the third party
to get immediate payment or the contract will be cancelled.
6. Deposits received must be booked into the PMS advance deposit ledger and transferred to
the guest folio upon arrival.
7. Deposits and credit balances relating to past events must be reviewed by the Management
on a monthly basis and appropriate action taken (ie reimbursement to client or rebooking of
event to a later date). They must not be kept in the Front Office ledger open balances, but
rather transferred to the general ledger as a sundry creditor.
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Subject: Transfer to City Ledger procedure Page: 1 of 2
OBJECTIVE
To ensure the proper transfer in a timely manner of all balances from checked-out guests into the
A/R City ledger, as per the hotel policy.
POLICY
1. Charges owed to the hotel by customers who have since left the hotel should be
transferred from the Front Office guest ledger to the Back Office city ledger the following
day and posted by Accounts Receivable into the related individual sub-ledger accounts.
2. The correctness of the customer balance and the completeness of all guest folio
documents must be checked by Accounts Receivable prior to the transfer occurring.
3. Any accounts used as temporary or suspense accounts (PX accounts) must be cleared
every day with any outstanding balances of more than one day to be reported to the Credit
Manager.
4. A copy of all accounts receivable invoices must be kept by AR and filed with supporting
documents.
PROCEDURE
1. At check-out, the Front Office Cashier must verify the company to be charged and transfer
the folio into the A/R transfer account. Permanent folios (PM accounts) maintained in the
guest ledger must be strictly controlled and limited to:
- Tenant accounts: transfer to A/R for subsequent billing should be done once a month or
according to the contract.
- Resident staff accounts, promotional vouchers accepted, mini-bar denials, breakfast
package split, late breakfast charges, lost interface charges, etc.
All pending balances in clearance folios must be cleared within 24 hours after check out.
2. Accounts Receivable must ensure that all folios transferred the previous day are complete
and correct before transferring them to the individual city ledger account, i.e.:
- A/R account selected and account that should be billed are the same;
- The rates are correct,
- All transferred folios are fully supported by documents i.e.: guest registration card,
Travel agent voucher and/or letter of guarantee.
3. In the case of missing documents or incorrect allocation from the Front Office cashier,
Accounts Receivable must immediately inform the Credit Manager who will liaise with the
Front Office Manager to arrange the collection of missing documents and ensure that
procedures are put in place so that the situation does not reoccur.
4. In the case of invoicing a company without an account in the city ledger, the folio will
remain in the guest ledger and actively be followed up for immediate payment by the Front
Office department. These outstanding accounts must be included in the monthly credit
meeting.
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Subject: Transfer to City Ledger procedure Page: 2 of 2
5. Credit balance folios must be transferred on a daily basis into A/R city ledger. As such, the
Credit Manager will create on request individual A/R accounts under the main category
“Guest overpayment”. This amount must then be investigated and refunded to the client, if
appropriate, by the Finance department.
6. A daily print out of the detailed A/R transfer account from the PMS system should be done
by A/R and controlled by the Credit Manager to ensure that amounts to be transferred to
back office are not held between front office and back office for more than 2 days.
7. The guest and city ledgers must be reconciled with the general ledger accounts daily and
all discrepancies explained and corrected.
Page 20 of 48
FIN-03-05
Subject: Invoicing procedure Page: 1 of 2
OBJECTIVE
To ensure the timely preparation and distribution of debtor invoices to minimize delays in cash
collection.
POLICY
1. A/R invoices must be generated from the A/R system and sent with necessary supporting
documents to all debtors as per the pre-defined time schedule (ie within 2 days of checkout
or monthly for some travel agents).
2. The date of mailing out the A/R invoice must be recorded. Alternatively, emailing invoices
in a PDF format should be considered.
3. A copy of the A/R invoices must always be kept in debtors’ filing until full payment has
been received.
PROCEDURE
1. A time schedule stating when the invoices are due to be sent to debtors must be defined by the
Credit Manager and strictly adhered to by Accounts Receivable.
- For Company’s individual guests: A/R invoice to be prepared and sent within 48 hours of
checkout.
- For Travel agents: depending of the volume of business and the agreement signed,
generally on fortnightly or monthly basis.
- Monthly spots checks must be performed by the Financial Controller (or delegate) to ensure
that the time schedule is adhered to.
2. For each guest folio transferred to City Ledger, Accounts Receivable will generate from the
system an invoice per folio or per batch (grouping several folios in one statement) to be sent to
the customer as detailed above.
Any supporting documents as requested by the debtor, for proceeding to payment, must be
attached (ie guest folio with related accommodation voucher/guarantee letter, etc).
3. For a hotel allowing payment in a foreign currency, the equivalent total invoice amount in
the second currency must be stated on the system generated A/R invoice, using the
exchange rate of the day of issuing the invoice.
4. Amended A/R invoices are not permitted. If a credit is due to a customer a credit note must be
issued referring to the original invoice.
5. All invoices with supporting documents must be verified for accuracy by the Credit Manager
before being sent to the debtors.
6. In the event that the accommodation voucher or guarantee letter to support the billing is
missing, Accounts Receivable must immediately inform the Credit Manager who will liaise with
the relevant Head of Department responsible for providing a copy of the missing document.
Page 21 of 48
FIN-03-05
Subject: Invoicing procedure Page: 2 of 2
7. A debtor file for each account must be maintained by Accounts Receivable with a copy of the
invoice, any accommodation vouchers/guarantee letters and guest folio kept in the file until full
payment is received. In addition a copy of each month’s statement should be kept in the file.
Alternatively, invoices (together with supporting documents) may be kept in day bags, filed by
check-out date. This method of filing is usually adopted in Pacific hotels.
Page 22 of 48
FIN-03-06
Subject: Accounts Receivable follow-up Page: 1 of 12
OBJECTIVE
To handle all accounts receivable with late or delinquent payment activity in a timely and effective
manner to ensure maximum collections and an optimum accounts receivable turnover ratio.
POLICY
1. The Credit Manager or A/R staff should be in regular phone contact with the account
customers, in particular with those with overdue amounts. All specific collection actions
taken and reminder letters should be kept in each debtor’s file or noted on the PMS file
where the system allows for such reminders.
2. An aged accounts receivable report should be run and reviewed by the Credit Manager
weekly. At month-end, the Accounts Receivable balance in the General Ledger must agree
with the total aged Accounts Receivable from the A/R system.
3. A credit meeting must be organized at least once a month to review all debtors’ accounts
with the participation of the Credit Manager, General Manager, Financial Controller and all
concerned department heads.
PROCEDURE
I- Accounts Receivable follow-up
1. Accounts Receivable should regularly call all debtors in order to maintain good relations
and ensure the payment on time of all amounts outstanding as per the credit
agreement/contracts.
- After sending a new invoice to ensure the person in charge of the payment has
received it.
- Before the due date to ensure the payment will be rendered on time.
A record of such courtesy calls must be maintained to avoid mismanagement, stating
the date, name and position of contacted person, the result of the call, etc…
2. As soon as an account becomes overdue the Credit Manager must verify each account
and in particular:
- Verify that the A/R invoice has been immediately sent out to the customer.
- Check that the payment has not been received and applied to the wrong account or is
yet to be recognized.
- Review the customer’s past payment activity to determine if they are chronically late
and what their response has been to any other overdue notices to determine payment
patterns or trends.
3. Upon review of the above, the collection process must start and all actions taken should be
dated and recorded with all customer agreements and explanations noted. If payment has
not reached the hotel by the expected date, immediate follow-up action must be taken with
another collection call or letter.
Page 23 of 48
FIN-03-06
The process should include the following:

- A detailed ageing summary of account: for all debtors with an open balance, Accounts
Receivable will generate monthly statements of outstanding accounts (with individual
invoice information and days outstanding) and issue them systematically to debtors at
month-end. The statements must be checked for accuracy and there shouldn’t be any
unallocated payments.
- When 30 days credit is granted, standard Reminder delays recommended by Accor

Corporate Credit Management are as follows:
25 days after invoice 1st telephone call (courtesy call)
35 days after invoice 1st reminder letter (Credit Manager)
40 days after invoice 2nd telephone call
45 days after invoice 2nd reminder letter (Financial Controller)
50 days after invoice 3rd telephone call (GM)
60 days after invoice 3rd letter (GM)
75 days after invoice Final letter and case passed to debt
collector
If the hotel grants different credit terms, these reminder delays can be amended
accordingly.
4. Telephone communication will often speed up the collection process. When speaking with
a delinquent account, a few tips should be observed:
- Identify yourself and the hotel and state the reason for calling. Be direct and use a
controlled, confident voice. Concentrate on listening to the customer and don’t rush
through the call.
- Get the facts; try to gain as much insight into the situation as possible.
- Never argue, accuse or be condescending. The ultimate purpose is to secure payment
and this is best accomplished without becoming defensive or irritated.
- There are several common objections, complaints and excuses used to elude payment:
• “I didn’t get the invoice”: respond by verifying the debtors’ name and address, and
then review the account information with them
• “The cheque is in the mail”: extend your thanks, then ask for a cheque number,
amount, date posted and address to which it was mailed
• “Your payment is being processed”: ask when the payment will be ready for the
mail. Determine the process that the payment undergoes after it leaves your
contact’s desk
• “I have no money”: create a payment plan. Work toward making the plan
acceptable to both of you.
Page 24 of 48
FIN-03-06
II- Seriously delinquent or unresponsive accounts
1. When an account becomes more than 50 days old (20 days overdue) the immediate target
of securing prompt payment takes on a greater sense of urgency. The Credit Manager
must review the account and additional steps should be taken such as:
- Participation of senior management in securing the payment,
- Debtor blacklisted, thereby preventing the extension of any further credit to the debtor
unless outstanding debts are cleared.
2. When all other avenues for collection of the account have been exhausted (and 75 days
have passed) overdue accounts should be forwarded to an outside collection agency
before considering the debt uncollectible. However, such recovery action must be initiated
based on a complete file and an accurate estimate of all the foreseeable costs related to
the action from the firm conducting the recovery process. The use of an outside collection
agency must be authorized by the General Manager.
3. When every necessary action has been taken in attempting to collect the outstanding
accounts, the Credit Manager must inform the Financial Controller that the accounts should
be considered uncollectible.
III- Ageing debtors balance
1. Accounts Receivable is responsible to keep all individual accounts up-to-date and maintain
the subsidiary ledger (which records the receivable amounts and payments received
against each debtor). The Credit Manager must ensure on daily basis that the subsidiary
ledger and General Ledger are balancing.
2. Periodically, the Credit Manager or Financial Controller is to randomly select Debtors’

accounts and ensure that:
- All A/R invoices that are recorded in the debtor ledger, with all supporting documents
attached (i.e.: Travel agent voucher or guarantee letter, monthly statement of account,
and all reminder letters attached to over-due invoices) can be easily retrieved.
- When filing is done by Debtor account. all paid invoices are marked as such and
removed from the current debtors’ filing to be filed separately with all payments of the
month.
- Payments received are promptly allocated against the correct invoices as stated on the
remittance advices issued by the debtors. The hotel must request from all debtors that
remittance advices be sent along with the payments.
- There are no unexplained unallocated payments.
- Monthly statements are sent to all debtors.
- Follow-up actions are properly documented (telephone calls, reminder letters) and
reminder delays respected.
Page 25 of 48
FIN-03-06
3. At the end of the month, Accounts Receivable must print out the Accounts Receivable
Ageing Balance report (summary and detailed) to be used to support the General Ledger
account reconciliation. The Financial Controller must ensure that the total A/R ageing
summary and the General Ledger balance.
4. When employee accounts are authorized by the hotel, they must be settled on a monthly
basis through salary deductions. Balances must be closely monitored and the Financial
Controller must ensure the strict respect of the hotel policy.
IV- Credit meeting
1. A credit meeting is to be held at least once a month and is based on the review of the
current debtors’ ageing report. The following points are discussed:
- Previous meeting minutes and update on status
- New credit applications and change of status for any current debtor
- Debtor ageing balances with special attention to all “over 60-days” balances
- Potential and actual bad debt accounts (and external debt collection actions if any)
- Permanent and pending in-house guest accounts
- Pending guarantee deposits to be received and expired deposits
- Forced credit accounts
- Dishonoured cheques and credit card charge backs
2. This meeting should be chaired by the Credit Manager with the participation of the General
Manager, Financial Controller, and all other relevant Department Heads.
3. Detailed minutes of the meeting must be taken and distributed to all attendants. The
minutes must be reviewed at the time of the following meeting.
V- Average Recovery Delay
1. The Average Recovery Delay must be calculated on monthly basis based upon the
receivables revenue and reported to the hotel management.
2. The calculation is as follows:
Total of Month aged trial balance

x 30 days
Average turnover in debtors account for the last 3 months
With the average turnover in debtors account for the last 3 months calculated as the total
transfers to debtors ledger (excluding credit cards) for the last 3 months in average (i.e.
divided per 3).
Page 26 of 48
FIN-03-06
VI- Standard reminder letters and control forms

- Collection letter – 1st reminder
- Collection letter – 2nd reminder
- Collection letter – 3rd reminder
- Collection letter – 4th reminder
- Telephone reminders – tracking spreadsheet
- Credit meeting minutes
- AR analysis – M8 report
Page 27 of 48
FIN-03-06
Collection Letter - 1st Reminder (35 + days, 15 if Conference)
{“on hotel letterhead”}

Date
Company Name
Address
Dear _____________________
Re: Balance Due $
According to our records, the above balance is overdue. Please arrange prompt payment of this
account.
Our hotel bank account details are as follows:

Account Name:
Bank:
BSB:
Account Number:
Swift Code (iBan):
If you have any questions about your account, or any of the invoice/s then please do not hesitate
to contact us, as soon as possible.
My direct contact number is __________ {insert telephone number}. You can also contact me via
email on ______________ {insert email address}
If payment has been made prior to receipt of this letter, then please disregard.
Yours faithfully,
_________________
Name
Position
Page 28 of 48
FIN-03-06
Collection Letter – 2nd Reminder (45+ days)

Date
Company Name
Address
Dear _____________________
Re: Overdue Account $
You may have overlooked our statement and earlier reminder requesting settlement of your
outstanding account which is now 45+ days past invoice date.
We request that you make immediate settlement on the receipt of this reminder. Our bank account
details are below:
Account Name:
Bank:
BSB:
Account Number:
Swift Code (iBan):
My direct contact number is _________ {insert telephone number} and my email address is
_________ {insert email address}. Please do not hesitate to call me if you have any queries or
would like to confirm when you will be making payment.
Thank you in advance for your prompt attention.
Yours faithfully,
______________
Name
Position
Page 29 of 48
FIN-03-06
Collection Letter – 3rd Reminder (60+ days)
Date
Company Name
Address
Dear _____________________
Re: Overdue Account $
We refer to our previous reminders regarding your outstanding account. To date this account has
not been paid or resolved. We wish to remind you that in accordance with the credit application, all
accounts are payable in full within 14 (or 30) days from the date of the invoice.
We urge you to make immediate payment on the receipt of this reminder, in the interest of
continuing a good business relationship. Our bank account details are below:
Account Name:
Bank:
BSB:
Account Number:
Swift Code (iBan):
Please contact us immediately otherwise we will have no choice but to suspend you credit facilities,
and ask for prepayment of all future bookings.
We remind you that we are entitled to impose a penalty fee for delay in payment of any amount in
60 days or older.
My direct contact number is __________ {insert telephone number} and my email address is
__________ {insert email address}.
Yours faithfully,
______________________
Name
Position
Page 30 of 48
FIN-03-06
Collection letter - 4th Reminder (75+ days)

Date
Company Name
Address
Dear _____________________
Your credit facility with the ___________ {insert Hotel name} has currently been suspended.
Despite our numerous reminders, your account is still outstanding.
If we do not hear from you within the next seven (7) days, we will have no alternative but to refer
this matter to our solicitors or collection agents for collection. Needless to say, your credit
privileges with our Hotel will be terminated and your file forwarded for further action.
We remind you that we may also impose a penalty fee for all amounts overdue 60 days or more.
If you have already paid or sent payment, please advise us immediately. Our bank account details
are below:
Account Name:
Bank:
BSB:
Account Number:
Swift Code (iBan):
If for any reason you are unable to make full payment, please contact me to discuss further. My
direct contact number is __________ {insert telephone number} any my email address is
____________ {insert email address}. I urge you to make contact immediately.
Yours faithfully,
_______________________
Name
Position
Page 31 of 48
FIN-03-06
Telephone reminders – Tracking sheet
ACCOUNTS RECEIVABLE
TELEPHONE REMINDERS - TRACKING SHEET
Debtor:
Type of Client:
Address:
Contact name:
Telephone No:
Fax No:
Email address:
Invoices Chased:
Reminder Person Payment
Call done Billing Number of Invoices' Total Overdue
Date: Time: number (R1, R2, contacted Comment/ Result received
by: period invoices numbers Amount by: (+days)
R3) (& date)
Prepared by:
Supervised by:
*** Telephone reminder tracking sheet must be filed in each debtors' folder ***
*** Attach a print out of the debtor's account statement as at the date of your call ***
*** If an adjustment is required, fill-in an adjustment voucher and submit to authorised manager for approval ***
Page 32 of 48
FIN-03-06
Credit meeting minutes- standard template
Hotel Name
CREDIT MEETING MINUTES

Date:
Attendees:
1 - Review of previous minutes action points:

Account Issue / Comment Action by
2 - Guests Ledger review: house accounts, PM and PX accounts

3 - Debtors Ledger review: accounts over 60 days

4 - Forced credit accounts:

5 - Dun & Bradstreet Debt Collector:

6- Dishonoured cheques and credit cards chargebacks:

7- Provision for doubtful debt:

8- New credit accounts:

Miscellaneous:
Next meeting:
Credit Controller: Date:
Financial Controller: Date:
General Manager: Date:
*** Attach a copy of the guests ledger and debtors ledger reviewed during the meeting and keep on file***
Page 33 of 48
FIN-03-06
Accounts Receivable analysis: M8 report
ACCOR ASIA PACIFIC FORM M8

Run on: 28-Jun-10
Hotel : Enter hotel name
___________________________
ACCOUNTS RECEIVABLE ANALYSIS
Date Last In House Guest Ledger Check : enter date

Date Last Credit Meeting With G.M. : enter date
1 Debtor Ledger & Guest Ledger Balance:
Current 30+ Days 60+ Days 90+ Days 120+ Days Total
Guest Ledger - - -
#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Debtors Ledger Current 30+ Days 60+ Days 90+ Days 120+ Days Total %
Airline Business - #DIV/0!
Inbound Business - #DIV/0!
Corporate - #DIV/0!
Affiliated - #DIV/0!
Government - #DIV/0!
Travel Agents - #DIV/0!
Reward Schemes - #DIV/0!
Others - #DIV/0!
SUBTOTAL - - - - - - #DIV/0!
#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Credit Cards - - - - #DIV/0!

TOTAL - - - - - -
#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
60 Days and Over (excluding credit cards) #DIV/0!

60 Days and Over (including credit cards) #DIV/0!
2. A/R Ratio Analysis
Total transfers to Debtor's Ledger excluding credit cards

2.1 Current Month
2.2 Previous Month 1 Total : - = - (Average)
2.3 Previous Month 2
Ratio Accounts Receivable/Debtor's Turnover = 0.00 Months or - Days (DSO)
3. Receivables Turnover Analysis
Month YTD
Total Rev. / A/R = Times Avg. Rev. / Avg.A/R = Times
0.00 - - 0.00
4. Credit Card Revenue for the Month Month Merchant No Year to Date (July to June)
Gross Revenue % Amount %
3.1 Bankcard / Mastercard / Visa #DIV/0! - #DIV/0!

3.2 American Express Int'l #DIV/0! - #DIV/0!
3.4 Diners Club Ltd #DIV/0! - #DIV/0!
3.5 JCB #DIV/0! - #DIV/0!
3.6 EFTPOS #DIV/0! - #DIV/0!
3.5 Total Credit Card Revenue - #DIV/0! - #DIV/0!
Page 34 of 48
FIN-03-07
Subject: Travel agent commission payment Page: 1 of 2
OBJECTIVE
To establish proper control procedures over the payment of the travel agent’s commission.
POLICY
1. Any commission payable to a travel agent must be supported by a valid agreement

between the hotel and the travel agent. Commission should only be paid to licensed travel
agents.
2. Any travel agent commission must be paid in accordance with the actual number of the
guests sent.
3. Payment of commissions should be done according to the terms of the agreement signed
between the two parties.
PROCEDURE
1. When a travel agent first applies for commission terms, an application should be completed
stating in particular the licensed travel agent reference number. The Credit Manager must
verify the license reference details by contacting the appropriate official body.
2. A commission agreement must be signed between the hotel and the travel agent prior to
the payment of any commissions. The approval of the contract after the application check
being performed by the Credit Manager is the responsibility of the Sales & Marketing
department; however any contract must be countersigned by the Financial Controller.
Then a copy of the approved agreement must be forwarded to:
- Credit department: for invoicing control and payment purpose
- Reservation department: to post into the reservation system the commission rates due
for the bookings received from each travel agent.
3. The reservation clerk is responsible to input the travel agent name and commission rate for
all reservations received. A commission report per travel agent can then be printed out
from the PMS to support any subsequent commission payments by A/R.
4. The commission payment procedures to the travel agent depend on the billing procedures
for the guests sent to the hotel.
- Billing sent to the Travel Agent: an invoice for the guest accommodation and any other
charges initially requested by the travel agent is prepared and sent to the travel agent.
It is then up to the travel agent to either pay the whole amount of the guest bill and then
invoice the hotel for the commission OR to pay the net amount.
When payment is received, the commission deducted is charged to the “Travel Agency
Commissions” expense account under Room department.
At month-end, a detailed summary of commission charged by travel agent should be
prepared for reference.
Page 35 of 48
FIN-03-07
Subject: Travel agent commission payment Page: 2 of 2
- Guest reservation done through Travel Agent with guest billed directly: a travel agent
commission statement is prepared, based on actual guest arrivals, and payment to the
related travel agent will be done accordingly.
5. The Income Auditor must review daily all checked out guest folios to identify any
commission to be paid as he checks the daily revenue. A detailed commission statement
summary per travel agent should then be prepared and sent to the Credit Manager for
review and reconciliation with PMS-generated commission report.
6. When payment is based on invoices issued by the travel agent, a reconciliation with the
hotel statement must be done. In any case, payment should be done according to the hotel
records.
7. Overseas travel agent commissions: for all Accor hotels under contract with ATACDis, all
overseas travel agent commission payments are managed by and paid to ATACDis. The
status of each overseas booking is maintained by the Reservations Manager through
TARS. Where there are adjustments due to change of the length of stay, room rates or no-
shows, the Reservation Manager must reconcile and update the preliminary statement
within the allowable timeframe. After review by the Credit Manager, the preliminary
statement is then confirmed via TARS.
On a weekly basis and upon receipt of the invoice from ATACDis, the hotel will proceed
with the payment.
For more detail on ATACDis refer to the separate manual available (“Accor Travel Agency
Commissions and ATACDis”) in the Finance section of your local Accornet.
Page 36 of 48
FIN-03-08
Subject: A/R rebate procedure Page: 1 of 2
OBJECTIVE
To ensure that all rebates/adjustments initiated by Accounts Receivable are justified and result
from incorrect charges.
POLICY
1. All adjustments made by Accounts Receivable (after transfer from guest ledger) must be
supported by a voucher authorized by the Credit Manager and other relevant Department
Head.
2. The General Manager should formally acknowledge all adjustments and rebates posted by
Accounts Receivable on a daily basis by signing the reconciliation between the A/R
adjustment vouchers and the end of day system generated report.
3. Accounts Receivable must not issue amended invoices. If an adjustment is necessary a

credit/ debit note must be issued.
PROCEDURE
1. An A/R adjustment voucher must be prepared and passed to the Credit Manager with all
supporting documents attached, for approval. The signature of the relevant Head of
Department should also be requested.
The adjustment voucher should be pre-sequenced, dated and with the following
information included:
- Guest folio number
- Name of the guest and room number
- Reason for the rebate/ adjustment
- Amount
- “Prepared by” and “Authorized by” signatories
2. The A/R adjustments can then be posted and usually relate to:
- Room rate adjustments: when actual rate charged and contracted rate are different
- Disputed charges: when a guest refuses to pay the charges billed partly or in totality
due to default of supporting documents from the hotel, charges to be paid by the guest,
etc.
3. All postings by Accounts Receivable must always be done in the guest ledger (as per
standard Fidelio procedure). The original guest folio will then be printed out together with
the credit/ debit note.
4. A summary of all adjustments/ rebates posted by Accounts Receivable should be prepared

on a daily basis and sent to Night Audit (or Income Auditor) with the adjustment vouchers
and supporting documents for reconciliation with the PMS end of day report. This is then
formally supervised by the General Manager on a daily basis.
Page 37 of 48
FIN-03-08
Subject: A/R rebate procedure Page: 2 of 2
Example: AR adjustment voucher
Hotel Name
Invoice / Debtors Ledger Adjustment
VOUCHER
No:
DATE: PREPARED BY:
DEBTOR: INVOICE AMOUNT:
INVOICE DATE: PAID AMOUNT:
INVOICE/ FOLIO No. SHORT PAID:
GUEST NAME/ ROOM No:
DEBTOR'S REASON FOR SHORT PAYMENT:
ADJUSTMENT
Amount Charged to Debtor: Correct Charges should be:

Unit Rate Amount Unit Rate Amount Code
Room $ - $ -
Breakfast $ - $ -
Lunch $ - $ -
Dinner $ - $ -
Minibar $ - $ -
Other $ - $ -
Total $ - $ -
Total Amount to be Adjusted (GST incl): $ -
Decrease/ Increase room revenue $ -

Decrease/ Increase F&B revenue $ -
Decrease/ Increase other revenue $ -
EXPLAIN WHY THE INVOICE WAS INCORRECT (ATTACH SUPPORTING DOCUMENTS):
AUTHORISED BY (select relevant Manager):

Reservations Manager: date:
Director of Sales: date:
F&B Manager: date:
PROCESSED BY: DATE:
FRONT OFFICE HOUSE ACCOUNT:
** GIVE A COPY TO NIGHT AUDIT FOR DAILY ADJUSTMENTS RECONCILIATION **
Page 38 of 48
FIN-03-09
Subject: Control of receipts in a foreign currency Page: 1 of 2
OBJECTIVE
To ensure the correctness and approval of any gain/loss on exchange for all transactions paid in
foreign currency.
POLICY
1. For payments received in any currency other than local currency, a detailed reconciliation
must be prepared and controlled.
2. The Credit Manager or Financial Controller must ensure that the gain/loss on exchange
rate account is not used to partially or fully offset any debtors’ accounts in case of short
payments and/or disputed amounts.
PROCEDURE
1. Hotels working with international companies and Travel Agents with head offices located
abroad can issue A/R invoices and receive debtor’s payments in currencies other than the
hotel local currency. The hotel can maintain several bank accounts in different currencies,
allowing debtors to pay in dual currencies (local country currency and “hard currency” –
usually US$).
2. For a hotel allowing payment in dual currencies, the equivalent total invoice amount in the
second currency must be stated on the issued A/R invoice, using the exchange rate of the
day of issuing the invoice.
3. For all payments initiated in a currency other than the hotel bookkeeping currency, the total
amount received must formally be reconciled with the total due as per the original invoice,
and the gain/loss on exchange rate calculated accordingly.
Two possible scenarios in terms of payments can be faced:
- Payment is received in one of the currencies stated on the invoice: the gain or loss is
calculated by a direct reading between the amount due and the amount paid.
- Payment is received in a different currency than that stated on the A/R invoice: a
reconciliation is needed to ensure that the amount due has been paid in full before the
calculation of any foreign exchange gain/loss.
4. For any payment received in a currency other than local currency, a reconciliation voucher
should be prepared by Accounts Receivable to justify the correctness of the payment
received and subsequent posting, stating:
- (a)Total due as per the A/R invoice in local currency
- (b)Total transfer amount – the amount paid by the debtor and the currency
- (c) Exchange rate – the exchange rate of the day that the payment was received
- (d) Local currency Equivalent amount (d = b x c)
- Variance (d – a)
The variance will be the foreign currency gain or loss and should be posted as such
in either the PMS or general ledger depending on the hotel.
Page 39 of 48
FIN-03-09
Subject: Control of receipts in a foreign currency Page: 2 of 2
5. The reconciliation voucher must be approved and signed by the Credit Manager before
posting the payment received into the system.
6. The Financial Controller is responsible to ensure the procedure is followed and to perform
regular spot checks.
Page 40 of 48
FIN-03-10
Subject: Doubtful Debt Policy Page: 1 of 3
OBJECTIVE
To ensure the provisions for doubtful debts are made on a timely basis.
POLICY
1. Overdue debts must be identified and provided for as the risk of non payment increases. A
sufficient provision should be provided to cover all anticipated uncollectible accounts and
should not be calculated simply as a percentage of sales.
2. Bad debts should be written off to the profit and loss (Bad Debt expenses) when all
possible recovery actions have been exhausted and after formal approval is received from
the Owner’s Representative and/ or Corporate Office. The provision account should then
be recalculated.
PROCEDURE
1. The provision for doubtful debts must be formally reviewed (during the credit meeting) and
adjusted every month.
2. When a doubtful debtor account has been identified, a provision should immediately be
made. The provision must be approved by the Financial Controller and the General
Manager.
3. At month end any debt older than 90 days must be provisioned in full, unless the General
Manager is certain that payment will be received prior to the next month end. In this case
the exception for provisioning must be documented and authorised by the General
Manager and kept on file.
4. At year end, the provision should be reviewed in detail to ensure that it includes only those
debts considered uncollectable.
5. The Financial Controller must request authorization to write-off the bad debt from the
General Manager, the Owners Representative and/ or Corporate Office, after examining
evidence that all appropriate actions have been taken and the possibility to recover the
debt is non-existent.
6. A listing of all bad debts written off must be maintained by the Financial Controller, allowing
for a historical review of amounts written off by the hotel. If any payment is received after
being written-off from accounts receivable, then they are recorded as a recovery of bad
debt (credit to income statement).
Page 41 of 48
FIN-03-10
7. With regard to “walk out” guest invoices:

- An invoice must be raised and the amount kept in a debtor account (ie the hotel
must not write back against revenue).
- If the invoice has not been paid after 30 days, then a 100% provision should be
raised.
- After a maximum period of 90 days, the debt should be written off to the bad debt
account.
Page 42 of 48
FIN-03-10
APPLICATION TO WRITE OFF BAD/ DOUBTFUL DEBT
PART I: To be completed by Hotel Financial Controller:
Debtor’s Name:
Debtor’s Address:
Date of Debt:
Amount of Claim:
Sequence of events (in date order):

-
-
Measures taken to try and recover Debt:
-
-
Main reason for debt to be written off (conclude to the overall reason why the debt is unrecoverable):
-
-
Additional comments:
-
-
Hotel’s Name (debt held at):
Financial Controller name & signature:
General Manager name & signature:
PART II: Response to be completed by Owner and/or Accor Regional Head Office - Finance:
Insufficient information supplied, please resubmit with poof of debt, copies of correspondence sent, third
party documentation, etc.
You may not write off the bad / doubtful debt, as not enough attempt has been made to recover it.
You may not write off the bad / doubtful debt, as the debt does not qualify.
You may write off the bad / doubtful debt by taking it up against the ‘provision for doubtful debt.
Owner’s signature and date:
*** Above $1,000 signature from Accor Regional Head Office – Finance is required ***
Accor Regional Head Office – Finance:
Page 43 of 48
FIN-03-11
Subject: Advance deposit policy Page: 1 of 1
OBJECTIVE
To ensure that all advance deposits received for future events or accommodation are properly
accounted for.
POLICY
1. Advance deposits received from customers must be carried in the Deposit ledger in
separate accounts.
2. At month-end, the net total of these customer accounts is reflected in the liability area of
the Balance Sheet.
PROCEDURE
1. Advance Deposits should be posted through the Front Office system and recorded in the
Deposit ledger in individual customer accounts.
2. A system generated report must be printed at least monthly and should include the
following information:
- Date of the receipt of deposit
- Name of the guest/company
- Date of the event for which the deposit has been paid
- Original amount received and current balance held
3. The Credit Manager is responsible for ensuring that all deposits received are promptly
entered into the PMS (including payments made by cash, cheque, EFT and credit card).
4. Any past the due date deposits (i.e. deposit received for past events), must be analysed to
determine if the deposit needs to be refunded or forfeited by the client. The Credit Manager
must recommend the action to be taken to the Financial Controller and the amount either
refunded or cleared as “Other Revenue”. These balances must not remain in the advance
deposit ledger but coded to Other Creditors if they are to be refunded.
5. The Financial Controller must ensure the sub-ledger and the General Ledger accounts are
reconciled before the close of each month end.
Page 44 of 48
FIN-03-12
Subject: Credit card payment process Page: 1 of 3
OBJECTIVE
To ensure that credit card sub-ledger is properly maintained and that all outstanding amounts are
properly followed up.
POLICY
1. For each credit card accepted in the hotel, an agreement must be signed with the issuing
companies or their bank representatives. The agreement must clearly state the
commission rate applied and the Financial Controller must ensure that the commission rate
is the same as the Group negotiated rate.
2. All credit card transactions must be authorized by calling in the card numbers or swiping
through authorized hardware and accompanied by a credit card receipt.
3. The credit card balances must be formally reconciled on a daily basis with the nature and
age of all pending items clearly stated.
4. The Financial Controller and General Manager are responsible for the review and approval
of all reconciliations at month end.
PROCEDURE
I- Credit card payment process
1. At the end of the cashier shift, all individual credit card transactions processed through
each credit card terminal are collected into a “batch” of transactions. The batch is closed
and the result is transmitted to the credit card company as a single “batch”. Settlement of
each daily “batch” by the credit card company varies but usually occurs in 2-3 days after a
batch is closed.
2. On a daily basis, Accounts Receivable prints out a summary of credit card transactions
from the PMS as well as settlement reports from the credit card terminals. These reports
are formally reconciled with the supporting credit card receipts and filed, waiting for the
payment from the related credit card companies.
3. When receiving the payment from the credit card company, the commission will already
been deducted from the total payment received. Accounts Receivable must check the
remittance advice for the correctness of the commission deducted, as per the agreement
signed.
Accounts Receivable will then settle the payment and record the commission charged.
II- Chargeback and disputed transactions
1. A chargeback occurs when a customer disputes a charge that appears on their monthly
credit card statement.
Page 45 of 48
FIN-03-12
2. The merchant is notified typically through the mail via a chargeback notice from the credit
card company. The notice provides the details of the transaction, a copy of the dispute
description signed by the customer and instructions on how to proceed. The options
include:
- Do nothing: if you agree with the dispute then nothing else is required. The credit card
company will deduct the amount of the charge from the designated bank account.
- Justify the charge: The Credit Manager will need to write a letter to the credit card
company explaining the situation and the reasons why the charge is valid and will need
to provide documentation to support the charge (copy of credit card receipt, proof of
guest stay, etc.).
3. The Credit Manager is responsible for justifying the charge and a credit card dispute file
must be kept current.
III- Monthly credit card reconciliations
1. A thorough reconciliation of the credit card transactions is necessary to justify the monthly
balance shown in the credit card accounts within the city ledger.
2. For each account, the credit card reconciliation is prepared on a daily basis by Accounts
Receivables. It compares, day by day, the total credit card transactions processed by the
hotel with the payments received from the credit card companies and the commissions
charged.
3. On a monthly basis, the Financial Controller must carefully review and authorize all credit
card reconciliations to ensure that:
- the nature and age of all pending items are clearly recognized
- the allocation of payments has been done correctly
- the commissions posted are accurate
- for any items over 30-days a detailed analysis is maintained, stating the credit card slip
number, guest folio reference and all actions taken in regard to recovery. In particular,
formal inquiry letter signed by the Credit Manager should be sent to the credit card
company and/or the bank.
4. All credit card reconciliations once finalized, must be submitted to the General Manager for
his verification and signature.
Page 46 of 48
FIN-03-12
5. Example of credit card reconciliation (a different form must be used for each credit card
accepted)
CREDIT CARD LEDGER (AMEX)

(MONTH)
Transfer from Commission Closing Credit

Opening City ledger Payment Allowance Sub Total Payment Made Remark
Guest ledger Charged Card Balance
1 - - - -
2 - - - -
3 - - - -
4 - - - -
5 - - - -
6 - - - -
7 - - - -
8 - - - -
9 - - - -
10 - - - -
11 - - - -
12 - - - -
13 - - - -
14 - - - -
15 - - - -
16 - - - -
17 - - - -
18 - - - -
19 - - - -
20 - - - -
21 - - - -
22 - - - -
23 - - - -
24 - - - -
25 - - - -
26 - - - -
27 - - - -
28 - - - -
29 - - - -
30 - - - -
31 - - -
T/L - - - - - - - -
IV- Security precautions:
1. Guest credit card details should be encoded in the PMS. Only authorized employees
should be able to view guests’ full credit card details.
2. Credit card numbers should be truncated on all pre-authorizations and credit card receipts.
3. Pre-authorizations and credit card receipts must be kept in a secured place with restricted
access. When the archiving period required by the local regulation has passed the receipts
must be destroyed.
4. The use of manual credit card machines (or zip-zap) must be exceptional. The access to
such machines and manual credit card slips must be restricted.
Page 47 of 48
FIN-03-13
Subject: Sundry Debtors Page: 1 of 1
OBJECTIVE
To establish an acceptable and uniform practice for the recording and collection of Sundry Debtor
amounts.
POLICY
1. All Sundry Debtors invoices must be recorded in the City Ledger module of the PMS
system, using a PM account in the guest ledger.
2. All Sundry Debtor invoices must be formally authorized by the Financial Controller.
PROCEDURE
1. The approval is forwarded from the Financial Controller to Accounts Receivable who will
post it through the PMS using a department code which maps to a clearing account in the
General Ledger.
2. The Sundry invoices are then reconciled on a monthly basis and normal collection
procedures must apply.
3. Sundry Debtors are often used for:

- monthly recharges between Accor hotels where staff members are shared between
hotels.
- external leases (ie lobby shop, spa or restaurant leased out).
Page 48 of 48

Chapter 3 Accounts Receivable May 2010

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Updated: May 2010 HOTEL ACCOUNTING & OPERATION MANUAL Index Nº: FIN-03

POLICIES & PROCEDURES

CREDIT / ACCOUNTS RECEIVABLE

Subject: Credit / Accounts Receivable - Index Page: 1 of 1

Index nº Contents Pages

FIN-03-01 Accounts Receivable functions 2-4

Subject: Accounts Receivable functions Page: 1 of 3

II Accounts Receivable management

It is essential that there is no “hold-all” account maintained in the city ledger.

Subject: Accounts Receivable functions Page: 2 of 3

III Payment control

a. Credit card payment

b. City ledger payment

IV Maintaining Debtor information

Subject: Accounts Receivable functions Page: 3 of 3

Subject: Credit Policy Page: 1 of 11

I- Credit Application procedure

Detailed results of the enquiries must be attached to the credit application.

Subject: Credit Policy Page: 2 of 11

7. In the case of government accounts, there is no need for a credit application to be

II- Credit application maintenance

Subject: Credit Policy Page: 3 of 11

III- Form samples

- Credit application form - Asia

Subject: Credit Policy Page: 4 of 11

CREDIT APPLICATION FORM - ASIA

Name of Company or Firm: Nature of Business:

Address: Phone Number:

Type of Company : PRIVATE / PUBLIC LTD / SOLE PROPRIETOR / PARTNERSHIP

PARTICULARS OF PERSONS AUTHORIZED TO MAKE HOTEL ARRANGEMENTS, ISSUE INSTRUCTIONS AND

Company’s Bankers : Account No :

Bank Address : Registrar of Company (ROC) No :

Name of Hotel: Address:

Subject: Credit Policy Page: 5 of 11

CREDIT FACILITIES – TERMS AND CONDITIONS

SIGNATURE & COMPANY STAMP :

* Please attach a copy of your passport or identity card for verification.

CONTACT PERSON RESPONSIBLE FOR THE PAYMENT

E-mail Address : Signature :

OPERATION MANAGER / handling agent

E-mail Address : Signature :

Subject: Credit Policy Page: 6 of 11

CREDIT AUTHORISATION APPROVAL FORM

Name of Company or Firm:

Recommended by: (Name & signature) Position:

Remarks (if any):

Verified by: (Name & signature) Position: Credit Manager

Credit Limit Granted:

Director of Sales : Approved / Disapproved

Financial Controller: Approved / Disapproved

General Manager: Approved / Disapproved

Subject: Credit Policy Page: 7 of 11

CREDIT APPLICATION FORM – PACIFIC

Trading Name………………………………………………………. Registered Office (if company): ……………………….

Principal Place of Business:………………………………………. 2) ……………………………… Ph……………………….

Phone No: …………………………………………………………... 3)………………………………. Ph:………………………

A.C.N. or A.B.Number :….………………………………………… 1)…………………………………………………………….

Business Activity:…………………………………………………… ………………………………………Ph:…………………

Type of Business: Sole Trader / Partnership / Company 2)……………………………………………………………