Thursday, September 16, 2010


Have you ever wondered what is involved in accounting for the operations of a cruise ship? Well I hadn’t either until I recently took a cruise around the Hawaiian Islands. You should have seen the look on the Cruise Director’s face when I ask to speak to the ships chief accountant. He said that was the most unusual request he had ever received. He was use to requests for tours of the bridge, the engine room or to speak to the captain, but never to speak to the ships accountant.

There are usually two accounting departments on a cruise ship; one that handles passenger accounting and the other that handles the general accounting duties for the ship and its employees.

I only got a very general overview of the ships accounting department, which for the most part was not the more interesting of the two departments. Some of the challenges they face include a work force from various states and foreign countries. This particular cruise ship had approximately 950 employees. Payroll is twice a month and employees room and board is provided by the ship. Employees work five months on, two months off, and then another five month rotation. One of the employees said it was really a great job since all of your expenses are paid and you are working almost every day for the five months so you never have time to spend your pay check. Sounds like a great job for a single person.

I was given access to the Assistant Financial Accountant who was in charge of passenger accounting for the ship. His name was Sergey. Sergey was a delightful young man from Russia who gave me the cook’s tour of the duties and responsibilities of his department. Passenger accounting had eight employees, including Sergey, that handle the accounting for some three thousand passengers. Sergey and his employees speak a total of eight different foreign languages in order to accommodate the international mix of passengers. The passenger accounting employees handle all passenger related accounting transactions from boarding to final disembarkation. Before boarding the ship you are required to establish an on board account and either provide a credit card or a cash deposit to cover any charges you might have while on board the ship. You are then issued a cardkey which give you access to your state room and also serve as a credit card for any purchases you make while on the ship. All purchases must be made using your cardkey. Cash is not accepted on board the ship. Sounds like a very good internal control.

Sergey’s group handles passenger registration including issuing your cardkey. His group is also responsible for checking every cardkey charge of every passenger to be sure that the charge amount is correct and that the passenger has not been over or under charged. Then at midnight each night all of the day’s credit card charges are uploaded. Any charges that are rejected for any reason have to be resolved by Sergey’s group. For charges that are rejected by the credit card company you will have to either provide a new credit card or a cash deposit before you may make any further purchases onboard. For deficient cash deposit accounts, an additional cash deposit or valid credit card will be required.

The ship is also required to collect state sales tax when in US waters. For example there is a Hawaiian sales tax and an Oahu Island sales tax that has to be collected when in Hawaiian waters within three miles of the island of Oahu. However, the ship is not required to collect state sales tax when it is in international waters. The moment the ship sails into International waters the bridge notifies the accounting department and sales tax collection is stopped. The passenger accounting department immediately turns off the calculation of sales taxes by the ships cash registers. When the ship crosses back into US waters the sales tax function is again activated.

At the end of the cruise the accounting department is responsible for settling up with each passenger. For passengers who have set up a credit card to cover their on board expenses they simply need to verify that all of the charges are correct. For passengers that have put up a cash deposit they will need to collect the balance of their deposit. Also, where a passenger has made a deposit in US dollars but is returning to a foreign country they try to refund the balance in the currency of the country to which the passenger is returning after the cruise. All balances must be refunded no matter how small the amount. Sergey said that once he had to track down a passenger that was owed a total of one cent. Oh yes, they won’t allow you to leave the ship at disembarkation until you have settled your account. Aloha.

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