SOP - How to handle cash advance

OP Number: FO- 12 ( SOP serial number and department code )

Department: Front Office - General
Date Issued: DATE THE DOCUMENT WAS CREATED
Time to Train: 30 Minutes
Introduction:
Will you be ready to pay someone in advance when you have not availed the facility or
service and what will you expect if you pay advance money to someone? must ensure
that guest has a good experience as far as billing is concern.
It is an important procedure at the front desk and it is our duty that any guest making
any monitory transaction should get the receipt and the transaction is handled
professional way.
1) Cross check the name & room no.
“ May I confirm that’s Mr. David Bochum #498”
2) Count the cash.
Count each note properly. There is possibility that two/ three notes are stuck together.
Be careful as it is guest money what you are dealing with.
3) Recount the cash again.
Recount the cash to be sure that that you have counted it right.
4) Make entry on system.
Open the cashiering screen on the PMS and post this cash advance against the
correct reservation.
5) Handover the receipt. Bid farewell.
Print and Neatly fold the receipt, put it in a envelope. Wish the guest as applicable. E.g.
“Have a pleasant stay/evening”
Training Summary questions:
Q1. How do I cross check the name & room no of the guest?
Q2. What care should be taken while counting the cash?
Q3. Why do I recount the cash?
Q4. How to print a receipt?
Q5. How to close the conversation with the guest?

Night Audit / End of Day process in Hotels

The Front office Audit is usually referred as Night Audit because hotels generally
perform it during the late evening hours. Before the implementation of automated front
office systems, The most convenient time to perform the audit was during the late
evening and early morning hours, This helps the front office personal to work with
minimal interruption and also most of the hotel outlets and revenue centres are closed
during this time.
The audit is a daily review of guest account transactions recorded against revenue
centre transactions. The routine helps guarantee the accuracy, reliability and
thoroughness of front office accounting.
Night audit is generally comprised with the below functions:
Shift Commencement:
 Taking the shift handover from the evening shift.
 Counting and tallying the cash float.
 Printing essential Shift reports.
 Opening the Night audit Cashier.
 Reading the Log book and also listing down any pending tasks / follow ups from
the evening shifts.
 Look for any uncleared traces for the day and take necessary actions.
Balance Food And Beverage outlets:
 The Outlets will close their day, hand over the Check copy and drop the cash
collection at front desk.
 Print the Outlet wise sale report from the Front office software ( PMS) and tally /
balance the revenues with similar report from the Point of Sale ( POS ) software.
This will ensure that all revenues generated at the POS has been captured by
the PMS.
 If there is any missing checks then the same has to be posted manually, Like
wise any duplicate postings has to be voided.
 Tally the cash posting in PMS and print the cash receipt for the dropping done by
restaurant team.
 Check if there is any Tips for the restaurant staff on credit card, Handover the
same after making the corresponding paidout entry on the system.
  Once all restaurants had dropped their cash check out the Payment Master room
( PM ) for Cash, Credit Card and City Ledger. ( Eg: 9001, 9010, 9015 etc.)
 Check the lost posting PM to see if there is any lost interface posting lying on
the folio.
 Check-out the Lost posting PM room after taking any corrective / allowance.
Audit and keep things ready for the End of Day:
 Keep the duplicate copy of restaurant checks sorted according to the floor
number / Room number and place them on to the respective rooms folders /
slots.
 Print the Payment made today by all Method of Payments ( Cash, Credit
card, Bill to Company etc. ) and tally the same with corresponding payment for
the day.
 Take out all Invoice generated for the day and Tick mark net to the amount on
the 'Payment report' for the day to indicate that payment type and the amount
appearing on the folio is matching with the amount and type on the report.
 Reconcile all Bill to company settlement for the day and make sure that the
corresponding billing letter and copy of the restaurant checks are attached to the
same.
Print Reports for all interfaces from PMS:
 Posting report for Telephone postings.
 Posting report for Internet postings.
 Posting report for In Room Movie rentals.
 Refer the server report for all the above interfaces and tally the revenue with
those posted on the PMS.
 Circle the last transaction to verify and also to ensure that the last charges has
posted in the evening and not stopped sometime during the day.
 Reconcile all posting these must balance guest accounts.
 Sign all the posting reports.
Log all Vacant Rooms, resolve room status and discrepancies.
Count the Key's in the slot ( For hotels using Manual Metal keys )
Check the Rate check report / Rate variance report:
 Make sure that the correct room rate is entered on to the reservations.
 Any Zero rate rooms to be investigated and identified for Sharer,
Complementary, House user or PM rooms.
  Investigate all Rate discrepancy.
 Check for correct assignment for Market and source segments to the reservation.
 Verify all correct by ticking or highlighting both the rate and the reservation /
billing instructions.
 Sign off on the report once completed.
Balance Credit Cards:
 Print the 'Payment report only Credit Card' report from PMS.
 Perform the Batch closing on all EDC / CCD machines.
 Compare the settlements on the Batch close report with the 'Credit Card' report
printed from PMS.
 Place a tick next to the amount of the report to indicate that paperwork is in order
and complete.
 Do this for ALL payments made today. All paperwork must be filed in order of the
report.
 Please ensure the end of day credit card terminal docket says settlement
successful.
 Complete the Credit Card Reconciliation Form.
 Both PMS and credit card MUST balance to each other.
 Complete settlement on all the credit card terminals – after midnight
Check Pending Arrivals:
 Check all pending arrivals left.
 Show check in for those rooms which has been prepaid or has a guaranteed
payment form agent or Company.
 All non arrivals that have not been prepaid need to be processed as a no
show during EOD.
Check Pending departures:
 Review pending departures.
 If there are any departures left cross check the same with the bell boy errand
card for departures to make sure that the room has departed. And show check
out for the same on the system.
Balance Cash:
 Retrieve the Payments as at now sorted by MOP printed earlier
 Verify all cash drops
  Balance any paid outs from same or previous days
 Prepare deposit slip and express banking bag for net cash and cheques
Cash Register closure:
 Cash Register / Cash register closure. You must ensure all cash registers are
closed (the only way to do this is to ensure you have all the cash register closure
reports).
 You must ensure that there are no outstanding departures/arrivals
(including group masters).
 Print Shift Reports before closure.
 Ensure that all postings are accounted for.
 Close Cash Register.
 Sign on the report printed while closing cash register.
Pre End Of Day Final Check:
 ALL Cash registers are CLOSED (reopen and close all registers to ensure they
are closed)
 There are NO departures still to depart.
 There are NO non-guaranteed arrivals still to arrive (including group masters).
 Check if there is a printer connected with enough paper loaded on to the
computer you are running the EOD on.
 Log out all computers except the one on which the EOD will be performed.
 Inform all outlets to not to settle any checks till the time the EOD is completed.
Start End of Day / Night Audit Process on the Front office software.

After EOD Process is completed:

 Print Newspapers Report and complete daily newspaper order form.

 Hand over the Newspaper report to the Bell Desk team.

 Report set to be printed for General Manager and all HOD's.
 Re check-in all PM rooms for the POS postings ( Cash, Credit Card, City Ledger,
Lost posting )

SOPS / ACCOUNTING / CASH HANDLING PROCEDURES FORM DAILY PMS

DEPOSITS & DEPOSIT SLIPS

Deposits slips are prepared after cash envelopes from the front desk are opened and
balanced to the daily deposit report.

1. Daily audit packs and drop envelopes are pulled from the property on every
business day morning witnessed by another person. Audit packs are in a
designated place and the deposit envelopes are located in the safe. With a
witness present, envelopes are pulled from the safe and matched to the daily
deposit log at the property to assure all envelopes are accounted for. If an
envelope is missing, check to see if it is stuck in the turn bin, verify it was
witnessed when dropped, and have your witness sign the envelope is not
present. Envelopes are put in the audit envelope and brought back to accounting
for opening and verification.
2. Change orders from managers will be written on the form under “other deposits”.
After verifying the funds in the envelope against the total, put those envelopes
aside, as this money will not go to the bank. Any checks or Travelers checks will
need to be changed out with bills later, since they must be deposited.
3. Open all envelopes and verify the money contents against the amount listed on
the daily drop log. Any shortage or large overage discrepancies should be
verified by a third person. Pull out any paid out forms from the drop envelopes
(i.e. refund for laundry or soda). Verify the purpose, amount and hotel is noted on
the form. Monies from these items will be pulled from the petty cash fund in the
accounting office. Pull any due back forms (negative drops) and put the
appropriate monies back in the drop envelope. Staple the “due back” form to the
outside of the envelope and put in the safe for the front desk clerk or server to
claim.
4. Changes to the clerk’s totals should be marked thru and the correct amount
written in pen, and shortage should be signed by a second person and the
envelope attached. Shortages over $10.00 must be notified to the controller.
Frequency errors should be communicated to the department for the appropriate
consulting.
5. Change out the daily drop monies in to the largest bills, minimizing the coins and
small denomination to be taken to the bank.
6. Add the totals of both columns and verify they agree to the PMS cash reading
total. Any corrections should be made in pen. Add any miscellaneous receipts to
the bottom of the daily deposit log, under “Other Deposits” and total the page.
Totals for both properties deposit log should agree to the deposit slip.
7. Deposit slip should balance to the prior day’s work. If reconciliation can’t be done
that day, take the money to the bank anyways before 2:00 pm. DO NOT HOLD
THE MONEY. Friday, Saturday and Sunday should be combined on one deposit
slip to minimize bank fees. And both hotels on one deposit slip. If the end of the
month falls on a weekend or holiday, a separate slip should be prepared to
reconcile each period.
8. The date on the deposit slip should be the day it is deposited, not the day of the
work. Deposit slip should be in duplicate form, with the company keeping the
copy in the deposit book
9. Checks should be listed by company name, not the check number using only one
line. Travelers checks should be combined together by denomination and listed
 on one line together (i.e. “TC $50 X 3” as the description and $150.00 listed in
the amount column). Use what information may be helpful in tracing back a
deposit if there is a discrepancy.
10. Deposits must be made daily when the bank is open and before the 2:00 pm
cutoff time for posting. Company personnel taking the deposit should park close
to the building and go directly to the bank. Time leaving should vary not to create
a noticeable pattern and be discreet about making the bank deposit.
11. If a bank correction or NSF is received, the controller must be notified
immediately and initialed. Notices received in the mail should go directly to the
controller.
12. After the deposit book is completed, a new book is started and the completed
book is given to the controller for record keeping. Once you get down to one
book, an order should be placed with the bank.

Floor Limit or High Balance Guest in hotels

A high balance report is made on a daily basis after the completion of the Night audit /
End of day process which states all the guest accounts whose totals are near to or in
excess of the credit limit of the hotel.
The Floor limit ( the maximum credit limit) given to different types of guest will be set by
the hotel management.
 Any guests who had exceeded this floor limit is captured on the report 'High
Balance Guest'.
 It is the responsibility of the Night Auditor / Night Manager to prepare this report
every night after day closing.
 The report should list every room folio which is having a balance more than the
hotels standard floor limit (Eg: All guests who is having a balance more than
$500 for individual / FIT guest).
 Based on this list the night auditor or front desk agent responsible for night shift
prepares a letter and also print and attach the folio. This set is send to the front
office manager for his review.
 The Front Office Manager will assume responsibility for these accounts for
required follow-up action. All room accounts listed must be thoroughly checked
for method of payment and booking correspondence.
 The Front office manager will then sign the letter and send a copy of the guest
room requesting him to make a partial settlement or make a deposit in
the reception so that they can extend the credit facilities to the guest.
 If an approved credit card voucher or pre-authorization is already taken and
the charges do not exceed the current balance plus the remaining number of
nights room and tax, then no further action is necessary. When a reservation folio
exceeds this amount, the card authorization center must be contacted and a new
pre-authorization to be taken.
 Determine the average daily charges incurred by the guest and the number of
days remaining until scheduled checkout. This amount, plus the current balance
 on the room folio must be authorized through the credit card. The authorization
code and amount is then entered on to the appropriate field on property
management system (PMS).
 For Reservation which are to be billed to company account or bills to Travel
agent have to been approved for credit by the accounts department.
 In the case for any clarification regarding current credit limit or validity of a AR
( Accounts receivables) billing, then the same to be reconfirmed with the
accounts/credit department.
 If the above conditions are not met for customers with credit facility, then the
guest must be contacted for immediate payment of the account.
 A detailed report about the action taken on each account listed on high balance
report must be remarked on the same report and a copy of the report must be
forwarded to the General Manager, Finacial Controller, Director of Sales
and Resident Manager.

Types of Rate Codes used in hotels

Hotels always have more than one rate code category for each room type. Room
rates categories generally correspond to types of rooms available to sell in the hotel
( Eg: Suite, Deluxe, Premier, Studio, Penthouse etc. ).
Room Rates and rate codes may also vary according to the available room features
such as room size, location, view, furnishing, décors etc and also with competitors
pricing.
Standard Room Rates and Rate codes used in the hospitality industry:
Rack Rate: Is the Standard rate or Published tariff defined by the hotel management
for a particular room category/type. This is generally printed on the tariff sheet of the
hotel and these details are also submitted to the local government authorities for hotel
licensing and in some countries for Gov. tax compliance. In other word's these rates
are always without any sorts of discounts.
Corporate or Commercial Rate: These are rates offered to companies that provide
frequent business for the hotel or its chain. This rate may vary according to the volume
of business guaranteed by the companies. Eg: NEG1, COR1 etc.
ADHOC Rate Code: These are normally non-standard rates which are offered as
special one-time rates for first time corporate's.
Group Rate: These are rates which are offered to groups, meetings and conventions
using the hotel for their functions.
Promotional Rate Codes: These rates are generally offered during
low occupancy periods to any guest to promote occupancy. Early Bird Rates, Stay for 3
and pay for 1 etc. are some examples. These rates may also include certain add-ons to
attract the customers like free WiFi for 24 Hrs, free buffet dinner etc.
Incentive Rate Code: The Rate offered to individuals who belong to an association or
holders of special membership cards or Credit cards. Eg: Amex / VISA / Master
cardholders get 5% discount on Rack Rate, Lufthansa Frequent Flyer members get a
25% discount etc. For hotels, these rates always give potential referral business.
Early-bird Rate: This type of rates are only open X days before arrival. Eg: Open only
when 7 Days before arrival, 14 Days Before Arrival, 30 Days Before arrival Etc.
Family Rate: A rate reserved for families with children. Usually, these rates
include Extra Bed charges and may also include some free add-on activities for
children.
Package Rate: Rates that includes a guest room in combination with other available
events or activities. ( Eg: Best of London package which includes room rental, all meals,
site seeing, airport transfers etc. ) Package rate can be also a simple room and meal
package like American Plan ( AP), Modified American Plan (MAP), Continental Plan
( CP )etc.
Best Available Rates ( BAR ): These rate codes are the lowest discounted rate
available for a day which can be offered to the guest by the Reservation or Front
desk staff. BAR can be of different types:
'Dynamic BAR' - Has different tiers and each tier will be opened and closed according to
the occupancy of the hotel. ( The new age hotel management software's does this
automatically for the Revenue Managers.)
Sample Dynamic BAR Rate
Open / Close when
BAR Level
Occupancy Between
BAR -01 0% TO 25 %
BAR -02 26 % TO 35 %
BAR - 03 36% TO 50%
BAR - 04 51% TO 75%
BAR - 05 76% TO 100%
'Daily BAR' - Has a pre-defined daily room rate regardless of room categories ( Run of
the house) and occupancy, these rates are set according to the day of the week, as per
the demand of hotel rooms in the city, special day's or seasons, as per the room
demand forecast done by the hotel revenue manager.
Sample Daily BAR Rate
DATE DAY RATE ($)
19/10/2016 WED 200.00
20/10/2016 THU 200.00
21/10/2016 FRI 250.00
22/10/2016 SAT 250.00
23/10/2016 SUN 250.00
24/10/2016 MON 200.00
25/10/2016 TUE 200.00
Complimentary Rate: A Room rate with zero room charge which is offered to special
guests, industry leaders, Gov. officials etc.
House use Rate: A Room rate with zero room charge which is used for rooms stays for
hotel purpose. Eg: Manager or duty room, In-house General / Resident manager room
etc.
Zero Rate Code: This kind of rates are used as system requirements for PMS's as
these would be tagged to Dummy rooms, Paymaster rooms and Group Master rooms.
Virtual Rate / Follow Rates: A Special Type of rate codes whose values are derived
from another rate code or rate group. Eg: BAR1 which is 10% off on the Rack Rate.

Tips for Effectively Upselling Guest Rooms at Front office

1. Upselling to hotel guests while they arrive at the hotel to check-in often holds the
best opportunity to create more revenue for the hotel.
2. A good incentive program for reservations and front office team offered by the
hotel management helps to successfully motivate staff in upselling guest rooms.
3. Always greet each guest with a smile in your voice as well as your face.
4. Always Establish and maintain eye contact with the guest.
5. Ask open-ended questions to understand the guest needs and requirements, and
make timely suggestions and offering alternatives with an upsell.
6. Understand the guest profile from the reservation details and identify those
guests who are most likely to take a higher category room.
7. Bookings generated via corporates or negotiated rates or by in-house sales team
are not likely to take higher category rooms and as their bills are normally paid by
their company.
8. Guests who are in honeymoon, family leisure trip, long stay, online travel
agents (OTA’s), direct bookings, walk-in’s etc. are most most likely to opt for the
upsell offer. This is because in most of the cases the guest who comes to stay at
the hotel is not aware of the different room offering by the hotel
9. Be pleasant and business-like, as you are selling yourself as much as you are
selling the hotel facilities and services.
10. Find out the guests name immediately and use it at least three times during the
conversation.
11. Always use appropriate titles like Mr., Miss when addressing the guest and never
call the guest by his first name, always use the surname with an appropriate title.
12. Attempt to identify the need of the guest since these needs may not have been
identified during the reservation process.
13. Match the guests needs to the rooms furnishing or amenities or view (sea view,
pool view, mountain view) etc.
14. If the guest stays for many nights then he/she would be interested in a larger or
spacious room.
15. If the guest is on a honeymoon then offer them with a room with a view like a sea
facing, pool facing, mountain facing room etc.
16. If the guest has a reservation on a lower category then mention the main
difference and extra features he gets when compared with higher category
rooms.
17. Inform about the additional charge or difference in tariff with encouraging
statements like with a difference of X amount you can get a sea view room.
18. Upsell rooms by pointing out its features and benefits first, then mention the
difference in price.
19. If there are two different room type available then mention the benefits of both
rooms so that guest can choose the best which fits his requirement
20. For walk-in always provide details of a lower category and higher category to
avoid the risk of losing the revenue while trying to up sell to the guest.
21. Always thanks the guest after a successful upsell.