HOTEL ACCOUNTING POLICY AND PROCEDURE MANUAL
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ACCOUNTS PAYABLE AND PURCHASING:
AP – 100 / CHECKBOOK ACCOUNTINGAP – 102 / PURCHASE REQUISITIONS AND PURCHASE ORDERS
AP – 104 / RECEIVING OF GOODS AND SERVICES
AP – 105 / TRAVEL AGENT COMMISSIONS
AP – 106 / DISBURSEMENTS VIA CHECK, WIRE TRANSFER OR ACH
AP – 115 / EMPLOYEE EXPENSE REPORTS
AP – 120 / ADVANCE DEPOSITS
AP – 125 / VENDOR LETTERS
AP – 130 / CAPITAL EXPENDITURES, EXCLUDING CAPITAL LEASES
AP – 135 / OWNER STATEMENTS & DISBURSEMENTS (CONDOHOTELS)
AP – 140 / PREPAID EXPENSES
AP – 145 / ACCRUED LIABILITIES
AP – 150 / VENDOR STATEMENT RECONCILIATION
AP – 155 / CHECK STOCK CONTROL
AP – 160 / CRITICAL DATE LIST OF RECURRING EXPENSES
AP - 165 / SALES, USE AND OCCUPANCY TAX REPORTING
ACCOUNTS RECEIVABLE CONTROL:
AR – 100 / CREDIT POLICY AND DIRECT BILLING AUTHORIZATION PROCESSAR – 105 / DIRECT BILLING AND COLLECTION PROCESS
AR – 107 / ACCOUNTING FOR CITY LEDGER TRANSACTIONS
AR – 110 / GUEST LEDGER CREDIT POLICY AND PROCEDURES
AR – 115 / GUEST LEDGER ADJUSTMENTS AND TRANSFERS
AR – 118 / ACCOUNTING FOR CREDIT CARD RECEIVABLES
AR – 120 / ACCOUNTING FOR CREDIT CARD CHARGE-BACKS
AR – 125 / ACCOUNTS RECEIVABLE AGING STANDARDS
AR – 130 / RESERVE FOR DOUBTFUL ACCOUNTS
AR – 135 / EMPLOYEE WAGE ADVANCES
AR - 140 / EMPLOYEE TRAVEL ADVANCES
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CASH CONTROL:
CASH – 105 / DROP SAFE PROCEDURES
CASH – 110 / CASHIER OVER/SHORT REPORTING
CASH – 112 / DAILY CASH, CHECK AND CREDIT CARD DEPOSITS
CASH – 115 / ARMORED CAR TRANSPORT OF HOTEL FUNDS
CASH – 120 / SAFE AND HOUSE FUND STORAGE BOX ADMINISTRATION
CASH – 125 / CHECKS RECEIVED IN MAIL
CASH – 127 / WIRE TRANSFERS RECEIVED
CASH – 130 / PETTY CASH
CASH – 135 / BANK ACCOUNT ESTABLISHMENT
CASH – 140 / BANK ACCOUNT RECONCILIATION – DEPOSITORY ACCT
CASH – 142 / BANK ACCOUNT RECONCILIATION – CREDIT CARD ACCT
CASH – 144 / BANK ACCOUNT RECONCILIATION – CHECKING ACCOUNTS
CASH – 150 / VENDING MACHINE PROCEDURES
OPERATED DEPARTMENT CONTROLS:
OPS – 105 / LABOR SCHEDULING, REPORTING AND CONTROLOPS – 110 / HOUSEKEEPING DISCREPANCY REPORT
OPS – 120 / FOOD AND BEVERAGE INVENTORIES
OPS – 125 / FOOD AND BEVERAGE STORAGE AND REQUISITION
OPS – 127 / FOOD OUTLET CONTROLS
OPS – 129 / BEVERAGE OUTLET CONTROLS
OPS – 130 / BANQUET CONTROLS
OPS – 132 / EMPLOYEE CAFETERIA COSTS
OPS – 135 / ACCOUNTING FOR PROMOTIONAL CHARGES
OPS – 145 / GIFT CERTIFICATES
OPS – 150 / INCOME AUDIT PROCEDURES
OPS - 155 / INVENTORY OF RETAIL OUTLETS
PAYROLL CONTROLS:
PR – 100 / PAYROLL PROCESSINGPR – 110 / PAYROLL GARNISHMENTS
PR – 115 / PAYROLL CHECK/DIRECT DEPOSIT DISTRIBUTION
PR – 120 / TIP REPORTING AND PROCESSING – FOOD AND BEVERAGE OUTLETS
PR – 125 / BANQUET SERVICE CHARGES AND MISC GRATUITIES
PR – 130 / MANAGERS’ RESPONSIBILITIES FOR PAYROLL DATA
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ADMINISTRATIVE POLICIES:
ADM – 100 / CONTRACT, LEASE AND LICENSE ADMINISTRATIONADM – 110 / RECORD RETENTION SCHEDULE
ADM – 115 / SALES TAX EXEMPTION
ADM – 120 / BALANCE SHEET RECONCILIATION
ADM – 130 / GUEST PACKAGE RECEIVING AND SHIPPING
ADM – 135 / TRADEOUT ACCOUNTING PROCEDURES
ADM – 140 / UNCLAIMED CHECKS & ESCHEAT
ADM – 145 / SAFETY DEPOSIT BOXES ISSUED TO GUESTS
FORMS:
FORM AR-105A / CREDIT APPLICATION FORMFORM AR-105B / CLIENT COLLECTION LOG
FORM AR-105C / COLLECTION LETTER #1
FORM AR-105D / COLLECTION LETTER #2
FORM AR-105E / COLLECTION LETTER #3
FORM AR-110B / CREDIT CARD AUTHORIZATION FORM
FORM AR-135 / EMPLOYEE WAGE ADVANCE PROMISSORY NOTE
FORM AR-140 / EMPLOYEE TRAVEL ADVANCE PROMISSORY NOTE
FORM CA-100 / HOUSE BANK CONTRACT
FORM CA-102 / HOUSE BANK COUNT SUMMARY
FORM CA-105 / DAILY DEPOSIT DROP LOG
FORM CA-112 / DAILY CASH AND CREDIT CARD DEPOSIT WORKSHEET
FORM CA-125 / CHECKS RECEIVED IN THE MAIL LOG
FORM CA-127 / WIRE TRANSFERS RECEIVED LOG
FORM CA-140 / BANK ACCOUNT RECONCILIATION FORM - DEPOSITORY
FORM CA-142 / BANK ACCOUNT RECONCILIATION FORM – CREDIT CARDS
FORM CA-144 / BANK ACCOUNT RECONCILIATION FORM – CHECKING AC
FORM ADM-100 / CONTRACTS, LEASES AND LICENSES SCHEDULE
FORM ADM-130 / PACKAGE TRANSFER FORM
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SECTION: AP NUMBER: 102 / EFFECTIVE DATE: 1/1/2005PURCHASE REQUISITIONS AND PURCHASE ORDERS
APPROVED: CFO Signature / ICQ REFERENCE:
POLICY:
It is the policy of the hotel to require the issuance of an approved purchase order prior to ordering any goods or services for the hotel. The only exceptions to this policy are consumable food and beverage items, items for which an approved check request has been issued in advance of the purchase, contractual obligations for which a properly authorized contract exists, or a single item or groups of items costing collectively less than $100.00.
PRIMARY CONTROL IMPLEMENTATION AND RESPONSIBILITY:
It is the Controller/DOF’s responsibility to administer this policy, and the responsibility of each person charged with procuring goods or services for the hotel to adhere to this policy.
PROCEDURE:
For a complete illustration of the entire purchasing and receiving process, please review the flowchart on Illustration AP-1.
The procedures below assume a paper PO system, but the same principles apply to an electronic system.
1) After determining if funds are available for the purchase of goods or services, (see SOP AP 100 – Checkbook Accounting), a Purchase Requisition is completed by the person requesting the purchase. A Purchase Requisition details the information necessary to make a purchasing decision as follows:
a) Vendor information including name, address and phone or e-mail contact information.
b) Quantity, unit price, extended price of units. Cost of freight, sales tax, duties and the total cost of this purchase.
c) Reason for purchase.
d) The availability of funds for this purchase. On the purchase requisition, the fund availability area shows the checkbook prior balance, amount of this purchase, and balance remaining after this purchase. If adequate funds are not available, an explanation of which account category was reduced in order to increase the funds available for this purchase. Only the General Manager has the authority to override checkbook restrictions and approve purchases wherein adequate funds are not available in a department’s forecast.
2) Purchases over $1,000 that are non-repetitive in nature require two bids from competing vendors.
3) Repetitive purchases for goods such as office supplies must be put out for competitive bidding on an annual basis.
4) Contract services such as maintenance contracts must be re-bid with at least three competitive bids as contracts expire. (See also SOP ADM 100-Contract, Lease and License Administration).
5) The Purchase Requisition is routed for approval as follows:
a) Department Manager may purchase goods or services up to $100 without further approval.
b) Division Head (EC Member) must approve all departmental requisitions, and has approval level of up to $500 without further approval. Route requisition to A/P after signature.
c) General Manager must approve all requisitions over $1000 in value.
d) Controller must approve all requisitions over $500 in value.
6) If the Purchase Requisition is approved, a number is assigned to the requisition, at which point the requisition becomes a Purchase Order (PO). The PO is simply a purchase requisition that is fully signed and is assigned a Purchase Order Number.
Nothing may be ordered by the hotel (excluding exceptions noted above) without a signed purchase order. The hotel reserves the right to refuse delivery of any good or service for which a signed purchase order has not been completed. (See also SOP AP-125 Vendor Letters.)
7) The Purchase Order is now routed to the Accounts Payable department for distribution of copies:
a) Copy 1 (Original) is routed back to the originator to facilitate purchasing the items. The vendor should be sent a copy of this purchase order.
b) Copy 2 (Yellow) is routed to the Receiving Department and is filed in a temporary receiving file until goods are received. (See SOP AP 104 – Receiving of Goods and Services).
c) Copy 3 (Pink) remains in A/P to be filed numerically.
8) Goods or services are now ordered by the originator or the purchasing department (see breakdown on the following page).
The following products or services are typically ordered by the following individuals:
Product or Service Who Orders?
Food and Beverage consumable products / Purchasing DepartmentFood and Beverage Linen, China, Glass, Silver / Food and Beverage Director/Director of Operations
Rooms Linen and Glassware / Rooms Director/Director of Operations
Department Other Expenses / Department Managers
Maintenance Contracted Services / Director of Engineering
Capital Goods / GM, Controller or Director of Engineering
SECTION: AR NUMBER: 100 / EFFECTIVE DATE: 1/1/2005
CREDIT POLICY AND DIRECT BILLING AUTHORIZATION PROCESS
APPROVED: CFO Signature / ICQ REFERENCE:
POLICY:
Hotel Clients interested in establishing a direct billing relationship with the hotel must comply with the minimums, limitations and procedures set forth in this policy.
PRIMARY CONTROL IMPLEMENTATION AND RESPONSIBILITY:
It is the booking Sales Manager's responsibility to establish a method of payment prior to the group’s arrival. The Director of Sales and Marketing, Controller/DOF and General Manager are responsible for administering and monitoring adherence to this policy.
PROCEDURE:
The method of payment must be addressed in the initial sales phase and the method of payment must be agreed to in the final sales contract.
Direct Billing Privileges will only be granted to certain groups. For groups that will not be considered for direct billing and require payment in advance, the procedures to handle advance payments are as follows:
Ø Any events that fall into the category of Political, Sports, Theatre, Travel agencies, School functions (except as covered by a School District Purchase Order), Weddings, Bar/Bat Mitzvahs, Religious, Christmas Parties, Contests, any function depending upon ticket sales, and any business with total billable revenue under $5,000 will not be considered for direct billing.
Ø For such groups where payment in advance is required by policy, it is the booking Sales Manager’s responsibility to communicate this policy requirement to the client during initial phase of the sales process.
Ø The booking Sales Manager must ensure that full payment is received 5 days prior to the start of the event. This may be in the form of cash, credit card or company/personal check. (Accounts Receivable is responsible for getting check guarantee approval for all checks received within the last 10 days prior to the group’s event, and for obtaining credit card approval for the amount of the prepayment at least 5 days before the function.) Any payments made after this 5-day window must be in the form of cash or cashiers check a minimum of 3 days (72 hrs.) prior to the group’s arrival. FULL PRE-PAYMENT must be received a minimum of 3 working days prior to the start of the event or the event will not take place.
Government, Military and School District Purchase Orders will be accepted in lieu of a Credit Application to establish a direct billing relationship with the hotel. The booking Sales Manager is responsible to ensure that the Purchase Order is sufficient to cover all charges, including sales tax. (In general, such groups are not exempt from sales/occupancy tax. See SOP ADM-115 Tax Exemption).
Credit Card Payment
Events may be paid by credit card upon completion of a credit card authorization form (Form AR-110B) and MUST include copy of the front and back of the card. The credit card authorization must include an estimate of anticipated charges. Account Receivable is responsible to obtain a credit card authorization code three (3) business days prior to the start date of the event. The final balance will be charged by AR the day after the event. It is imperative that the booking Sales Manager notify AR if the anticipated charges vary from this original amount.
Direct Billing Authorization Process:
Direct Billing privileges will be extended to groups that do not fall under the prepayment requirement policy outlined on the prior page, and that are approved by the Controller or General Manager in accordance with the following procedures:
1) A credit application (Form AR-105A) must be sent to the client by the booking Sales Manager, completed by the client and returned and reviewed by the booking Sales Manager. Once reviewed, the booking Sales Manager forwards the application to Accounting, retaining a trace file copy for the sales file. The application must be returned by the client no later than 30 days prior to arrival of the group. (For internal purposes, a minimum of 21 days in advance is required.)
2) The credit application must be processed by Accounts Receivable, and acceptance/denial of the application communicated back to the booking Sales Manager at least two (2) weeks prior to the arrival of the group. It is recommended that the process of checking the client’s credit be outsourced to a company that processes such credit applications for the hotel industry.
3) If processing the credit application is done in-house, at least two hotel references must be contacted to determine the client’s payment history, and the client’s bank must be contacted to provide the client’s bank history. The application is then forwarded to the Controller for a credit decision.
4) In the event that the Controller denies the application, the decision may be appealed to the General Manager who has final say on the billing decision. If the GM chooses to override the Controller’s decision, the Controller is not responsible for the final outcome of the billing process, but will make every attempt to collect the amount due.