Name: Agdangen, Jonathan G.

Course & Year: BSHM II

Subject: FRONT (LEC) Date: 12-10-2020

I. Definition of Authorization letter (5 points)

An authorization letter means the written confirmation of a person's rank, authority, or ability to

enter into a legally binding contract by taking a specific action, spending a specified sum, or
delegating his/ her duties and powers. These types of letters cover a wide range of intentions
and responsibilities.

"Letter of authorization" is a very broad term that refers to any letter in which one person or
business grants another person or business the authority to act on their behalf. Similar to a
POA, the person or entity that creates the letter of authorization is called the principal and the
person or entity holding the power to act for the principal is called the agent.

A letter of authorization is useful in different situations. In both, the main purpose is usually to
create a written record of authority that has been granted to an agent for a limited purpose.

Letters of authorization are used in personal and business settings. For example, in business, it
serves as documentation that a person, such as the company's secretary or attorney, is
authorized to act on behalf of the business. In a personal setting, many race directors require a
letter of authorization if someone other than the person running the race will pick up their race
packet.

II. Proper Handling of Authorization letter in the Front Desk/Cashiering (20

points)

To establish procedures for the approval of Bill to company or direct Billing privileges for a
company or  travel agent. And also to outline procedures for handling Direct Bill accounts.

1.  If a company wishes to obtain direct billing or credit facility privileges with the hotel, then
the hotel sales team must first submit a letter of Authorization for “Bill to company" to the hotel
credit manager or to the financial controller of the hotel along with the signed CVGR letter.

2.  The "Letter of Authorisation for Bill to company or Direct Billing" must contain the
following:

 The letter must be on company or travel agent letterhead.

 The letter must include the names of all individuals authorised to sign.
 The name of the individual who will receive and approve the statement.
  The types of  charges for which the company had agreed (i.e., accommodation charges
(room + tax + service charge), sign for all charges, etc.)
 The correct billing address of the company / travel agent.
 The contact details email / phone / fax number of the company.

3.  Copy of these letters are kept on file for future reference. One copy is sent
to Reservations  and one copy is sent to the Front Desk.

4.  Accounting department then assign an AR (Accounts receivable) ID on to the company or

travel agent profile to enable Bill to AR or Credit settlement on the PMS.

5.  Direct Bill authorisations may be kept on file for companies that make large numbers of
reservations. The credit manager then sends the statement of account to the company on a timely
basis for clearance.

6.  If a company becomes delinquent in payments, it is the responsibility of the Accounting Office
to notify Reservations and the Front Desk that Direct Billing privileges are black listing such for
company. 

7.  All credit facilities are to be suspended until full payment is received from the company. At
that time the Controller must make the decision as to whether to re-instate Direct Bill privileges
for the company.

III. What will you do if a guest wants to charge his bill to his company but the
authorization letter has not been forwarded before or during check in? (20
points)

Document the conversation, a guest might end the conversation by walking out without signing
for the charges. In this case, it is likely she will dispute the charge with the credit card company.
These disputes -- called chargebacks -- can take weeks to show up and even longer to resolve.
By the time a clerk is asked about the circumstances, the particulars might be hazy or missing. If
a hotel can present a credit card company with documentation about the problems and
suggested resolution, it can sometimes keep the guest refund from being permanent. Especially
in cases of refusing to pay for a hotel bill, credit card companies tend to uphold charges for
services that were used. When guests indicate during registration that they will pay their bills with cash
or a personal check, the front desk clerk should immediately be on the alert. Such a guest may very well
charge everything during his or her stay (perhaps only one day in length) at the hotel and then exit
without paying. Consequently, most hotels require cash in advance from guests who choose this method
of payment, since the guest has not established any credit rating with the hotel. In addition, close
monitoring by the night auditor and front desk clerks of the guest’s charge activity is in order. Such
guests will not be allowed charge privileges at other departments in the hotel. In properties with a PMS,
the guest name and room number will be entered to block charges at point-of-sale areas. In a hotel
without food and beverage, gift shop, and health club POS terminals, the front office will have to alert
those departments that this guest has not been extended charge privileges