Direct Bill/ City Ledger - Introduction

---

Definitions

Direct Bill in the hotel industry refers to a transfer of guest charges from the guest folio to a customer account for collection of payment at a later time.

City Ledger is a hotel accounting term which refers to accounts receivable records typically maintained and processed in the back office rather than in the front office. 

A ledger is a “book” into which financial transactions are recorded. In hospitality, you have at least three: guest ledger, city ledger, and general ledger.

Guest Ledger is the sum of all folios. A folio is a “page” in a ledger “book”. A guest “bill” is a folio. You have guest folios and master folios.

• A guest folio is the hotel guest bill to which charges and payments post.
• A master folio may used for groups, in which the group director is responsible for payment rather than individual guests. Likewise, a master folio may be used for corporate accounts, administrative transactions, employee charges, and so on. 

City Ledger consists of amounts due that were not collected in advance or at the time of check-out.

• In Execu/Suite™ PMS, when a DB payment is posted in Hotel, the guest folio is zeroed out, just as with any payment type. Since you haven’t actually received the money yet, it’s still due. Therefore, a transaction is posted into City Ledger Accounts Receivable showing a charge for that customer for the guest’s stay. When payment is received, the payment is posted in Direct Bill (City Ledger) rather than into a folio in Hotel.
• Hotels with Execu/Suite™ PMS and Execu/Touch™ POS run POS charges through the Hotel system by closing POS checks to account charges. These charges post to master folios.
• Direct Bill (City Ledger) also handles A/R charges in stand-alone Execu/Touch™ POS applications. 

In General Ledger, both Guest Ledger and City Ledger are considered Accounts Receivable. Guest Ledger may show a credit balance if your policy is to collect payment in advance of charges posted (such as room charges, etc.). City Ledger typically shows a debit balance since the charges transferred from Guest Ledger (via a DB payment into the folio) are owed.

An invoice is a record of money owed for goods or services. When a guest folio is closed to DB, an invoice is created. This one-line transaction includes the folio number, room number (if guest folio), and guest's name. Each of these items is an Open Item.

When you receive payment from the customer, you post an Open Item Payment. The payment is applied to one or more items. The full payment must be applied. If it does not equal the sum of the item or items, you will need to overpay or underpay one or more items in order to apply fully the payment.

A Customer Statement is a printout of each unpaid (or partially paid or overpaid) invoice or item. 

​

Overview

As stated in the previous section, hospitality accounting has two main accounts receivable types – Guest Ledger and City Ledger.

City Ledger handles Direct Bill (DB) processing in Execu/Suite™ PMS. It also handles A/R charges in stand-alone Execu/Touch™ POS applications. Execu/Touch™ POS (with Hotel) run charges through the Hotel system by closing POS checks to account charges.

Both guest folios and master folios contain transactions. Payment methods, such as cash or credit cards, apply at the time they are posted. In instances where payment will be received at a later date, a DB payment is posted in Hotel to the folio, or an A/R charge is selected in Execu/Touch™. A person or company will be responsible for payment after the guest has departed. You will send that person or company a statement of charges. Upon receipt of the statement, the person or company will send you payment which you will post to the account.

​

​

Execu/Suite Hotel

1. A hotel guest or master folio can be billed to a Direct Bill (City Ledger) account by posting a DB payment in the folio.
   
   
2. Each folio must have a zero balance prior to check-out. If money is due from the guest, group, etc., then a payment has to be posted. If payment is to be made at a later date, then a Direct Bill (City Ledger) account should be set up for the customer. Then a DB (Direct Bill) payment is posted into the folio, bringing the folio to a zero balance.
   
   
3. Charges are posted into the folios in the following ways:
   • Automatic postings from Account Charges made in POS.
   • Automatic postings made from interfaces such as movies or call accounting.
   • Night audit room and tax postings.
   • Manual postings by staff.


4. At Night Audit, Direct Bill (City Ledger) transactions are created for each customer for each DB posted during the business day. A payment type (DB) to the folio has now become a charge in City Ledger. These transactions sit in a batch until updated.
   
   
5. The following day your A/R employee will view and update the transaction batch. If you’re using Execu/Tech’s Back Office™ Accounting software, General Ledger entries will be created when you update the City Ledger batch.
   
   
6. Monthly, or at your preferred interval, your A/R employee will print reports and also will send Statements to your A/R customers showing each unpaid transaction and the amount due.
   
   
7. Your customers will then send you payment by check, credit card or other method, and your A/R employee will post those payments into the customers; accounts. You will be able to print reports showing your total receivables, the amount due from each customer, and transaction details.

​

Execu/Touch POS with Hotel:

1. An Account Charge payment type is selected in POS. A Master Folio is selected. This is where the charge will post. POS is now finished with this transaction. A payment type (Account Charge) in POS has now become a charge in Hotel. The POS check was successfully closed, but money has not yet been received.


2. In Hotel, a DB payment is posted to the Master Folio. A Direct Bill (City Ledger) account is selected.


3. At Night Audit, Direct Bill (City Ledger) transactions are created for each customer for each DB posted during the business day. Front Desk and Night Audit are now finished with this transaction. A payment type (DB) to the folio has now become a charge in City Ledger.


4. The following day your A/R employee will view and update the transaction batch. If you’re using Execu/Tech’s Back Office™ Accounting software, General Ledger entries will be created when you update the City Ledger batch.


5. Monthly, or at your preferred interval, your A/R employee will print reports and also will send Statements to your A/R customers showing each unpaid transaction and the amount due. Your customers will then send you payment by check, credit card or other method, and your A/R employee will post those payments into the customer's accounts. You will be able to print reports showing your total receivables, the amount due from each customer, and transaction details.


6. See Direct Bill - Execu/Touch POS Interface

Execu/Touch™ POS without Hotel (Stand-alone POS):

1. When closing a POS check, the payment method A/R CHARGE will be selected. Your cashier will select the appropriate City Ledger customer. The POS check will close, and a charge will be posted into City Ledger for that customer.


2. Your A/R employee will view and update the transaction batch. If you’re using Execu/Tech’s Back Office™ Accounting software, General Ledger entries will be created when you update the City Ledger batch.


3. Monthly, or at your preferred interval, your A/R employee will print reports and also will send Statements to your A/R customers showing each unpaid transaction and the amount due. Your customers will then send you payment by check, credit card or other method, and your A/R employee will post those payments into the customers accounts. You will be able to print reports showing your total receivables, the amount due from each customer, and transaction details.


4. See Direct Bill - Execu/Touch POS Interface.

Wholesalers are handled through Direct Bill.

Membership Billing: the setup for Membership Billing creates a different configuration than normal hotel Direct Bill / City Ledger.  It is unlikely you will need the Membership Billing feature, but it is included in this documentation for properties needing it.

NOTE: Execu/Tech Systems does not give accounting advice. If you are unsure of what to do as related to setting up accounts or posting transactions, you should consult your accountant.