Account Receivable

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Account Receivable

Bài gửi  Admin on Fri Oct 05, 2012 9:05 pm

I OBJECTIVE


All transfers to Accounts Receivable must be well supported and within the terms of signed contracts.

The Credit Manager must receive accurate and timely Accounts Receivable Aging Analyses and must follow-up collection where necessary.

Discounts, allowances and adjustments must be properly authorized before posting.



II PROCEDURES


A) TRANSFERRING TO CITY LEDGER



1. General

The main sources of income of hotels are:

(a) Rooms
(b) Food and beverages
(c) Other Department Sales
(d) Income from Concessions
(e) Rental of shops and Show-cases, etc.
These can be settled by one of the following methods:

(a) Cash
(b) Credit Cards
(c) Authorized credit arrangement with travel agencies and Commercial firms, and occasionally with individuals.
In the hotel accounting system, Guest and City Ledger Accounts are introduced to record these receivable transactions.



2. Guest Ledger Transactions
While guests are in-house, guest’s bills are filed in room number sequence, together with the registration cards and guest folio. The Billing Clerk must verify the signatures on checks against the guest’s registration cards before posting.

On departure, if the guest chooses to settle his account by cash, the folio will be closed off and passes to the Night Auditor. If credit card or other form of credit arrangement is to be used, the folio and supporting checks are passed to Accounts Receivable for posting onto the Accounts Receivable sub-ledger before filing



3. City Ledger Transactions

After verification by the Audit Section, all City Ledger charges are to be passed to the Accounts Receivable Section for further processing onto the individual sub-ledger accounts.

Adjustments or transfers will be done through the Rebate Journal as approved by the GM/Controller.

Soon after the charges are posted to the individual City Ledger accounts and reconciled, copies of Guest checks are filed with each account in alphabetical order. They will be presented to the customers for payment together with the monthly statement.

The remaining copies (audit copy) are filed in date sequence for future reference.

a) Except for transfer to authorized travel agents of amounts covered by coupons, all transfer to the City Ledger represent a special credit privilege and should only be allowed to clients who have approved credit accounts opened in their names.

The Officer authorizing the transfer should sign on the Hotel copy of the guest bill after verification of the name and address of the party to whom the invoice is to be submitted. He must also check for compliance with all other requisites regarding the granting of credit.

No transfer voucher is necessary since the approval and all pertinent data appear clearly on the guest bill.

b) For transfer of amounts between the Guest and City Ledgers, where the bill is not attached to the corresponding City Ledger control folio at the Front Office, a Transfer Voucher will be prepared. This will record the accounts affected, with reason for the transfer, and authorization.

The transfer of reservation deposit upon arrival of a guest is an example of this type.

c) Internal transfers of balances within the City Ledger will be recorded simultaneously in the City Ledger control folio or the City Ledger Transcript.

A transfer voucher be prepared in each case and filed for audit reference



4. Late Charges
Late charges usually occur when the guest has signed for charges immediately before his departure. As a result these will not have been included in their folio when he checks out. These are usually breakfast checks, mini-bar consumptions or telephone charges for which the checks have not been delivered to the Billing Office in time for posting to the folio.

It is the duty of the Hotel Controller to take appropriate measures to lessen such charges. They can be reduced by speeding up the delivery of vouchers between various outlets to the Billing Office and instructing the cashiers on proper check-out procedures.

It is impractical to check with each operated department for charges pending at check-out time as it will delay the guest. Instead, the Front Office cashier should inquire from departing guests whether vouchers have been signed during the preceding hour. This is regarded as the most effective measure to lessen late charges.

Should late charges occur, these will be posted to the Late Charges Receivable Account for action by the Credit Officer.

It is the duty of the Credit Officer to examine and review the collectable of such charges against the guest history, credit status and method of payment.

Any charges considered uncollectible should be recommended by the Credit Manager to be written of, preferably in the same month as the original charge was raised.



5. Discounts and Allowances (Rebate)
These apply to allowances granted to guests for reasons such as disputed local telephone charges, room rate adjustments, adjustment of over-charges and adjustments for unsatisfactory services, etc.

For any credit of this nature, a Rebate Voucher must be prepared in which the room number, name of the guest, amount, department affected and detailed explanation will be entered in the appropriate places.

Rebate Voucher are pre-numbered with a separate series controlled at the Front Desk (for discounts, allowances and adjustments to Guest’s accounts) and another series in the accounting office (for those applicable to City Ledger accounts).

Allowances for rate adjustments must show full details of how the computation was made and why.

Allowance for overcharges and unsatisfactory service must also show a full explanation for the adjustment.

For more detail, please refer to Rebate policy



6. In-house Entertainment Account
Details of the party entertained and the reason should be entered on the check by the officer. These charges will be posted to a specific account in the City Ledger as for normal City Ledger Charges.

At the end of each month, a summary is prepared analyzing individual officers’ entertainment by locations. The total of the entertainment charges is to be reserved from sales.

All entertainment checks covered by the summary are sent to the costing section for calculating the cost and debit to respective department’s entertainment account through the monthly standard journal.



7. Control of the Entertainment Account
At the beginning of the year, an entertainment budget is prepared for individual personnel.

A daily summary of entertainment by individual officers will be prepared by the Accounts Receivable Supervisor and passed to the Controller/General Manager for scrutiny. This will enable management to ensure that the privilege is being exercised properly and will allow for appropriate action to be taken in case of abuse.

An Entertainment Return is prepared monthly and included in the monthly report of the Controller.



B) BILLING AND COLLECTION:



1. Invoice & statement bulling

Invoices and Statements should be prepared and send on the following schedule:
- Bills for Banquets and functions should be mailed not more than three (3) days.

- Hotel credit card holder accounts should be mailed monthly.

- The statement for airline crews should be sent by hand twice a month or monthly as per arrangement with the airlines themselves.

- The statement for companies and agents should be billed as soon as possible after the check-out but should not be more than seven (7) days or as per arrangement with companies or agents themselves.

- For EDC machine system, the charge amount will be sent daily upon closing and the payment will be received as per the contract of credit card company.

- Food and Beverage bills of employees who have authorized to sign should be deducted from salary at the end of each month.



2. Reminder & collection

a. Local companies

After the bills & statement has been sent to a company and no payment has been received within 2 to 3 weeks, the Credit officer should contact the company by telephone in order to collect the payment.

b. Local travel:

The terms of payment for local travel agents are within 15-30 days after receiving our bills & statement. The new agents as the hotel accept the voucher should be requested to settle the statement within fifteen (15) days. If no payment has been paid in due time, the Credit officer should contact the agent by telephone first and should this be unsuccessful, reminders first upon 45 days, second 60 days and last upon 90 days should be sent.

c. Foreign Travels:

The first reminder should be sent after 30-40 days of dispatching the statement. The facsimile or telex should be used after 30 days if no response has beep received and a copy should be furnished to Sunrise Beach Resort Sales Office or Sunrise Beach Resort Controller in that area for future assistance



3. Collection incentive scheme:

- To maintain the hotel’s receivable at the lowest possible level and improve the company’s cash position, and also to minimize the long overdue accounts, the following are the incentive scheme for the collector:

- The Collector must achieve a monthly Collection Efficiency (CE) of not less than eighty per cent (80%) on accounts assigned to him excluding accounts of credit card companies.

- Collection Efficiency is computed as follows:


Total amount collected for the month

CE rate =

Total amount assigned for collection during the month



4. Dunning Procedures:

Accounts which were not paid on their due dates must be monitored by the credit officer with the assistance of Financial Controller. It is the responsibility of the credit officer to remind clients on the payment of their accounts. The following are the different classes of dunning:
- Dunning by mail

Letter of a friendly reminder to follow up billing must be made. Second or third reminder may be sent, however the last reminder should be given personally or sent by a courier or registered mail to keep record of the acknowledgment receipt for the future action

- Dunning by Telephone
Conditions:

1. High valued accounts requiring personal attention.
2. Concern as to accuracy of address.
3. Concern as to existence of debtor.
4. Settlement of disputes in correspondence.
5. High balance account.
6. Request of assistance from Sunrise Beach Resort Hotel.
- Dunning by Fax
Conditions:

1. Foreign account
2. No telephone number
3. Request of assistance from Sunrise Beach Resort hotel
4. To create sense of urgency with debtor
- Dunning by Collection Agency / Legal Advisors
Conditions

1. Hotel’s internal dunning measures have failed
2. Expected recovery is better than costs involved


5. Evaluation, transfer to doubtful account and write off accounts receivable
- Aging of Receivable Accounts is reviewed on a daily basis by the Credit Officer and weekly basic by Financial Controller.
- After several attempts to collect an outstanding debt have failed, the Credit Manager may present the evidence of written communications with the debtor to the General Manager and Controller for approval to transfer the account as a doubtful account. The documents will then be sent to Accounts Receivable who transfers the account to the doubtful account category for legal action to be taken.
- Accounts which are deemed to be in uncollectible are recommended for write-off by Financial Controller on a semi-annual basis.

- A write-off request will be filled out of each account with a justification on why the account is being recommended for write-off. Likewise, monthly list of late charges are summarized quarterly and write-off request form is also prepared for this.

- Upon receipt of the approval request for write off from General Manager and Management Company, the Credit officer will prepare miscellaneous credits to close the receivable account. Files for the account written off must be properly kept by the Credit officer for future reference.


6. Termination of credit

Accounts which are subject for termination are as follows:

· Accounts with commutative balances and are being handled for collection by the Credit Officer.
· Accounts which were turned-over to the Legal advisors.
· Accounts written off
All cancellation / suspension advice shall be sent by the Credit officer to the clients with a demand for the immediate payment of the accounts. All concerned sections will be given a list of cancelled or temporary suspended accounts.

When a credit facility of a company or an individual is stopped or suspended, only the general manager may approve renewal of the credit account.
7. Credit Committee meeting
In accordance with the La Veranda Resort’s Policies and Procedures, monthly credit meeting will be held on an appropriate date by the following:
General Manager

Resident Manager

Financial Controller

Sales and Marketing Director

Rooms Division Manager/ Assistant

Food and Beverage Manager / Assistant

Reservations Manager

Banquet Manager

Credit Officer

Agenda to be taken during the monthly credit meetings:

· To review Aging of Accounts Receivable.
· To determine the clients whose accounts have been long overdue and to know reasons of non settlement.
· To determine who among the clients has problems as far as collection is concerned.
· To take other matters and see whether assistance can be extended by other departments.
Minutes of monthly credit meeting should contain information related to various functional areas including lists of specific problems discussed and corrective action taken. Minutes should be signed by the Financial Controller and distributed to all attendees accordingly. Agenda not taken on previous meetings shall be further discussed on the succeeding scheduled meetings.



Strict adherence to this policy is expected

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