Hotel finance · 6 min read
The hotel city ledger, explained
Short answer: The city ledger is the list of credit accounts a hotel bills after the guest has gone, usually companies, agencies, embassies and travel agents. When a guest checks out and the bill isn’t paid on the spot, the balance moves from their folio to the payer’s city ledger account until it is settled.
By the Biodux teamUpdated
“City ledger” is one of those hotel terms that sounds more complicated than it is. It’s the hotel’s list of people and organisations who owe money after the guest has left.
Where the name comes from
Hotels used to keep two books. The guest ledger held the accounts of guests staying in the house. The city ledger held everyone else who owed the hotel money: people and companies out in the city. The names stuck.
How a balance gets there
A typical example:
- A consultant checks in. Her company has an account with you and pays for the room and breakfast.
- During the stay, the room charge posts each night. Her bar and laundry go on a separate bill for extras.
- At checkout she pays the extras herself. The room balance is transferred to the company’s city ledger account.
- At month-end the company gets one statement or master bill for all its guests, and pays.
The guest’s folio is now closed. The company’s city ledger account shows what it owes.
Who usually has a city ledger account
- Companies that send staff to stay
- Government agencies, embassies and NGOs
- Travel agents and tour operators
- Event organisers and conference clients
- Sometimes regular guests you trust with credit
Keeping it under control
The city ledger is where a hotel’s cash flow lives or dies. These habits help:
Agree terms before the first stay. Credit limit, payment terms and who is authorised to book on account, in writing.
Separate the room from the extras. Most companies only pay for room and breakfast. Keep extras on a separate bill so you aren’t arguing about bar tabs on a corporate invoice. Biodux PMS does this with extra bills.
Transfer at checkout, not later. The longer a balance sits on a closed folio, the more likely it is to be missed.
Know the balance on any date. You should be able to answer “what does this company owe today?” in seconds. In Biodux, the city ledger shows balance brought forward and balances as at any date.
Review ageing weekly. Which accounts are 30, 60 and 90 days old? Chase the old ones before accepting new bookings on credit.
Reconcile with the accounts. The city ledger total in the PMS should agree with the receivables in your accounting system. In Biodux Accounts, the city ledger is one of the sub-ledgers, so the two agree by design.
Reports to check every week
| Report | What it tells you |
|---|---|
| City ledger balances as at today | Who owes what right now |
| City ledger detail per account | Every charge and payment, for disputes |
| Corporate master bill | One document per company for the period |
| Receipts list | What has been paid in |
Common mistakes
- Letting the front desk extend credit without a limit.
- Sending one huge invoice at month-end without detail, which invites disputes and delays.
- Keeping the city ledger in a separate spreadsheet that never agrees with the PMS.
Want to see the city ledger working in a real system? Book a demo, or read more about billing and city ledger in Biodux PMS.