Different Payment Methods In The Hotel Industry Finance Essay

Different earnings Methods In The Hotel Industry Finance EssayThe phases of defrayment studyed in hotels constitute changed over the years. Most hotels still accept a variety of rule actings of salary mainly so as to brook a service to their clients and to generate additional earnings through exchange. A large fleck of independent travellers now use some pee of credit or charge beak. Hotels are now very old(prenominal) with a wide range of brains, often with dual ownership (e.g. the HCIMA hand over their own version of Barclaycard). There go away always be a repress of other proceeding within the hotel regardless of the method of payment. These transactions will often be compensable through a number of other methods. Upon departure, guests so-and-so settle their account in single of a number of different ways propertyForeign bills tabTravellers draw offForeign hindrance debit entry cardCredit cardCharge cardLedger paymentVoucher (e.g. travel agent, A TO).In d ealing with each of these methods of payment, the hotelier mustiness assess the equal of three major factors liquidity, trade protection and worth.LiquidityIt is advantageous to the hotel if the account is paid in cash, as the hotel can immediately use the money to acquire goods itself, or bank the money and earn interest on it. Payment by ledger, however, will take much hourlong perhaps as much as deuce or three months may stall in advance the money can be re- apply in the business.2. SecurityThe two steads to security are as follows The likelihood of counterfeit or dodge by each of the payment methods.The subsequent insecurity of theft in one case the hotel has the money. Payment by cheque is a greater security riskiness than accepting cash in Payment of the account. It would be difficult to outline stolenCurrency if the hotel was robbed and cheques would unlikely is taken as they wont be of any(prenominal) value to a thief.WorthThe total amount of money the hote l generates in payment will non be the same in both case. Handling charges, commission and delays in payment will cost the hotel money. sole(prenominal) if because ofThe extra commission, accepting payment in foreign currency will comm besides mean that when guests use this method of payment, the hotel gains an extra profit. flurry 9.1 shows that the positiveness of the hotel may be affected by the variety of payment methods usedby the guestsMethod ofPaymentSecurityLiquidityWorthCashThe 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 twenty-four hour period102 %ChequeCheques carry a high risk of fraude.g. non-payment. If securitychecks are carried out, risk of theftis low.3 Days98 %Travellerschequecondom method of payment if controlchecks are carried out properly. low-toned 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 controlchecks 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 scoreedbefore 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 harsh methods of payment. It reflected the decline of payment method in cash in recent years. Cheque ensure cards justify the payment of the cheque to an agreed amount (usually 50 or 100). But there are a few saucer-eyed rules that filmto b e followed.The reassure provided by cheques guarantee cards are notwithstanding one cheque is used per transactionIt is signed in the strawman of the cashierThe bank code on the cheque and the guarantee card agreeThe card number is written on the repeal side of the chequeThe card has not expired.A bank does not guarantee to honor a transaction where an account of is paid by outlet two cheques of 50. The transaction is changed to a cash one by set the card number on the back of the cheque. The customer will indeed 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 below 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 no t correspond to any other number on the cheque.Expiry successionThe card will not be legitimate if it is out of age. feelingThe signature must be checked against the signature written on the back of the cheque. The card should be examined to make sure that the signature jury has not been tampered with.Crossed cheques are now mostly 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 leash party. In the case where a third party cheque is returned, the hotel has to contact the original drawer of the cheque to beat settlement. It is for this reason that hotels do not accept third party cheques. successionWhen accepting a cheque, the cashier should check a number of points, one of the most important being the epoch. A cheque that has a date in the future on it (a post-dated cheque) will not become valid until that date. A cheque to a greater extent than six months old (stale) is nolonger valid.Crossing C hequesThe 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 maximumValue 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 edifice societies throughout the world. The customer will need to purchase them (before leaving home) use 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 noteworthy 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 th e travellers cheques be stolen. It is for this reason that travellers cheques are found to be much more secure than currency. It is essential 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 Cards, Credit Cards and Charge CardsDebit CardsThe common alternative to cheques nowadays is debit cards such as flog and Delta. The way that it works is similar to that of cheque whereby the outstanding 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 billet notifying them of the details of the payment. This is usually the same card that is used to guarantee a cheque or wit hdraw money from a cash point. bank Credit Cards Visa and Access are the two major bank credit cards in the UK. These cards are usually issued for free 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 total amount of the account. The card company will organize 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 spell most countries use an additional name (e.g. Barclaycard in the UK Carte bleu in France), all cards carry the name Visa and chuck out the distinctive blue, white and gold s tripe logo (Fig. 9.5).