Credit Policy

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Credit Policy

Bài gửi  Admin on Fri Oct 05, 2012 9:04 pm


The Credit officer plays an important role as far as the implementation of the hotel’s credit and collection policies and procedures are concerned. Some of the task of the Credit officer are: to conduct credit investigation to have an independence appraisal of the customers worth , character and ability to pay to justify extension of credit; to follow up collection of accounts regularly, and to report directly to Financial Controller and General Manager all matters concerning credit and collection.


As a general rule, no credit facility should be extended to any company or individual unless there is a prior arrangement made with the hotel. By prior arrangement would mean that application for credit has been processed and has passed the approvals by the following:

· Sale Manager/FOM
· Financial Controller
· General Manager

1) INDIVIDUAL (local and foreign)

No credit will be granted to any individual or personal account without approval from the General Manager. A personal credit application form should first be accomplished. In the urgent case when General Manager is not available the FOM or Duty Manager can call GM and then temporary provide credit, but later must get the approval of GM and immediately inform Credit officer.

Any credit that provided without approval form GM will be charged to responsible person if the money can not be collected


Local travel Agent

Extension of credit to travel agents is something that must be carefully handled with tact and judgment to protect the interest of the hotel. The following are necessary for the extension of credit to travel agents:

Interested company must accomplish Application form and submit business documents as required by the Hotel. The Application form must be signed by either the President or the General Manager or Vice President Finance or its duly authorized officer of the company
b. The Credit officer shall conduct a credit investigation with other hotels, with banks and trade suppliers to have a view of the applicant’s credit status with other entities.
c. The Financial controller will prepare his recommendation based on the report of the credit investigation conducted.
He may either :

- Recommends approval to General Manager.

- Disapproves the application and inform in writing the applicant as to the reasons of such recommendation.
d. Upon approval of the application, an account number is assigned to the company and an advise will be sent to the client regarding the status. The name of the client must be added accordingly to the list of accounts with credit line.

The letter of advise must include details in making reservations for room and banquet functions and of the account billing and collection procedures. To protect the interest of the hotel, the letter must also include a provision for suspension of credit facility due to default in the payment of account or permanent termination of contract because of accumulated outstanding balances.

Foreign travel agent
Foreign travel agencies which are considered good market potential are recommended by the Marketing and Sales Department for the credit privilege in the Hotel. The Sales staff obtains information through sales blitzes and or through other hotels that he get relation.

In addition to the information provided by the Marketing and Sales Department, the Credit Officer also conducts his own investigation with other hotels in Phu Quoc and with other hotels where the travel agency office is located. Based on the acquired data, the Credit officer prepares his report as to the approval/disapproval of the recommendation from Sales. The Sales Department is formed of the result and the travel agency is advised in writing.

3) COMPANIES (local and foreign)
The following are the procedures in extending credits to companies:

a. Interested companies must accomplish Application Form and submit business documents if necessary. The application must be signed by the President/General Manager/Financial controller or its duly authorized officer of the company.

b. Personal inquiry, referrals of any other mode of investigation may be conducted by the Credit officer to gather information about the credit standing of the prospective company.
Financial controller may recommend approval /disapproval of the application depending on the results of the investigation.
c. If application is approved, the company shall be informed accordingly through letter of advise.


Generally Embassies are extended automatic credit accommodation, either in room or banquet function bookings upon submission of a Certificate of Availability of Funds and a Letter of Authorization specifying the charges being covered by the agency. The Credit extended is up to the amount certified by the accountant or Finance Officer of the said government agency. Government agencies however are automatically placed on cash basis regardless of the submission of the required documents in the event of delinquency in the settlement of their outstanding balances as determined by the Credit officer.

A contract of the Merchants Agreement must be approved by the General Manager prior to the acceptance of a new credit card in the hotel. The approval of the General Manager will be based on the recommendation of the Credit officer and the Controller.

General Procedures in accepting Credit cards as method of payment.
Check whether the kind of card is acceptable to the hotel (see list cards acceptable by the hotel)
b. Check whether the card is not expired.
c. Refer to the latest cancellation bulletins and EDC machine to make sure that the serial no. is not found in the cancelled/stolen cards. If cards are found to be dishonored or invalid, request from the guest to surrender the card; if it is found to be stolen, Duty Manager should be discreetly notified.
d. Ask the cardholder to sign the guest account, restaurant check, and verify this signature against the signature shown on the card. This is extremely important as most of our losses due to fraud as a result of failure to verify signatures.
e. In case of any discrepancy in signatures, additional identification should be presented.
f. Authorization code should be obtained if the agreed floor limit has been exceeded.


Full and Local expatriates, officers and employees have their respective entitlement and privileges as stated in the Policy of entertainment. However, all extras (charges not mentioned as privilege or amount in excess of the limit) shall be billed accordingly to officers/ employees’ individual city ledger. Settlement of the amount is through automatic salary deduction at the end of each month.


Generally, all registered house guests are granted temporary credit during their stay in the hotel. They are privileged to sign for charges incurred in the hotel’s restaurant and service outlets. Exception to this is guests on Cash Basis status who are not allowed to incur charge accounts in the hotel. These guests normally pay a deposit /prepayment for the estimated no. of days they intend to stay in the hotel. There are cases wherein the guest may be categorized as cash basis although they do not make any deposit upon check-in. However this matter should be referred to the Credit officer for appropriate action. Once these guests are recommended by the Credit officer to be placed in cash basis, the Front office should always put a code on their folios for easy reference.

While the ultimate responsibility for the granting of credit lies with the General Manager, the Controller and the Credit officer are in a position to actively influence credit decisions by identifying problems on accounts, negative trends and potential credit risks, early enough to avoid significant losses.

Procedures to follow for hotel guest allowed for credit:

a. Set a Pre-Authorization/Credit code. This will serve as a credit limit to be entered in the guest folio. The pre-authorized amount is based in the estimated no. of days guests intend to stay on the hotel, multiplied by the room rate plus other incidental charges which the guests may incur during their stay in the hotel.

b. From time to time monitor the balances in the guest folio whether the amount exceeds the limit, if so, ask an additional pre-authorization or credit code from the guest.

c. Properly monitor the daily credit check report to be generated from the system.


This part will serve as a guide to the other departments which its functions will in one way or another, affect the Credit Officer. Being a service establishment, the function of the various departments of the hotel must be linked with each other to avoid inconsistency in the application of policies and procedures and to achieve a common goal which is providing the clients with service of top caliber.
These departments are:

· Sales and Marketing
· Front Office
· Food and Beverages

This department is very essential for it is where most of the hotel’s business is generated. Most of the accounts handled by Sales Department require special arrangement with regards to the settlement of charges and this is where Sales and Credit must work together. Generally the following procedures will apply in accepting individual or group booking from a person or company wherein charge account is requested.

Accounts with Credit Line:

Sales Department may grant credit to any group or individual booking originating from accounts which already have credit privilege in the hotel. Normally, no deposit is required. The Sale Manager handling the account must however request the client to send a letter prior to the arrival of the guests specifying the details of the booking authorizing the hotel to charge said booking to their credit account.
Although accounts with credit line in the hotel are normally not required to make deposit for their bookings, it is however ideal to request for one night deposit for each room booked for a group during the high season period to guarantee the space blocked. This deposit requirement can be waived at the discretion of the General Manager and Financial Controller with recommendation from the Sales Manager.

Accounts with no Credit Line

For bookings received by sales from clients with no credit facility in the hotel, full prepayment prior to the guest arrival must be requested unless charges will be fully settled by the guest upon departure (in this case, guest is considered as walk in guest and need a deposit). If payment will be in cheque, either personal or company, it should be made at least five (5) working days prior to the guest arrival to give to the hotel sufficient time to have the check cleared.
Whenever received the booking from clients with no credit facility in the hotel, Sale staffs must inform credit officer immediately by written (the reservation code, number of guests, number of room nights, service requested). The credit officer will daily review the reservation report, informs to sale manager 5 days before arrival of guests for requesting of deposit as the deposit has not been received, and informs FOM 1 day prior to the guest arrival for requesting deposit directly from guests as the travel agent failed to submit the deposit.
In instances wherein the Sales Manager would like to accommodate the request of the client for a charge account, he must obtain credit approval in advance from the management. All requests for credit facility in the hotel must be endorsed to the Credit officer for proper input of data specifically, the billing set-up. This is more important to group bookings which must be fully discussed to the group coordinator for proper check-in/ check-out procedures/billing. In cases where the rates quoted to clients for hotels services are stated in a foreign currency, the rate of exchange to US dollar as set forth in the system must be used when paying. This policy must be noted in the sales contract to avoid possible disputes concerning foreign exchange transaction.
Open communication and close coordination between Sales and Credit is a must to obtain satisfactory results in sales, billing and collection. It must be pointed out that a sale cannot be considered a sale unless the account is fully paid and the hotel and client are both satisfied with the outcome.
If sale staffs offered credit to accounts with no credit line without approval from GM, he will be charged for the money can not be collected.
Cancellation procedure.
Cancellation procedure that mentioned on the contract must be strictly followed. Any cancellation must be don’t by fax, and signed by a responsible person from clients.
Any reducing or waive for cancellation or no show charge must be approved by GM


This is a very important department as far as hotel’s credit control is concerned. Thus it is essential that the following policies and procedures be strictly adhered by each section in this department.


Individual booking:

When a booking is received by mail, telephone, telex, or fax, the person who made the booking must enter all pertinent details to the reservation system.
In the event a telex /fax/mail reservation is received incomplete, every effort should be made to obtain such information prior to the arrival of the guest. In instances wherein time does not permit request for additional information, the person who made the reservation must enter all comments (through traces) to the computer to advise the Receptionist to request the details upon check-in of the guest. This is specifically important with regard to billing arrangement details.
For the billing instructions such as Pay Own Account (POA); Bill to Company (BTC); or Bill to Agency (BTA), all reservations should be guaranteed, if not it shall be cancelled at 6 p.m. (release time). To guaranty a reservation, the guest shall send a copy of his credit card, and shall sign below the statement that he will guarantee with his credit card.

Group booking:

The same reservation details as in individual booking must be acquired for groups. Group bookings however require billing set up which are more complicated than that of individual reservation. Check-in and check-out requirement of group bookings are exclusively handled by the Reservation.
The Reservation staff must create a Master Folio (PM) for every group/ organizer unless otherwise requested by client that a separate folio be maintained for each member of the group. He must input all required codes for correct posting of charges and accurate transfers to the master folio. The Reservation staff must provide the credit department all important details about the group, through billing and routing instruction in the system.


Guest arriving with reservation

When a guest check-in, the receptionist should request the guest to complete the Registration card. If the guest is pre-registered, the receptionist must request the guest to check the information written in the form. A guest registration card is a source of valuable information, therefore, the receptionist should always ensure that all information is complete, clear and legible. Once the registration card is filled up, the receptionist should compare the name, signature, address with the guest passport to ensure accuracy of the information. At the end of the process, the receptionist will enter all information about the guest to the computer such as the address, method of settlement, check-out date, required services and other relevant data.

Guest arriving without reservation:

If guest settle in cash/traveler cheque :

For walk-in guests, the same check-in procedures on guests with reservation must be followed. Guest shall also be required to pay deposit equivalent to the estimated number of days guest wishes to stay in the hotel with an additional amount to cover restaurant and incidental charges.
If the guest settle by credit card
If guest shall settle account through credit cards, the receptionist should ask the card from the guest and make the Pre-Authorization/ Credit Code to cover the expenses guest may incur during his stay in the hotel. Whatever amount shown at the slip from the EDC machine will serve as a credit limit. The guest folio shall be monitored daily by the Duty Manager and Credit officer through the credit check report which can be generated from the system.

Below is a sample on how to compute the estimated expenses the guest may incur for purposes of getting the Pre-Authorization/ Credit Code

Room charges US$ 200.00 per day

Incidental expenses US$ 50.00

Total expenses per day US$ 250.00

Plus 10% tax 25.00

Plus 10% Service charges 25.00

Total per day US$ 300.00

Multiplied by (no. of days guest intends to stay) x 10 days


If the guest refuses to pay for the extra deposit to cover the incidental charges, it will have to be cleared to him that he will not be allowed to sign in the outlets and mini bar and in any outlets. All outlet charges will be in cash basis only. Cash basis information will be relayed by the Receptionist / Cashier to the outlets through a code that will be assigned into the folio.

Group arrivals:

Prior to the arrival of the group, the Receptionist / Cashier and other concerned staff must be briefed by the Group Coordinator as to the details of the booking, specifically the method of settlement. This will inform the clerks whether to ask deposit or not upon check-in of the guests or whether to demand payment or not upon check-out.
Separate master folio must be opened for each group wherein details of acceptable charges are indicated. Extra folio must be opened for each group member for charges payable personally by the guest. If the group is on cash basis, proper credit code must be assigned on each individual folio.
The group coordinator and the Receptionist / Cashier must ensure that all guest are properly registered and that all necessary details are entered completely and accurately in the computer.

Guaranteed booking:

Guest with guaranteed reservation are pre-registered. Under this kind of booking, all guest who does not arrive as scheduled are automatically check-in and an individual folio is created. A “No-Show-Fee” equivalent for one night room charge is posted on the folio. Assistant Front Office Manager or assigned staff must check-out folios the following day. The receptionist guaranteed reservation are attached to the folios to support billing of the account and to facilitate collection.

Banquet Function

Separate individual folios must be created for each function for the posting of the advance deposit as well as the charges to be incurred and subsequent payment to be made. Payment of the deposit for the banquet event must be made by the reservation. The payment must be accompanied by Deposit Authorization issued by the banquet department. After posting the payment, the duplicate copy of the Deposit Authorization must be return to the banquet office. The original copy must be attached to the official receipt and be forwarded to Accounting Office.


Generally, the Policies and Procedures applicable to Sales and Marketing Department for extension of credit to clients should also be applicable to Banquet. However, the following additional guidelines would have to be observed.
1. A banquet Inquiry Sheet should first be filled up by the sales person. It includes the name of the company, contact person, address and telephone no., type of function, set up and audio equipment to be used.
2. A Banquet & Conference Contract shall be entered into between the representative of the company having the function and the Sale Manager. The contract may include the following:
· Complete name address and telephone number of the representative of the company/ group having the function.
· Number of events and complete function details (date, menu, price, audio equipment & other services) requested.
· Estimated no. of persons (the Banquet Manager can set a minimum and charges the client for the excess).
· Deposit requirement and method of payment for the balance.
· Cancellation procedures, penalty, and authorization letter for the company’s representative.
3. A Banquet & Conference Contract must be prepared by the Sale Department for distribution to all departments and sections concerned. The said contract shall state the name of the event, date, function room to be used, estimated billing amount and other billing instruction.
4. Upon receipt of the deposit, the Banquet staff must prepare a deposit authorization which will include details of the event where the deposit applies. The amount and the accomplished deposit authorization form in two copies must be forwarded to the reservation office for posting the individual Banquet Folio (PQ). All duplicate copies of the deposit authorization must be forwarded to the Banquet Department after posting. The original copy will be forwarded by the Receptionist/Cashier to the accounting office together with the official receipt.
5. In cases where the balance of the function is to be settled right after the function, cash or acceptable credit card should be requested, unless otherwise specified in the contract that the balance will be paid by the client in cheque. If a credit is used, proper acceptance procedure has to be followed by the cashier-in-charge.
6. In instances where the balance of the function on cash basis cannot be paid right after the event, the headwaiter has the responsibility of referring the matter to the Banquet Manager (during office hours) or to the Assistant Manager on duty (after office hours) who must assess the situation and may either:
· Request for cheque payment and written assurance from someone in the whom the client knows.
· Request for a guarantee such as personal property sufficient to cover the balance.
7. If the price quotation were stated in a foreign currency, the rate of exchange to be applied at time of payment must be clearly specified to avoid disputes concerning foreign exchange rate.

Banquet deposit and cancellation policies:

The deposit required for functions booked six (6) months or longer, less than six (6) months or less than three (3) months etc. Also the amount refundable from a deposit in case of cancellation of bookings.

Banquet booking :

· Banquet & Conference Office must coordinate with the Credit officer to determine the status of the account prior to acceptance of functions on credit.
· The Sale Manager shall be responsible for arranging the credit, but before executing an order, he shall in cooperation with Financial Controller, establish the credit status of the organizer.
· The method of payment and deposit received must be specified in the Banquet and Conference Contract.


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