Secure cash handling

Describe the main system and procedures used to ensure secure cash handling in the Front Office.

The main system used in the Front Office operations that ensure safe cash handling is the usage of FO cashier banks. The Bank is nothing more than a standard amount of cash which a cashier is assigned to handle during his shift for any transactions might happen during his work time. The standard amount of money the bank has is the exact amount of money it should have at the beginning of the cashiers shift and what's left inside at shift's end once revenue checks and other negotiable tools are deducted. The cashier who signs for a bank during the beginning of his shift is also the only one who has access to the money, having one person responsible for every bank helps lessen money handling errors. Before the cashier hands over his money to the vault aster his shift is over he has to record all content of the front office cash folder on its outside and when he leaves the folder in the vault at least one other employee should be present to witness the action then both employees have to sign a log which states the time at which the folder was deposited in the vault.

The net cash within the cashier's bank equals the checks and other negotiable items, plus any pay outs and minus the standard cash amount. An overage could happen when the total of money in the bank exceeds net cash receipts, a reason for this to happen could be due to an error during giving change to a guest by giving out less than the guest would normally get. Another problem could be a shortage, this can occur when the net total is greater than the actual total money in the bank, a reason for this could also be an error during handling change and giving a guest more money back than he should have received. Both overages and shortages are bad to happen.

When the cashier pays out more money than he receives a due back takes place, this happens when the cashier is given many checks and a big amount of bills as payment and since notes can't be used for ongoing transactions they are deposited with other receipts. What follows is that the final deposit is higher than the net cash receipts, the due backs however are usually replaced with bills and coins later on during the day.

Part of a Front Office Manager's job is to monitor sales. Explain the various reports that can be used to evaluate sales performance in the Front Office.

  1. Daily operations report, also known as manager's report, daily revenue report or daily report. It contains a summary of the hotel's financial activities during a period of 24 hours. Furthermore this report is used to settle cash, bank accounts as well as revenue and accounts receivable. The report provides also important data that has to be entered to link front and back office computer functions.
  2. Common rations used by the Front Office. Occupancy ratios measure how successful the front office was in selling the hotel's prime product, the rooms. To calculate the occupancy percentage during any specific period we divide the sum of occupied room during the period in question with the total number of rooms the hotel possesses and the result is multiplies with a 100 to yield the percentage. To calculate the percentage of guest in the hotel at a specific point in time the FO uses the same formula as above only that we use the current number of guests divided with the maximum guest capacity and the result is multiplied with a 100. The average daily report provides us with information of our average revenue per room. To calculate the average rate per guest the Front office divides the total room revenue with the total number of guests.
  3. Rooms' revenue analysis is an important report in order to enhance control over room revenue also called rate variance report. It lists those rooms that have been sold at room rates other than their actual rack rates. And the other formula used is the yield statistic, this ratio of the actual revenue to the total possible potential revenue if all rooms are sold at their rack rates. The Yield statistic formula is used while comparing the achieved revenue with a potential revenue that would be achieve if the hotel had 100% occupancy and all rooms were sold at their rack rate the result of this division is multiplied with a 100 to produce the percentage.
  4. Hotel income statement, this report provides financial information concerning the results of the hotel's operations for a given period of time.
  5. Rooms division income statement, sometimes called a schedule is used to reference on the hotel's income statement. It is prepared not by the RD but the accounting department.
  6. Rooms division budget reports, are used on a monthly bases on the budget and compare the actual revenue and express figures against budgeted amounts described both in money values and percentage variances.

Exercise calculation results:

Occupancy rate: (occupied rooms/ total rooms)x100= (202/247)x100 = 81.78%

Sleeper rate: (No. of guests/guest capacity)x100 = (397/434)x100 = 91.47%

Achieved revenue%: (actual room revenue/ potential room revenue) x100=

= (18,879.43/24,002.59)x100= 78.65%

Average daily rate: total room revenue/ number of rooms sold = 18,879.43/202= =93.46 € per room

Average rate per guest: room revenue/ number of guests = 18,879.43/397= 47.55€

Revenue per available room: total room revenue/number of available rooms =

= 18,879.43/247= 76.43€

The number of double rooms in single occupancy:

(60x2)- 111= 120-111= 9 rooms

How can a hotel monitor customer service standards?

To monitor customer service standards the hotel can proceed with the following measures.

First of all giving the guests to fill in form requesting their opinion on goods and services offered and to grade the overall performance of the operation on a scale e.g. from 1 to 10. This will give the hotel a basic idea of what the guest think of the establishment based on what is advertised and they pay for compared to what they receive in the end.

Another way is to employ 'Mystery Shoppers' to act like quests who will visit, phone or in some way experience the service or goods the hotel offers and compose a report for the management based on what was requester from them to investigate e.g. helpfulness of staff, politeness of the reservation agent, speed of service and quality of food and drinks etc.

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