Checkout & Settlement Process (updated on August 18, 2020)

Checkout is the most crucial “Moment
of Truth” in hotel guest cycle.

Welcome to a
new learning
session!
Knowledge is Money.

Check-out and settlement are, part of
the final4th stage of Guest Cycle.
The services and activities of the
departure stage are performed mainly
by Front Office Cashier & Bellboy/
Bell attendant.

• Stay• Departure
• Arrival• Pre-Arrival
1 2
34

The Front Office performs at least 3
important functions during the check-
out and settlement process.
- It resolves outstanding guest account
balances. (Dr. / Cr.)
-It updates room status information.
-It creates Guest History Cards/
Dossier.

Account Balance
General ledger account. In accounting, the account
balance is the current residual balance in an account.
Under this definition, an account is the record, in a
system of accounting, in which a business records
debits and credits, as evidence of accounting
transactions.
Thus, if the sum total of all debits in an asset account is
$1,000 and the sum total of all credits in the same
account is $200, then the account balance is $800
($1,000- $200= $800).
An account balance can be found for any type of account,
such as a revenue, expense, asset, liability, or equity
account.

Types of Accounting System
Manual- Procedure done with pen &
paper & manpower.
Semi-Automatic- a computer &
electro-mechanical devices like cash
register.
Automatic- computers networked
through LANWANMAN.

Comparing Manual & Automated
System Effectiveness
Manual System
• Excessive work load
• Each section did only
specific work
• No chance of learning the
work in other sections
• Scheduling of staff was a
constant headache
• Guest may have to wait for
a particular staff to be free
Automated System
• Lesser work load
• All sections can handle any
type of tasks
• Cross-training of employees
possible and desirable
• Cross-trained staff permits
flexibility in scheduling
• Guest requests can be
handled by any staff

What happens during checkout?
• The guest reviews account, settles it, gets a
signed receipt of a copy of the bill and submits
the room key.
• Any unpleasantness during checkout will make
the guest forget all our previous niceness.
• Any haste on cashier’s part may lead to
financial losses and security lapses.

Billing disputes at checkout may result
in legal issues.

How best to avoid glitches during
checkout
• Confirm mode of payment & stay duration
upon arrival
• Get pre-authorization for credit card and
check validity
• Explain the check in-checkout time policy
clearly
• Inform about late check-out fee policy, if any

Non-Automated Front Office Systems
 Handwritten forms
 Reservation index cards
 Density board showing blocked (reserved) rooms
 Registration cards
 Time stamp
 Room rack- housekeeping status of each room
 Vouchers received from point-of-sale areas
 Charges handwritten to folios
 Adding machine tape attached at check-out
 Night audit cross-checks folio charges to voucher and,
verify settlement

Semi-Automated Front Office Systems
 Handwritten and machine-produced forms
 National reservation network
 Pre-registration activities
 Density board blocked reserved rooms
 Registration cards -preprinted and multiple copies
 Room rack -housekeeping status of each room
 Vouchers received from point-of-sale areas
 Posting machines record charges to guest folios
 Night audit cross-checks folio charges to vouchers
and verifies settlement

Fully Automated Systems
 Equipped with a software package (PMS)
 Online credit authorization terminals
 Electronic guest folios
 Electronically posted guest accounts
 Process continuous trial balance
 Automatically produce bills
 Create guest history records

Self checkout facilities at fully
automated hotels

What is trial balance in simple words?
• A trial balance is a bookkeeping worksheet in
which the balance of all ledgers are compiled
into debit and credit account column totals,
that are equal. A company prepares a trial
balance periodically, usually at the end of
every reporting period, to confirm the
accuracy of accounts.

Check-Out: Manual System
Here, the challenge is to ensure that all
charges, from all revenue departments,
reaches FO before guest leaves the hotel.
Timely communication, prompt response
and accurate up-dating of necessary
documents (checks, vouchers) is the key
to an efficient check-out process.

Manual Check-Out: Steps
1. Check-Out Request received from guest.
2. Bell Boy sent to room for luggage & room
check.
3. Departure Errand Card filled by Bell Boy.
4. Departure Notification Slip sent to all P-O-S.
5. Last minute expenses of guest added to their
account.
6. Guest comes down, surrenders room key and
verifies accuracy of bill.
7. Final bill is paid (settled) by the guest.

Manual Check-Out: Steps
8. Luggage-Out Pass (No Dues Pending) issued to
permit guest to leave the hotel.
9. Marketing activity is done including future
booking.
10.All departments, especially HK & P-O-S, are
informed about the guest departure, to update
room status.
11.Room Rack is up-dated to on-change (vacant,
not ready) status immediately, and
communicated to HK for timely resale of room.
12.ArrivalDeparture register is up-dated.
13.Guest History Card is created and stored for
future use.

Guest History Card
• Helps the hotel in offering personalized
service during next visits.
• Allows for strategic marking campaigns
according to the guest travel and buying
pattern.

Guest Feedback Form
• The cashier is expected to inquire from the guest
about quality of stay, services, facilities and staff
behaviour.
• A feedback form may not be the best thing to fill
when people are anxiously waiting to checkout
and catch a flight.
• Either placing the form in the room one day
before or, sending an e-mail/Google forms type
of questionnaire after departure may get
responses.
• Feedback helps pinpoint success and failure;
individual and collective.

HOTEL IHM
Departure Errand Card
Reception Cashier Information Departure date
& time
Room no.
Bell boy name: Call time:
Name of the guest: Room no.:
Articles Count
Suitcase Hand bag package briefcase Overcoat
others
Baggage brought down by Baggage loaded by
signature signature

Hotel IHM
Departure Notification Slip
Department (Point-of-Sale):………………………
Reception:…………………
This is to inform you that the following guest is departing from the hotel. Kindly rush
the credit charges to the front desk.
Name of the guest:………………….
Room no..…………………………..
Date of departure:…………………..
Time:……..………………….
Authorized signatory

HOTEL IHM
Luggage out pass
No. 0024500786
Name of the Guest:…………………………………….. Room
no.:…………………………
Date of departure:……………….........
Time:……………………….
Bill no.:…………………………….
Billing settlement
Complete Partial Corporate Settlement
other…………………………………
…………………………………………………………………………………………………………………………………
……………….
Authorized signatory Date

Hotel IHM
Guest Folio
Name of the guest : Mr. Aditya Roy Kapoor
Date of arrival: 25 April 2018
Date of departure: 26 April 2018
Number of Pax: one
Room no.: 210
Rate: Rs 5,000
Folio no.: 21786
Date Item Description Debit Credit
25/04/2011 1 Cash 6,500
25/04/2011 2 Room 5,000
25/04/2011 3 Dinner 500
25/04/2011 4 Gazal bar 800
25/04/2011 5 Breakfast 300
25/04/2011 6 cash 100
Amount to be settled by the guest: Nil

Departure Procedure: Automatic
Automated systems have computers in all
departments, all computers are connected
to each other, and data flows between all
computers with the click of a button.
Because of automatic transfer of data, this
system is faster, accurate and efficient.

Check-Out Steps: Automatic System
1. Check-Out request received.
2. Bell Boy to transfer luggage and inspect room.
3. Departure communicated to all P-O-S through
electronic room status board, tele-writer, or
network.
4. Credit transactions up-dated to guest account
automatically.
5. Final bill, with supporting documents presented to
guest for approval and signature.
6. Ask for room keys and inquire about safety lockers
and in-room safe.

Check-Out Steps: Automatic System
7. Payment received as per the pre-agreed or a new
mode.
8. Luggage-Out Pass issued.
9. Departure communicated to all departments.
10.Front Office records are automatically up-dated:
Occupancy List of in-house guests
Room status
GHC

Important
• Do not ask VIP guests for settlement.
• Corporate guests with direct billing facility will
also not be asked for payments. Signature
must be obtained, though. What if the
company refuses payment!?

HOTEL IHM
Guest History Card (GHC)
Sl. no. 000786
Name:………………………………………………
Company:…………………………………………
Designation:…………………………………….
Address:..………………………………………..
Credit:……………………………………………..
Date of Birth:..………………………………….
Marriage Anniversary:…………………….
S. No. Arrived Room Rate Departed Amount Special
Instructions
Remarks
1.
2.
3.
4.
5.

Storing Guest History
• Guest folios (accounts) are stored numerically.
• Guest registration cards are stored
alphabetically, last name first.
• Some resorts may collect additional personal
data like birthdays in the family, anniversary
and favourites in a separate form.
• Some kind of clubs may also be made for
frequent visitors, whose accounts are credited
with redeemable points for each visit.

Room Status Terms
 Check-in
 Occupied
 Complimentary
 VIP
 Stay-over
 On-change
 Do-not-disturb
 Sleep-out
 Skipper
 Sleeper
 Vacant and ready
 Out-of-order
 Lock-out
 Did-Not-Check-Out
 Due out
 Check-out
 Late check-out
 Out of service

Room Status Terms (Brief Explanations)
 Check-in (today’s
arrival)
 Occupied (guest staying
in the room)
 Complimentary (free)
 VIP (very important
person)
 Stay-over (guest will
stay one more day
 Vacant and ready
 Out-of-order (major
problem in the room)
 Lock-out (guest luggage
has been locked inside
and room key code has
been changed. Often,
for non-payment of
dues.)
 Did-Not-Check-Out
 Due out (will depart
today, expected
departure)

Room Status Terms (Brief Explanations)
 On-change (guest
departed, room being
readied for new arrival)
 Do-not-disturb (no
knocking on the door of
this room and no phone
calls)
 Sleep-out (guest did not
use the bed at night and
slept outside of the
room or hotel)
 Skipper (departs,
without clearing dues,
deliberately)
 Sleeper (a room that
was not updated on
checkout and continued
to be treated as
occupied. Results in loss
of income for business)
 Check-out (guest has
left or will leave)
 Late check-out (guest
does not vacate the
room even after
standard checkout
time)
 Out of service (minor
problem in room)

Importance of room status
• Every hotel staff has a common and clear
understanding of these terms.
• Helps in quick and accurate communication.
• The room status up-to-the-minute must be
communicated between FO & HK for
managing the room inventory optimally and
profitably.

Modes of Payment
Currency
Notes
Travellers'
Cheque
Personal
Cheque
Demand
Draft
Debit
Card

Local Currency
•India
Foreign Currency
•World (dollar, euro, pound
etc.)

Credit Mode of Payment
Credit
Card &
Charge
Card
Travel Agent
Voucher
& MAO
PSO
Corporate
BillingBill to
Company
Letter

MAO & PSO
• Vouchers issued by an airline company for its
outstation staff and layover passengers.
• Meals and accommodation order (MAO)
• Passenger service order (PSO)

Top 10 Credit Card Companies (2018)
1. Visa — 323M Cardholders
2. MasterCard — 191M Cardholders
3. Chase — 93M Cardholders
4. American Express — 58M Cardholders
5. Discover — 57M Cardholders
6. Citibank — 48M Cardholders
7. Capital One — 45M Cardholders
8. Bank of America — 32M Cardholders
9. Wells Fargo — 24M Cardholders
10. US Bank — 18.5M Cardholders

How Charge Cards Work?
“Charge Cards are not Credit Cards, but they do offer
another form of Card payment. They have no pre-
set spending limit, but that does not mean
unlimited spending. Your purchases are approved
based on a variety of factors, and as we get to
know your spending patterns, we’ll adjust how
much you can spend on your Card.”
“you to pay the amount you have charged to the
Card, in full, every month.” (American Express)

Here Are The Best Charge Cards In 2018:
Best For... Card Name No
1st Year Fee -Premier Rewards Gold Card
from American Express
Luxury Travel -The Platinum Card® from
American Express
Business -The Business Gold
Rewards Card from American Express OPEN
Low Annual Fee -American Express®
Green Card

Payment by Foreign Currency
All foreigners have to pay in foreign currency
but bill is settled in local currency.
Passport is asked for, to confirm identity.
Currencies are accepted as per RBI guidelines
and daily exchange rates.
RBI charges a conversion fee from the hotel
which has to be collected from the guest.
The exchange/ conversion rate can be found in
the business section of the local newspaper.

Payment by Foreign Currency
A Currency Encashment Certificate is issued as
proof.
All exchange transactions are recorded on
Foreign Currency Control Sheet.
There are two types of licenses; Buy & Sell.
Hotels only accept foreign currency.

Hotel IHM
Foreign Currency Control Sheet
S.
No
Date Name
Of
Guest
Nationality Passport
No.
Foreign Currency Rate Value in
Rupee
TermsPound
Sterling
US
Dollar
Euro Other

Proper documentation
• Helps in accurately auditing a large number of
transactions.
• Even in automatic systems, the charge and
payments voucher (records) are still physically
verified to avoid computer generated errors;
and also accounting for transaction that are
still not linked to the hotel PMS.

Travellers’ Cheque
Traveller's cheques are special cheques that
you can exchange for local currency when
you are abroad.
a cheque in any of various denominations
(1005001000) sold for use abroad by
a bank, etc, to the bearer, who signs it
on purchase, and can encash it by signing it
again.
Can not be stolen and misused.

Common Cash Modes
• Personal Cheque- not generally
accepted, except from frequent
guests and house account.
• Demand Draft
• Debit Cards

Credit Mode
A credit card is a plastic card that you use
to buy goods on credit. Who doesn’t know THAT!?
There are expenditure limits called Floor Limit.
Credit card purchase, if not paid to the bank
within 30 days, will incur an interest of 2% per
month.
Do not accept stolen, damaged or expired card.
Swipe through EFTPOS for authorization.

Travel Agent Voucher
A pre-paid travel arrangement, made by a
licensed travel agent, for a client in that city.
The details of services is mentioned on the
voucher.
Guest presents it to the hotel to redeem
(claim) his entitlement.
Hotel sends the bill to TA.
TA sends the payment, after taking his pre-
fixed commission.

Bill-to-Company Letter (BTC)
Just like TA voucher, a company issues a letter,
authorizing the executive to avail room, food etc.
at a hotel.
Bill is sent to the company for payment, after the
executive has verified and signed it at check-Out.
Identity of the executive is established at check-
incheck-out.
Any personal expense (incidentals) has to be paid
by executive herself.

Advance Modes of Settlement
1. Real Time Gross Settlement (RTGS)
2. National Electronic Funds Transfer (NEFT)
3. Unstructured Supplementary Service Data
(USSD)
4. “Aadhaar” Enabled Payment System
(AEPS)
5. Unified Payments Interface (UPI)
6. Mobile Wallets

Latest Methods of Payment in India
7. Banking Cards
(Debit / Credit / Cash / Travel / Others)
8. Banks Pre-paid Cards
9. Point Of Sale Machine (EFTPOS)
10. Internet Banking
11. Mobile Banking
12. Micro ATM

Common Check-Out Problems
Late Check-Out: Guest leaves long after
check-Out time i.e. 12 Midday.
Long Queue at Check-Out: Delay in
settlement
Improper Charges being posted: Disputed
entry in guest account.
Late Charges: some credit purchase may not
reach the FO on time and guest departs.

Solutions to common Problems
Late Check-Out:
 Remind guest at check-In about timings.
 Display check-out time on Key Card & at the back
of the door in guest room.
 Slip the printed copy of bill from beneath the
door before 6:00 AM on Day of Departure.
 Charge Late Check-Out Fee. Don’t feel bad in
doing so!

Late Check-Out:
 Offer to keep luggage in safe custody for free.
(Left Luggage Room)
 For Groups, offer free Hospitality Rooms.
 A money deposit at check-in may be taken for
ensuing the return of the room key at checkout.
The guest, a bit keen to get the refund of the
advance, may report early.

Long Queue at Cash Counter:
Usually, the time between 7:30 to 9:30 AM is
the peak rush hour for most departing
guests. The long queue may be minimized
with;
Express Check-Out.
Self Check-Out.

Express Check-Out allows you to checkout of
your Disney Resort hotel without having to
return to the Front Desk. The credit card you
used at check-in is billed for your charges or
purchases during your stay, and a copy of your
bill appears under your door on the morning of
your departure.
Hotel Express Checkout | FAQ | Disneyland
Resort
https://disneyland.disney.go.com/faq/
hotels/express-check-out/

Self Check-Out:
In some hotels guests can check
themselves out of the hotel by
accessing self check-out terminals in
the lobby area or by using an in
room system.

To use self check-out terminal, the
guest access the proper folio and
reviews its contents.
Guest may require to enter a credit
card number by using keypad, or by
passing credit card through a magnetic
strip reader attached to the terminal.

Late Charges
• The potential late charges are from;
• Coffee shop
• Telephone calls
• In- room dining
• Mini bar
• In-room movie
• Kiosks not linked to PMS
• Charges not made on vouchers

Solution for Late Charges
• If possible, inquire telephonically from the
problematic departments.
• Ask the guest directly. Most will own-up honestly.
• Some will keep mum, thinking they can get away
with it.
• However, a guest is responsible for paying late
charges, even after departing from the hotel.
• Never forget to obtain guest signature on the
Guest Registration Card, which is like a master
contract document.
• Follow the policy of the credit card company for
processing of late charges.

Uncollectible Late Charges
• If the late charge letter is returned
undelivered, because the address wasn’t
correct, then the responsibility for not asking
the guest to fill the address column clearly
and completely will lie with the FOA who
handled the check-in.
• Frequency of such uncollectible charges may
indicate need of greater supervision, training,
transfer and disciplinary action.

Remember!
• It is easiest to collect charges when the guest
is still inside the hotel.
• Anything after, is but an unnecessary pain!

Disputed Charges
Hotels have developed a bad name for
themselves for making false and wrong entries
into guest bills.
This should not occur in the first place.
If the amount is small, then cashier may pass
an allowance voucher, to quickly adjust.
For bigger charges, approval from higher
authority and Financial Controller may be
needed.
All is well that ends well!

Check-Out/Settlement Process Recap
Resolves outstanding guest account balances
Verifies/authorizes method of payment
Resolves discrepancies in account balances
Updates room status information
(from occupied to on-change)
Creates guest history records
Creates database for strategic marketing

Departure Procedures
Inquire about additional, recent charges
Post outstanding charges in account
Verify account information
Present guest folio (bill/ account summary)
Verify method of payment
Process payment
Check for mail, messages, faxes

Departure Procedures
• Check for safe deposit box or in-room safe keys
• Collect room key/keycard
• Update room’s status
• Inquire about guest’s stay and experience
• Request that guest complete a guest satisfaction
surveyfeedback form
• Thank them for choosing to stay
• Ask to return. Wish a safe and pleasant journey.
• Update guest history file

Methods of Settlement
• Cash payment in full
• Credit card transfer
• Direct billing transfer
• Combined methods

Delayed Payment Accounts go to City
Ledger Accounts
• Credit/debit card billings
• Direct billings
• Travel agency accounts
• Bad check accounts
• Skipper accounts
• Disputed bills
• Guaranteed reservations “No-Show”
accounts
• Late charges accounts
• House accounts

Guest History File
• Helps managers understand guests needs
• Helps managers determine guest trends
• One of last steps in check-out and account
settlement process
• Helps hotel provide personalized guest service
• Marketing and sales division uses them to
create mailing lists
• Helps managers determine the geographic
distribution of guest addresses, which helps in
targetted advertising efforts

Marketing Follow-Through at Check-
out (Post Departure)
• Tracking guest stays for frequent-guest/
traveler programs
• Verifying guest’s club membership status
• Providing guest comment cards
• Making reservations for departing guests
(for the next stop, or for future trips)

Compilation & Presentation
Praveen Jha
Senior Faculty
IHM Hajipur
Vaishali, Bihar

Checkout & Settlement Process (updated on August 18, 2020)

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