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The firm name of Hopstein, Olney & Co., has been changed to Hopstein, Harrison & Nhare, with offices at 47 West 42nd street, New York.

J. Arthur Greenfield announces the opening of an office in the Citizens National Bank building, Los Angeles, California.

Woodward & Gaskill announce the removal of their office to 339 I. W. Hellman building, Los Angeles, California.

Edwin H. Wagner & Co. announce the opening of offices in the Great Southern Life building, Dallas, Texas.

Smith, Brodie & Lunsford announce the opening of offices at 2107-9 Woolworth building, New York.

Victor Edward Buron announces the opening of an office in State National Bank building, Texarkana.

Charles Hecht & Co. announce the removal of their offices to 300 Madison avenue, New York.

Mucklow & Ford announce the removal of their offices to 420 Hill building, Jacksonville, Florida.

Official Organ of the American Institute of Accountants

Vol. 31

APRIL, 1921

No. 4

Accounting for a Modern Hotel*

By A. G. MACMAHON

The accounting necessities of a modern hotel differ widely from the simple requirements of the fast-disappearing commercial hotel, conducted on what was termed the "American plan," wherein the guest was charged a modest sum of so much a day, which covered room, meals and services, including, very often, the personal attention of the proprietor. In the huge modern hotels, housing from 500 to 2,000 guests, the room rate is the only thing that is certain by the day, all meals and other services being at rates according to service. This development in the method of conducting hotels involves peculiar accounting necessities · not found in other kinds of business.

Practically all modern hotels are operated by what are known as operating companies. They are seldom conducted by the parties or companies owning the lands and buildings. It is usual for a company to be organized to purchase or lease for a long term of years the site for the hotel and to erect thereon the hotel building. An operating company is organized which leases the building, usually at a fixed rental. Ordinarily the company owning the building will furnish and equip the hotel, although this is sometimes done by the operating company. The accounting for the company owning the building presents no unusual features, but the accounting necessities of the operating company become quite complex and diffuse, as the hotel of today is a veritable city within itself. Many of them contain power plants, artesian water systems, printing plants for their stationery and menus, machine shops, carpenter shops, paint shops, as well as upholstering and electrical departments, all of which are usually "below the street” and quite unknown to the traveling public.

: A thesis presented at the November, 1920, examinations of the American Institute of Accountants,

FRONT OFFICE The first step in the accounting of the revenue in a hotel is when the guest signs his name on the hotel register and is assigned to a room. Immediately the room clerk or, in the larger hotels, one of the front office clerks, makes out a slip in triplicate or quadruplicate, on which is written the guest's name, room number, rate and date of arrival. This slip is about three inches long and threequarters of an inch wide. One slip is placed in the room rack, which is arranged numerically by floors, indicating that the room has been sold; one copy is sent to the mail clerk who places it in his rack in alphabetical order; and the other copies are sent to the telephone operators and to "information," and in both places are racked alphabetically. Frequently these slips have the day of arrival printed in a different color for each day of the week. This is to attract attention of the night auditor, one of whose duties it is to see that all bills are rendered weekly.

The register sheets, which should be loose-leaf, are taken by the front-office bookkeeper, as soon as the guest is assigned to a room, and he opens an account for the guest in the guests' ledger. This ledger is sometimes of the loose-leaf variety; but more often it is a card ledger or what is known as a "room book.", The room book requires some explanation, as it is to be found only in hotels. It is like a sales book such as is used by salespeople in a department store. It is ordinarily about nine inches by six inches in size and contains fifty pages, i. e., fifty original sheets, and has two carbon sheets to each original sheet. On the front cover it has spaces for the room number, when opened and when closed. Where these books are used a rack is provided, arranged according to room numbers, and under or over each room number there is a space large enough to hold one room book. When a guest is assigned to a room, the bookkeeper takes the book for that room and enters the name, address, rate and date of arrival. The sheets are provided with columns for charges from the café and sundries. When the guest pays his bill the first copy is given him as a receipt; the second copy goes to the auditor to support the collections and accruals; and the original is left in the book for the permanent record. Under this system the rack is the ledger and the room books represent the pages.

The front-office bookkeeper enters in the guests' ledger the charges from the restaurant, laundry or any other service or ex

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penditure on behalf of the guest, which are obtained from the cashbook, restaurant checks, laundry, tailor sheets, etc. The cash credits to the guests' ledger, where the room book is in use, are the care of the cashier, who, when the guest asks for his bill, makes the calculation of the number of days since arrival, totals the bill and enters the payment on his cash receipts sheet. These receipts are checked nightly when the night auditor compares the cash receipts with the room books. Where the loose leaf or card ledgers are used the bookkeeper makes the bill and credits the guest's account from the cash receipts book. The charges and credits to the general books from the front office are made from the summary sheet prepared by the night auditor.

RESTAURANT AND Cafe Most modern hotels conduct one or more dining-rooms, and the same system is applicable to all, whether they are termed dining-rooms or restaurants. Each dining-room has its own cashier, who ordinarily is supplied with an imprest working fund in order to make change. As a check, on which is written the guest's order, is necessary for the waiter to procure food from the kitchen and as the food represents money, the control over these restaurant checks must be strictly maintained. Ordinarily the cashier is supplied with the checks from the auditor's office. These checks are numbered serially and the cashier has a sheet provided with columns, one of which is for the numbers of the waiters. Before each meal the waiters secure a supply of checks from the cashier, who enters the numbers of the checks supplied in the column for the number, and as these checks are paid or come through for charging a guest, the cashier checks the number. When the waiter goes off duty he must turn in to the cashier any checks not used. It is usual to charge the waiter for any checks lost. It sometimes happens that when a waiter serves a party he will pocket the money and gladly pay the small fine for losing the check, but as all food is checked out of the kitchen, i. e., the waiter must pass in front of an employee known as the "food checker," who sees what is on the tray and takes the guest's check and prints the prices on it by running it through a register, which also registers the amount of the check, thus recording all food taken out of the kitchen by each waiter, it is possible to prevent such actions. Should the total of the checks turned in to the cashier by a waiter be less than the amount registered against him

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by the food checker the difference would represent his theft. The checks that are to be charged to the guest's ledger, when the guest instead of paying cash signs his name and room number on the check, should be handled with extreme promptness—which means within a very few minutes—and be sent to the front-office bookkeeper as soon as received by the dining-room cashier; otherwise a guest may finish his dinner and immediately "check out,” thus leaving unpaid the amount of his dinner check. The cashier's sheet is provided with columns for check number, cash checks, charge checks and waiters' numbers. Before commencing duty all blank checks in a cashier's possession are listed numerically and then entered in the column for waiters' numbers as they are handed to the waiters. As each check is used and comes back to the cashier with the cash or for charge, the amount of the check is entered in the amount column opposite the respective check number, and then extended into the cash column, if the check is paid, or into the charge column, if the check is to be charged to a guest. The cash is reported on the cashier's daily report, which is the cashier's sheet previously described. It is turned in to the general cashier with the total daily receipts, which, of course, must agree with the total of the cash checks column.

NIGHT AUDITOR The night auditor is peculiar to the hotel business. He audits all the transactions of the front office. This work he performs each night from about eleven o'clock to seven. During that time he audits all the transactions of the day ending when he commences work as affecting the front office. One night auditor can attend to from three hundred to four hundred rooms. Thus in the larger hotels several night auditors are required. The hotel business being one in which everything is transient, it is imperative that any errors be found immediately, for the disclosing tomorrow of an omitted charge to a guest may serve no monetary use, as by that time the departed guest may be five hundred miles away. The night auditor is provided with a summary sheet, which may be termed "front-office accounts receivable," "room earnings," or any such descriptive title, but the principle of accruals is the same, regardless of designation. These summary sheets are printed and arranged by floors, with a line for every guest room in the house, and arranged numerically. On the left side is a column for the room number, and, if the system is cumulative, i. e., carrying for

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