CITY LEDGERGUEST LEDGER

In hotel accounting, both the Guest Ledger and the City Ledger represent accounts receivable (money owed to the hotel), but they differ based on whether the guest is currently registered and staying at the hotel or if the account belongs to a non-staying guest/third party.

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1. Guest Ledger (Transient Ledger)

The Guest Ledger tracks all financial transactions and balances for guests who are currently checked into the hotel.

• Who it covers: In-house guests currently occupying a room.
• Charges tracked: Room charges, taxes, dining/room service, laundry, spa services, parking, and incidental fees posted during the stay.
• Settlement: The account is settled upon checkout. Payment is made via credit card, cash, debit, or transferred to another account (such as the City Ledger).
• Key Characteristic: Active and temporary; closes out as soon as the guest checks out.

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2. City Ledger (Non-Guest / Master Ledger)

The City Ledger tracks accounts receivable for individuals or companies that are NOT active in-house guests.

• Who it covers:
  • Guests who have already checked out but have unpaid balances (e.g., waiting for credit card settlement).
  • Travel agencies and Online Travel Agencies (OTAs) that collect payment directly and are invoiced by the hotel.
  • Corporate clients and credit accounts billed on direct billing agreements (e.g., net-30 terms).
  • Event/banquet clients holding conferences or weddings.
  • Non-resident guests who use hotel amenities (e.g., gym memberships, local restaurant tabs).
• Charges tracked: Direct billing folios, master accounts for groups, chargebacks, and delayed charges.
• Settlement: Managed by the hotel’s accounting/finance department through invoicing and accounts receivable collection routines (e.g., 30-day billing cycles).
• Key Characteristic: Longer-term receivable ledger managed after or outside of the front desk guest stay.

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Key Comparison

Feature	Guest Ledger	City Ledger
Guest Status	In-house (Currently registered)	Checked out or Non-registered
Primary Responsibility	Front Desk / Night Auditor	Accounting / Accounts Receivable
Payment Terms	Paid/settled at checkout	Billed on credit terms (e.g., 15, 30, or 60 days)
Transaction Types	Daily room rates, incidentals, daily guest charges	Corporate invoices, OTA commission reconciliations, event balances

To illustrate how these ledgers function within an Accounting Information System (AIS), here are standard journal entries covering the lifecycle of both Guest Ledger and City Ledger transactions.

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Scenario 1: Guest Ledger Transactions

Transaction A: Posting Room Charges & Taxes (During the Stay)

When a guest is checked in, daily room rates and taxes are posted to their active folio, increasing the balance in the Guest Ledger.

Date	Account Title & Description	Ref / Sub-Ledger	Debit ($)	Credit ($)
Oct 29	Guest Ledger (A/R - In-House)	Room 405 (John Doe)	115.00
	Room Revenue	Operating Revenue		100.00
	Sales Tax Payable	Liability		15.00
Note:	To record daily room charge and tax for in-house guest.

Transaction B: Guest Settlement at Checkout (Paid via Credit Card)

When the guest checks out and pays their bill directly, the Guest Ledger account is cleared out.

Date	Account Title & Description	Ref / Sub-Ledger	Debit ($)	Credit ($)
Nov 01	Credit Card Clearing Account	Merchant Services	115.00
	Guest Ledger (A/R - In-House)	Room 405 (John Doe)		115.00
Note:	To record full settlement of guest folio upon checkout via credit card.

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Scenario 2: Transition from Guest Ledger to City Ledger

Transaction C: Direct Billing Transfer (Corporate Account)

If the guest is a corporate client with a pre-approved direct billing agreement, their checkout balance is transferred out of the Guest Ledger and into the City Ledger.

Date	Account Title & Description	Ref / Sub-Ledger	Debit ($)	Credit ($)
Nov 01	City Ledger (Accounts Receivable)	Acme Corp (Master Folio)	115.00
	Guest Ledger (A/R - In-House)	Room 405 (John Doe)		115.00
Note:	To transfer checked-out guest balance to corporate direct billing account.

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Scenario 3: City Ledger Transactions

Transaction D: Collection / Payment Received from City Ledger

The hotel's back-office accounting department sends an invoice to the corporate client (Acme Corp). When payment is eventually received (e.g., 30 days later), the City Ledger account is settled.

Date	Account Title & Description	Ref / Sub-Ledger	Debit ($)	Credit ($)
Dec 01	Bank / Cash Account	Operating Bank Account	115.00
	City Ledger (Accounts Receivable)	Acme Corp (Master Folio)		115.00
Note:	To record payment received from corporate client for past-stay invoice.