Setting Up Direct-Bill Accounts For Frequent Guests Of A Hotel

Many business travelers staying in a hotel during the workweek are repeat customers of that particular hotel. Although leisure travelers are highly valued on weekends, individuals associated with local companies are likely to provide the bulk of revenue for many hotels. Hotel managers can meet the expectations of frequent business travelers by setting up a direct-bill account for their company.

Hotels not located in tourist destinations are largely dependent on the ongoing economic vitality of local institutions. A large manufacturing plant is likely to bring in one or more individuals each week from out of town. Your hotel is likely to host several repeat guests each week, so direct billing provides a convenience for both them and their company.

Expectations of frequent guests

Direct billing is a routine business practice. Established companies in your area are likely to have direct-bill accounts with a variety of other service providers. From the perspective of your hotel, unpaid direct bills owed to the hotel are referred to as accounts receivable.

A drawback to direct billing is the delay in receiving payments. With credit or debit cards, your bank account is credited shortly after you transmit the charges to your card clearinghouse. With direct billing, you are essentially dependent on the speed at which each company chooses to pay down its outstanding balance.

Direct-bill application form

Direct billing is similar to extending a line of credit, so your hotel should adopt a suitable direct-bill application form. On the application, an applicant organization should indicate how each direct bill is to be sent to them. A contact person for the applicant organization should also be listed. Direct billing provides convenience for your guests, but you must ensure that payments are sent to you within a reasonable period of time.

Accounts receivable aging

Some companies may strategically delay outgoing payments in order to manage their cash account. You can gain a better overview of all direct-bill balances by producing a report that categorizes accounts receivable aging. The report provides immediate insight as to whether any particular company needs to be contacted about a lingering balance.

If a hotel room is not occupied overnight, that potential revenue is lost forever. For that reason, negotiated rates for frequent guests are sometimes lower than published room rates. Even if you agree to a slightly lower direct-bill rate, the resulting rise in occupancy levels may improve profitability. Contact an accounting service for more assistance in setting up and managing hotel direct-bill accounts.