Accounts receivable represents money owed to a hotel by its customers. To monitor how customers are paying their bills, hotels need to age the accounts and perform an aging schedule. This schedule is a table that lists the names of the customers, the unpaid account balances, and the number of days the accounts are outstanding. Unpaid account balance is the amount of funds that customers owe or have not paid to the hotel.
Normally, the days are categorized into 0 30 days (current), 31 60 days, 61 90 days, 91 120 days, and over 120. Some hotel companies may categorize these accounts in 45 day intervals. The aim of the hotel is to keep all accounts 'young' so that they will not be aged. An aged account has a higher probability to become a delinquent account.
Once the amounts of these categories or columns are totaled, estimated percentages of uncollectible, based on historical data, are multi plied to the totals to estimate the dollar amount that may be delinquent. This trend of accounts receivable balances, uncollectible amounts, and credit terms should be tracked over time and analyzed so that the liquidity of the hotel company will not be compromised.
Cote, R. (1991). Understanding Hospitality Accounting II. Michigan: The Educational Institute of the American Hotel and Lodging Association.
Weygandt, J., Kieso, D., & Kell, W. (1996). Accounting Principles. New York: John Wiley & Sons, Inc.
AGNES LEE DEFRANCO
UNIVERS ITY OF HOUSTON, USA