Cash, card, folio charge and corporate account: balancing four payment methods in one close

A street restaurant close has two columns: cash and card. The close of your hotel restaurant has at least four, because the guest signs to the room and the executive from the company with an agreement pays nothing that night. If the point of sale treats those four paths as if they were the same, the close balances on screen and balances nowhere else: not in the envelope, not at the bank, not in the PMS.

Why one close and not four

The temptation is to close cash with the cashier, card with the terminal, folio charges with the front desk and corporate accounts with the controller, each at its own time. It works until a check changes method halfway through: the guest who asked to charge the room and paid by card in the end, or the company check the server closed as cash because he could not find the agreement. With four separate closes, that check shows up in two places or in none.

A single close per revenue center solves that because it starts from one truth: total sales for the shift. Then it splits them by method, and the sum of the methods has to equal the sales. If it does not, the problem belongs to the point of sale, not to the cashier or the front desk. That equality is the first line of any serious reconciliation.

What changes between methods is not the close but what each column reconciles against. Cash reconciles against physical money, card against the bank, folio charge against the front desk system and corporate account against an invoice somebody will pay later. Four external sources, one internal document.

Cash: what it must add up to and what it reconciles against

The cash column adds every check paid in cash, minus change given, minus any authorized petty expense that left the drawer. It is the only column you can touch with your hand, and that is why it reconciles first: at closing, the cashier counts the drawer, sets aside the float and what remains must equal that column.

Its external source is the envelope dropped to the hotel’s general cashier. If the envelope holds 5,850 and the column says 5,900, there is a 50 shortage that is recorded as a count difference. Nothing else. Sales are not adjusted, the close is not “fixed”: the difference stays visible so the controller sees it with its explanation.

The typical cash mistake

Counting as cash the cash tip the customer left on the table. The tip is not hotel revenue and does not go into the sales drawer. If it does, the cash column is inflated and the envelope carries too much, and the controller spends an hour chasing an overage that actually belongs to the server.

Card: the voucher, the terminal batch and the bank

The card column adds every check closed by card, at the amount the terminal authorized, not the amount of the check. The difference matters when the customer adds a tip on the terminal: the check says 800, the voucher says 900, and only 800 are sales. The remaining 100 are a card tip and live in another column.

Its first external source is the terminal batch close, done at the end of the shift or the day, which lists every authorized transaction. The batch total must equal the card column of the close plus card tips. If the terminal says 9,300 and the close says 9,000 in sales plus 300 in tips, it balances.

The second source is the bank. Days later, the acquirer deposits the batch minus its fee. That reconciliation belongs to the controller rather than the shift, and to do it the controller needs every close to keep the batch number and the gross total. Without that, the bank deposit is a loose number nobody can tie to a night.

Folio charge: the consumption the front desk collects

Here is the column that does not exist in a street restaurant and causes the most trouble in a hotel. When the guest says “to my room, please”, the restaurant sold but did not collect. The consumption travels to the guest folio in the front desk system and is collected at check-out, in cash or by card, together with the room nights.

The folio charge column adds every check closed with that method, each with the folio number it was sent to, not the room number somebody typed. The difference between the two is the whole difference, as explained in the article about the text field (Room charge: why a text field is not enough): the room changes guest every day; the folio does not.

Its external source is the PMS. At closing, the front desk or the night audit produces the report of charges received from the restaurant, and that report must equal the folio charge column of the close, check by check. A charge that is in the close and not in the PMS is consumption nobody will ever collect. A charge that is in the PMS and not in the close is a guest who will complain at check-out.

The detail many hotels miss: folio charges reconcile the same day, not when the guest leaves. If you wait for check-out, the error has three or four nights to hide among other charges. The room charge page (Room charge) describes how the folio is verified before the charge is sent, which is half the job.

Corporate account: sale today, collection later

The last column belongs to companies with an agreement: the executive has dinner, signs, and the hotel invoices the company at month end. It is a sale of the shift, it goes into that night’s food and beverage report, but it is not a collection. It is a receivable, and the close must show it as such.

The corporate account column adds every check closed against an agreement, with the company name, the name of whoever signed and, if the agreement has a cap, how much of the cap was consumed. Its external source is the receivable in the hotel’s books: every close feeds a balance per company that the controller invoices and collects later, as described on the company accounts page (Master accounts and agreements).

The classic mistake here is closing the check as cash or as a folio charge “for now”. Closed as cash, the cashier ends the shift with a shortage that is not his. Closed to the folio of a room the company booked, the charge lands on the executive’s check-out, and the executive should pay nothing. Both get fixed with credit notes, and every credit note is an hour of the controller’s time.

The full close: an illustrative example

The figures are invented to show what a close with all four methods looks like and what each one reconciles against. They are not data from any hotel. The hotel restaurant sold 24,000 during the dinner shift, before tax and tips, split as follows:

Notice that only 6,000 of the 24,000 is money that touched the drawer. The 9,000 by card reaches the bank in a few days, the 5,500 on folios is collected by the front desk when the guest leaves and the 3,500 from companies is collected the following month. A manager who looks only at the envelope believes the restaurant sold a quarter of what it actually sold.

Also notice the 400 in card tips: they are in none of the four sales columns, and yet they are in the terminal batch. That is why card reconciliation is done against sales plus tips, never against sales alone.

When it does not balance: where to look, by method

A close that does not balance almost always fails in a single column, and each column has its usual place for errors. Before redoing everything, check these:

• Cash: petty expenses with no record, change lent to the front desk or another revenue center, cash tips that went into the drawer.
• Card: terminal tips counted as sales, a transaction authorized twice, a voucher voided on the terminal but not in the point of sale.
• Folio charge: a charge sent to a room whose guest already checked out, a duplicate charge from a retry, a check closed to the folio and then paid by card without reversing the charge.
• Corporate account: a signature with no active agreement, a consumption over the agreement cap, a check closed to the wrong agreement because two companies have similar names.

And the rule that saves the most time: the close is never adjusted to make it balance. The difference is recorded, explained and the cause is fixed the next day. A close that always balances because somebody balances it by hand is the most dangerous close in the hotel.

What to do this week

1. Look at last night’s close and confirm the four columns add up exactly to the shift’s sales. If the point of sale does not separate them, that is the first fix.
2. Ask the front desk for the report of charges received from the restaurant and compare it check by check with the folio charge column.
3. Take the terminal batch close and verify it equals card sales plus card tips.
4. List the companies with an active agreement and check that every corporate check of the week has a signature and an agreement behind it.
5. Agree with the controller that no difference is ever adjusted in the close: it is recorded with an explanation and the cause is fixed.

Inn Restaurant closes every revenue center with the four columns kept apart: cash against the float, card against the batch, folio charge against the PMS and corporate account against the agreement balance, with the reports the controller needs (Reports). If you would like to see the close with your hotel’s own sales, the fifteen minute demo is booked at (contact).