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Key terms and concepts
Note: any terms which appear in bold are also defined in the table below.
| Term or concept | Definition in the tourism industry |
|---|---|
| ABN | Australian Business Number. |
| American Express | A financial institution that offers credit card charge cards, traveller’s cheques and foreign currency exchange. |
| Amount tendered | The amount of cash the customer hands over to pay for the sale, eg if an item costs $40.00 and the customer hands over $50.00, then the amount tendered is $50.00. The change is then calculated. |
| AUD | Australian Dollar. |
| Bank cheque | A cheque issued by a bank. Banks charge an issue fee of between $8.00 and $16.00 per cheque. These are considered as good as cash because the bank will clear them as soon as they are banked, i.e. no clearance time is necessary. |
| Billing period | The frequency with which companies are invoiced for payment of sales accounts. Most accounts are billed monthly. |
| Business cheque | A cheque issued by a company – the same as a company cheque. |
| Clearance time | The amount of time it takes a bank to clear a personal or business cheque. The time varies from 3-10 days with different banks. |
| Company cheque | See business cheque. |
| Credit card authorisation | Authorisation given by the individual’s bank/financial institution to debit their card to purchase goods or services. |
| Credit limit | The maximum amount of money an individual can spend on their credit card. Credit limits given to individuals vary. |
| Credit note | A note issued to a customer to process a refund for unused products or services where an invoice or warrant was the form of payment used. |
| Currency conversion | The conversion of one currency to another
currency using an exchange rate supplied by a bank or
other financial institution such as Thomas Cook, American
Express, or Travelex. e.g. Australian Dollars to US Dollars. |
| Denominations | Money (notes and coins). A cash float requires a supply of different denominations, usually smaller denominations (e.g. $5, $10 & $20 dollar notes plus coins), so that there will be sufficient change for customer purchases. |
| Discrepancy | At the end of the day it is necessary to reconcile the daily takings. When the daily takings total according to the register and the actual cash/cheque and credit card totals in the register drawer do not match, there may be a discrepancy. In this case a recount should be done to ensure the error was not just in the counting. |
| EFTPOS | Electronic Funds Transfer Point of sale. This method of payment allows a customer to pay for purchases with a plastic card which instantaneously debits the amount of the purchase to the customer’s bank account through a Point of Sale terminal at the retail store. |
| EUR | EURO. The currency of the European Economic Community, which presently covers 12 European countries. |
| Exchange rate | The rate given by the bank/financial institution
to convert one currency to another currency. e.g. 1 $AUD 1.00 divided by $USD bank exchange rate of 0.572 = 1.7482517. This means that $1.00 USD will buy $1.75 AUD. |
| Float | The amount of money needed in the cash drawer at the beginning of the sales day so that the business can provide customers with change when they pay by cash. |
| Floor limit | The floor limit is the maximum dollar amount that a business can accept in a credit card transaction. If the amount is higher than the floor limit, telephone authorisation must be sought from the bank. Floor limits vary between different companies. Always ask a supervisor what the floor limit is if you are unsure. |
| Foreign currency | Currency of other countries. |
| Form of payment | Can be cash, cheque, credit card or invoice/warrant. |
| GBP | Great British Pounds. The currency of the United Kingdom, also referred to as Pounds Sterling. |
| Government warrant | Similar to an invoice where an account is held. |
| GST | Goods and Services Tax. GST of 10% is applicable to all domestic travel. International travel is GST exempt. |
| GST inclusive | Price quoted includes the 10% GST in the total cost. |
| Imprinter | Manual credit card transaction machine. |
| Invoice | The payment document issued to businesses that have an account with an organisation. Most invoices are issued on a monthly 'billing period' and will specify payment terms of 14-30 days. |
| Non-cash transaction | A transaction paid for by any form of payment other than cash. |
| Not negotiable | The term written across cheques to ensure that the cheque can only be paid out to the name actually written on the cheque. |
| Payment terms | The period of time given to provide payment for an invoice. Payment terms are usually 14-30 days. |
| Personal cheque | A cheque owned and written by an individual. Personal cheques usually require between 3-10 days clearance time. |
| Petty cash | A small cash fund set aside for miscellaneous business supplies, e.g. coffee, milk, postage stamps etc. |
| Petty cash voucher | Vouchers issued when a petty cash purchase is paid. The item receipt must be attached. |
| Receipt | The document issued when a customer pays for goods or services. It acts as proof of purchase. |
| Reconcile/ Reconciliation |
At the end of the day the amount of money in the register is counted. The amount left after the cash float is deducted is called the day’s takings. This amount (cash, cheques and credit cards) should match the register total. If it does, the day’s takings have been reconciled. If it does not reconcile, there may be a discrepancy. A recount should be done to ensure that the error was not just in the counting. |
| Refund notice | The document issued to a customer when services have been cancelled or products returned. |
| Sales account | The account held when a written agreement/contract has been made between companies who do regular business with an organisation. An invoice is issued on a regular basis (usually monthly) with payment terms of 14-30 days. |
| Suppliers | The principal businesses from which an organisation buys the goods or services it sells. |
| Takings | The amount of money collected for sales, e.g. daily takings. |
| Thomas Cook | A financial institution that offers traveller’s cheques and foreign currency exchange services. |
| Transactions | Money coming in and going out of a business. Receipts are money coming in; payment of bills is money going out. |
| Traveller’s cheques | A form of international currency that travellers can convert to local currency at a bank or exchange services such as Thomas Cook, American Express or Travelex. |
| Travelex | A financial institution that offers traveller’s cheques and foreign currency exchange services. |
| USD | United States Dollar. The currency of the United States of America |
| Warning bulletin | A list of stolen credit cards issued by the banks. |
| YEN | Japanese Yen. The currency of Japan |
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