The hotel operates non-stop – 24 hours a day for seven days. Maintain the check-in and check-out load, respond to different types of customers and optimize occupancy are common challenges that hoteliers are used to. For proper operation, the front office must regularly review and verify the accuracy of the accounting records. The night audit is the process that aims to meet this need.
What is the night audit process?
The night audit, by definition, is a daily review of accounts receivable transactions recorded at the front desk against revenue transactions. This accounting practice ensures that all hotel departments operate in sync. He also ensures the reliability and rigor of front office accounting. Since the front office audit also includes active non-guest accounts.
A successful hotel night audit process balances guest and non-guest accounts. It also maintains a record of account statements, assists in monitoring account credit appropriately, and provides timely reports to management. Regular nightly audits increase the likelihood of proper settlement of accounts.
Prior to the introduction of automated front office systems, the preferred time to audit was late at night or early in the morning. Since customer interaction was kept to a minimum and front office auditors could work uninterrupted, it became known as “night audit”.
Night Audit Functions – It is common practice for most hotels to have a “accounting day or hotel day”. This is defined as the hotel’s daily charging period. The night audit closes the books on one hotel day and opens the books on another. The primary purpose of an overnight audit is to verify the accuracy and completeness of client and non-client records. But it also helps to perform the following additional functions:
- Verification of guest and non-guest account entries.
- Balancing of all front office accounts.
- Resolve room status discrepancies.
- Monitoring of customer credit limits.
- Produce operational and managerial reports.
What is a Night Auditor?
Performing the night audit requires attention to detail, especially with accounting. An overnight auditor is an experienced hospitality professional who is familiar with the nature of cash transactions that affect the front office accounting system. He is also responsible for any discrepancies that may arise during the audit. Night auditors are masters of finance with a deep understanding of hospitality functions. Most often, night auditors are senior front desk staff like managers.
What does a night auditor do?
Typically, a night auditor tracks room revenue, occupancy percentages, and other standard operating metrics. In addition to this, the auditor prepares a daily summary of cash, check and credit card activity that took place during the day at the front desk. These figures reflect the financial performance of the front office. The night auditor also summarizes and reports the results to front office management. The hotel’s accounting department (which is primarily responsible for back-office auditing) may also use night audit data to prepare additional statistical analysis.
What is the night audit display formula?
Regardless of how the night audit is performed, the basic accounting formula applies:
Previous balance + debits – credits = net outstanding balance
PB + DR – CR = NOB
The night audit process – The nightly audit process focuses on two main areas: finding front office accounting errors (if any) and creating accounting and management reports. From an accounting point of view, a night audit makes it possible to ensure that the accounts of the front office correspond to the data of the back office thanks to cross-checks. Discrepancies found during an overnight audit must be corrected so that the front office accounting system is balanced.
The following standard steps are common to the sequence of an overnight audit:
- Complete outstanding assignments.
- Reconcile the differences in the status of the rooms.
- Balance all department accounts.
- Check room rates.
- Check no-show reservations.
- View room rates and taxes.
- Prepare required reports.
- Prepare cash register receipts for deposit.
- Erase or back up the system.
- Distribute reports.
Night audit procedures can be performed manually, mechanically or electronically. If you are using an automated computerized system, some of these steps may be combined.
Simplified overnight audit with Hotelogix – If you’re using traditional or manual systems, the entire nightly audit process can become tedious and time-consuming. The Powerful Hotelogix PMS allows you to automate this process and easily double check all records sent to the front desk. Hotelogix’s integrated system allows the night auditor to spend more time auditing transactions and analyzing front office activities than accounting.
Benefits of using Hotelogix PMS –
- Easy monitoring: Because Hotelogix offers an automated system, you can balance accounts and verify account entries with a simple procedure. Hotelogix’s intelligent system compares audit data from guest register and other registers with front office daily report for balancing. When these documents are out of balance, it is usually an internal computer problem or an unusual data processing error.
Keeps transaction history:
Hotelogix’s cloud-based accounting system stores previous balance information for customer and non-customer accounts, along with relevant transaction details in its electronic database. You can train your front office staff in minutes on the data needed to perform an overnight audit process automatically or do it manually.
Hotelogix editorial staff
Hotelogix’s team of researchers and writers are constantly innovating to share the latest trends in the travel and hospitality industry. Do you have suggestions ? Write to us on [email protected]