Different Payment Methods In The Hotel Industry Finance Essay

Different earnings Methods In The Hotel Industry Finance testThe forms of behavement accepted in hotels have changed over the years. Most hotels still accept a variety of methods of payment mainly so as to leave behind a service to their clients and to generate additional earnings by means of exchange. A large number of independent be activelers now use some form of credit entry or charge measure. Hotels are now very familiar with a wide range of card, often with dual ownership (e.g. the HCIMA have their own form of Barclaycard). There go away always be a number of other executions within the hotel regardless of the method of payment. These transactions will often be paid through a number of other methods. Upon departure, guests hobo settle their reckon statement in one of a number of different ways billsForeign currencyChequeTravellers chequeForeign chequeDebit card confidence cardCharge cardLedger payment verifier (e.g. travel agent, A TO).In dealing with separate ly of these methods of payment, the hotelier moldiness assess the impact of three major factors liquidity, security and worth. liquid stateIt is advantageous to the hotel if the account is paid in cash, as the hotel can immediately use the money to purchase goods itself, or bank the money and earn interest on it. Payment by ledger, however, will take much longer perhaps as much as cardinal or three months may pass onward the money can be re-used in the business.2. SecurityThe two sides to security are as follows The likelihood of forgery or fraud by each of the payment methods.The subsequent attempt of theft once the hotel has the money. Payment by cheque is a greater security risk than evaluate cash in Payment of the account. It would be difficult to trace stolenCurrency if the hotel was robbed and cheques would unlikely is taken as they wont be of any value to a thief.WorthThe essential amount of money the hotel receives in payment will not be the same in every case. Handlin g charges, commission and delays in payment will cost the hotel money. But because ofThe extra commission, accepting payment in foreign currency will usually mean that when guests use this method of payment, the hotel gains an extra profit. evade 9.1 shows that the profitability of the hotel may be affected by the variety of payment methods usedby the guestsMethod ofPaymentSecurityLiquidityWorth billsThe risk of loosing cash throughtheft is high, but the risk of forgeryis low.Immediate100 %ForeigncurrencyThe risk of loosing foreign currencythrough theft is high, but the risk offorgery is low.1 Day102 %ChequeCheques carry a high risk of fraude.g. non-payment. If securitychecks are carried out, risk of theftis low.3 geezerhood98 %TravellerschequeSafe method of payment if controlchecks are carried out properly.Low risk of forgery.4 Days98 %Debit CardSafe method of payment if controlchecks are carried out properly.Low risk of forgery.3 Days99 %Credit cardSafe method of payment if cont rolchecks are carried out properly.Low risk of forgery3 Days96 %Charge cardSafe method of payment if controlchecks are carried out properly.Low risk of forgery3 Days96 %Ledger paymentIf creditworthiness is naturalizedbefore hand, it is a safe method ofpayment, however in that location is always arisk of non-payment of accounts30 Days98 %Voucher (e.g.travel agent,A TO)If creditworthiness is establishedbefore hand, it is a safe method ofpayment, however there is always arisk of non-payment of accounts60 Days89 %Table 9.1 Security, Liquidity and Worth of the various methods of paymentChequesPayment by cheque use to be one of the most common methods of payment. It reflected the decline of payment method in cash in recent years. Cheque guarantee cards guarantee the payment of the cheque to an agreed amount (usually 50 or 100). But there are a few simple rules that needto be followed.The guarantee provided by cheques guarantee cards areOnly one cheque is used per transactionIt is signe d in the presence of the cashierThe bank cypher on the cheque and the guarantee card agreeThe card number is written on the reverse side of the chequeThe card has not expired.A bank does not guarantee to honor a transaction where an account of is paid by issuing two cheques of 50. The transaction is changed to a cash one by putting the card number on the back of the cheque. The customer will because not be able to stop the cheque later. It is crucial that the cashier watches the customer sign the cheque and then compares to the signatures carefully as toestablish their similarity. Listed downstairs are factors that need to be look into when handling cheques guarantee cards.1. Code NumberThe bank sorting code number must agree with the code of the issuing cheque.2. Card NumberThe card number is written on the reverse of the cheque by the accepting cashier. It does not correspond to any other number on the cheque.Expiry considerThe card will not be valid if it is out of date.Signa tureThe signature must be check into against the signature written on the back of the cheque. The card should be examined to make sure that the signature panel has not been tampered with.Crossed cheques are now for the most part issued and therefore have to be paid into a bank account. With the signature of the payee at the back, it can be reassigned to a third party. In the case where a third party cheque is returned, the hotel has to contact the original drawer of the cheque to obtain settlement. It is for this reason that hotels do not accept third party cheques.DateWhen accepting a cheque, the cashier should check a number of points, one of the most important world the date. A cheque that has a date in the future on it (a post-dated cheque) will not become valid until that date. A cheque more than six months old (stale) is nolonger valid.Crossing ChequesThe two most important rules about crossing cheques are as followsA/c payee this means that the cheque can only be paid into the account of the person nominated. It cannot be assigned to a third party. This is useful for cheques sent by post.Not to exceed xxx this is crossing establishes a maximum observe to the cheque and guards against fraud by making it more difficult to change the amount payable.Travelers ChequeTravelers cheques (Fig 9.4) are issued in fixed denominations by major banks, travel agents and now building societies throughout the world. The customer will need to purchase them (before leaving home) using their own currency, or in the currency of the country being visited. These cheques need to be signed when purchased. The serial numbers are then noted by the issuing bank cashier. A service charge of 1% is normally paid to the bank by the customer. Itcovers insurance against loss or theft. The issuing company will repay the customer within 24 hours should the travellers cheques be stolen. It is for this reason that travellers cheques are found to be much more secure than currency. It is e ssential that the cashier should watch the guest sign and date the cheque when accepting these cheques. Should there be any doubt or irregularities about the signature, the customer can be asked to sign on the reverse ofthe cheque. Proof of identity can also be verified by asking the guest to produce their passport before accepting the travellers cheque.Debit card game, Credit Cards and Charge CardsDebit CardsThe common alternative to cheques nowadays is debit cards such as Switch and Delta. The way that it works is similar to that of cheque whereby the heavy(p) sum is taken directly from theclients account. But the transfer is through an electronic point-of sale and no cheque is necessary. The cashier and the payer will receive a slip notifying them of the details of the payment. This is usually the same card that is used to guarantee a cheque or withdraw money from a cash point. marge Credit Cards Visa and Access are the two major bank credit cards in the UK. These cards are usu ally issued for surrender and customers need not to pay for any annual subscription. The customer uses the card to purchase goods and services by signing a sales voucher for the keep down amount of the account. The card company will send a statement to thecustomer with information of all the transactions of the month before. The customer has the choice to pay the total owing or only a proportion of it. The rest of it may be paid over a period of time. As the cards constitute a form of credit, the minimum payment is fixed by the government. The customer will receive a personal credit limit which must not be exceeded in any one month. Visa is an internationally recognized name, and while most countries use an additional name (e.g. Barclaycard in the UK visiting cardBleu in France), all cards carry the name Visa and bear the distinctive blue, white and gold stripe logo (Fig. 9.5).