Hospitality Operations Objective 4.04 Accounting Department

Objective 4.04 – Accounting Financial Transaction – Buying something and paying for it Ledger – What innkeepers used to keep track of each transaction that took place during the day Accounting – System of recording and summarizing financial transactions and analyzing and reporting the results

Objective 4.04 – Accounting What is the difference between a “debit” and a “credit”? Debit – Money that is taken out of the business. Money that you would use to pay bills. A Debit is subtracted from the total Credit – Money or a payment that has been received

Objective 4.04 – Accounting (5) Main Functions of the Accounting Department Keep track of all Transactions – The accounting department keeps track of every financial transaction that occurs in the business. - Payroll – Money paid to employees for their labor - Taxes – Money paid to the federal, state, and local government required by law - Software used includes the PMS and POS systems

Objective 4.04 – Accounting 2. Make payments and Deposits – All the money that flows in and out of the business 3. Categorize Transactions – Each transaction will have a proper account. Each separate account will be used to keep track of all transactions in one category - Account – Financial record that lists transactions and shows the balance - System of Accounts – An organized way of naming and categorizing accounts - Uniform System of Accounts – Provides uniform names for each category of accounts for use in the Hotel Industry

Objective 4.04 – Accounting Control Costs – The accounting department monitors the costs of items purchased by the business. If the costs start rising they will let the appropriate manager know Prepare Financial Statements – The accounting department will prepare a variety of statements and financial reports - Income statement – All revenue made and expenses paid out (also called a profit and loss statement) - Cash Flow Statement – The way cash (only) moves in and out of the business during a specific period of time

Objective 4.04 – Accounting The Controller Top Manager of the Accounting Department Oversees all the operations of the accounting department Responsibilities Include Prepare reports based on financial transactions Supervise the preparation of budgets Manage the accounting department

Objective 4.04 – Accounting Departments within Accounting Accounts Receivable Money that is owed to the business Accounts Receivable Clerk – Collects the money Accounts Payable Money that a business owes to another business Accounts Payable Clerk – Pays invoices owed Night Audit Auditing is completed to discover and correct accounting errors Night Auditor – Person who completes the night audit Posting Charges – Entering the charges to a guest folio

Objective 4.04 – Accounting Credit Department Protect the business from Loss Credit History – Record that shows whether a person or business pays its bills on time Food and Beverage Controller Food and Beverage Controller is the accountant for the food and beverage department of the hotel

Objective 4.04 – Accounting Delinquent Guests – Guests who are late with payments that owe the hotel money Vocabulary Words to complete: Informal/Picture Definitions Ledger Delinquent Guests Payroll Credit Taxes Debit Controller Audit Night Auditor Credit History