The front office of hotels, motels, and other lodging establishments is responsible for handling guest check-in and check-out, managing reservations, and providing customer service.
However, another critical function of the front office is the night audit, which typically takes place overnight when the day’s business has ended.
So the considering the this in this post I will tell you What is night audit in Front Office? It’s process , Importance and the different types of Reports that are generally generated during the night audit process.
What is Night Audit in Hotel ?
In a hotel, night audit is the process of reviewing and reconciling the day’s financial transactions, occupancy statistics, and other important data to ensure that all records are accurate and up-to-date. Typically, the night audit process is carried out by a designated night auditor, who is responsible for overseeing the audit and preparing reports for management.
The night audit typically takes place at the end of each day, after the front office and other hotel departments have closed for the night. The night auditor will review various reports, such as the daily revenue report, room status report, and guest ledger, to ensure that all transactions and room assignments are properly recorded and balanced.
In addition to financial transactions, the night auditor may also review other operational aspects of the hotel, such as room cleanliness, maintenance issues, and staffing levels. This information can be used to identify areas of improvement and to make adjustments to operations as necessary. Ultimately, the goal of the night audit is to ensure that the hotel is operating efficiently, effectively, and in compliance with established policies and procedures.
Night Audit process in Hotel, Front Office
Basically six steps involved in preparing a night audit in hotel that are –
1. Posting room and tax charges
After the night auditor has reviewed any messages from other front office staff, reviewed guests who checked out of the hotel, extended any guest stays, reviewed all Room Rates, and printed a variance report, his or her first task is to post room and tax charges to all accounts. The PMS can easily post room and tax charges to the electronic folios, with the room and tax options.
2. Assembling guest charges and payments
The various modules in a PMS (food and beverage, call accounting, etc.)
Allow for ease in assembling guest charges and payment.
3. Reconciling departmental financial activities
The departmental totals option of the night audit module in the PMS will report the totals of sales by department, These totals are compared to posting information received from the point-of-sale system.
4. Reconciling the accounts receivable
The city ledger is an accounts receivable held at the front office. the city ledger is a collection of guest accounts of persons who are not registered with the hotel.
They have either received approval for direct-billing privileges or paid a deposit on a future banquet, meeting, or reception.
The night auditor will treat these accounts just like the accounts on the guest ledger for registered guests. He or she must assemble the charges and verify their accuracy. The cash received from these accounts is reflected in the cashier’s report.
5. Running the trial balance
A trial balance is a first run on a set of debits to determine their accuracy Against a corresponding set of credits. The trial balance helps the night auditor focus on accounts in which charges may have been posted or reported incorrectly. For that reason.
It is important that the night auditor compare the departmental totals against any transfers and paid-out slips for each department processed by desk clerks and front office cashiers.
6. Preparing the night audit report
The night audit report is usually organized to meet the needs of a specific lodging establishment. Some general managers might require more financial data than others.
Importance of Night Audit in Hotel
The night audit provides insight into how each department must be monitored to produce an acceptable income statement.
The front office manager will be able to monitor the credit activity of guests, project daily cash flow from room sales, and monitor projected and actual sales for the various departments.
The audit process will also provide the necessary objective overview to evaluate the hotel’s financial activity.
Night audit helps to detect any errors or fraudulent activities in financial transactions. This ensures that any discrepancies are identified and resolved promptly, and that the hotel’s financial integrity is maintained.
Night audit ensures compliance with legal and regulatory requirements, such as tax reporting and record keeping. This helps the hotel avoid penalties and legal liabilities.
The night auditor helps to identify areas of operational inefficiency, such as wastage of resources or unproductive staff time. This information can be used to improve operations and reduce costs.
Based on that review, the general manager must determine how it should be adapted to meet the expenses and profit goals for the accounting period.
Ultimately, the night audit allows general managers to make good financial decisions based on current and cumulative data.
Types of Night Audit Reports
Night audit reports are important financial documents that summarize the activities and financial transactions of a hotel during a particular day or night shift. The types of night audit reports can vary depending on the specific needs and requirements of the hotel, but some common types include.
Daily Revenue Report – This report summarizes the total revenue generated by the hotel during the night shift, including room revenue, food and beverage revenue, and other sources of income.
Occupancy Report – This report provides an overview of the hotel’s occupancy rate during the night shift, including the number of rooms sold, the average daily rate (ADR), and the revenue per available room (RevPAR).
Accounts Receivable Report – Gives the lists all outstanding balances owed to the hotel by guests and other parties, such as travel agents or corporate accounts.
Cashier’s Report – This report details all cash and credit card transactions that occurred during the night shift, including sales, refunds, and voids.
Night Audit Summary Report – Provides a comprehensive overview of all financial transactions that occurred during the night shift, including revenue, expenses, and other important financial data.
General Ledger Report – Reports contains lists all financial transactions that occurred during the night shift, organized by account category, such as room revenue, food and beverage revenue, and operating expenses.
Manager Report – The manager’s report Is a listing of occupancy statistics from the previous day, such as occupancy percentage, yield percentage, average daily rate, RevPAR, and number of Guests.
