Pearson New International Edition International pcl tp indd 1

FRONT OFFICE SEMANTICS
Settlement (account):
Collection of a payment for an outstanding account balance. Settlement may
involve the guest paying cash or charging the account balance to a valid payment card or another hotel-
approved account.
If a departing guest pays the full amount owed by cash or check, the folio bal-
ance is reduced to zero. The cash amount is subtracted from accounts receivable (A/R
account) and is added to the cash account (also an asset account) to keep the account-
ing formula in balance. Payments made by a payment card are somewhat different
and are discussed in the next section. When a guest does not pay the full amount
owed, settlement is still necessary. This is done by moving (transferring) the remain-
ing guest folio (accounts receivable) balance to a different receivable account or by
transferring the remaining balance owed to a house account.