Night Audit

UNIT 5 - NIGHT AUDIT  The night audit is a daily review of guest accounts and non-guest accounts having having activity activity, agai agains nstt reven evenue ue cent centrre tran transac sacti tion on infor informa mati tion on whic which h help helps s guarantee accuracy in front oce accounting. A successful audit will result in balanced accounts, accurate stateents, a!!ro!riate a!!ro!riate credit onitoring and tiely re!orts to anageent . Since hotels operate 24 hours a day, seven days a week, it is important to review an verify the accuracy and completeness of it’s accounting records. Whatever the mode of audit the audit routine would remain relatively relatively unchanged.  The audit is called a night audit ecause hotels hotels generally perform perform it at night.

"UN#TI$N% $" TH& AUDIT Speci!cally, the audit is concerned with" 

#erifying posted entries

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$alancing accounts

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%esolving room status discrepancies

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&onitoring credit limitations

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'roducing operational reports

TH& '$(& $" TH& NIGHT AUDIT$'  

 The auditor should should e aware aware of the nature nature of cash cash transactions transactions a)ecting the front oce. oce. 

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 The role of night auditor re(uires attention to accounting detail, procedural controls, and guest credit restrictions.

 The auditor tracks room revenues, revenues, occupancy percentages, percentages, and other front oce statist statistics ics and prepar prepares es a summary summary of cash, cash, che(ues che(ues and credit credit card card activit activities. ies.  These data data re*ect re*ect the hotel’s hotel’s !nancial performance performance for the day.  The night auditor auditor summarises summarises the results results of operations operations for reporting reporting to management. management.

%o, the functions of a night auditor will include) +. stalishin stalishing g the end of day. day. 2. nsures accuracy accuracy of - accounting records records and alances them /. %econciles %econciles all !nancial transactions etween hotel and guests.

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0alculates the total revenue generated during the day. #eri!es and validates the cashier’s posting of charges in guest folios. *osts roo charges in the guest folios. Transfers unpaid guest accounts to city ledger. &onitors the house limits of guests. 'repares a high balance re!ort  of guest accounts nearing or crossing their house limit. +6 &onitors current status of discounts, meal coupons promotional activities that . and other are carried out at -. ++ Tracks important operating statistics of the hotel . for the day7 room occupancy 8, 9%%, %ev'9%, :ield, etc. +2 . 'repares reports for management analysis and action and future planning.

#$++$N NIGHT AUDIT T&'+%) &%TA(I%HING TH& &ND $" DA   The night auditor generally works on the night shift from 2/66 hrs to 6366 hrs, compiling and alancing the transactions of the day. 9n end of day is an aritrary stopping point for the usiness day so that the audit can e considered complete through that time. This time is usually the hours at which the least numer of  transactions would occur and which fre(uently occurs in the night shift.  The period from the point of time that the audit egins until the audit is complete may e called audit wor. tie. Transactions a)ecting front oce accounts received during the audit work time are not posted until the audit is complete and are considered to e part of the ne;t usiness day.

#'$%% '&"&'&N#ING  Transactional documentation identi!es the nature and aount of  a transaction and is the asis for data input to an accounting system. -or each transaction, the original revenue centre records and it’s monetary value.  The front oce sta) posts an entry to the appropriate folio ased on the documentation to all guest folios is ty!ically done at the end of day0 Direct posting of these to the electronic room folios in a computerised system is one of the greatest advantages of a '&S. 9fter such posting, a % oo 'ate and Ta> 'e!ort may e made for the management. 3. *re!are re!orts" The auditor is responsile for preparation of reports indicating the status of front oce activities. 

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De!artent detail and suary re!orts are produced and !led with the source documents for the accounting division.

 The daily re!ort of o!erations  summarises the day’s usiness and provides insight into revenues, receivales, operating statistics and cash transactions related to the front oce. ="orat6

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 The Cigh alance 'e!ort identi!es guests who are approaching an account credit limit.

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+anagers re!ort, also called an &arly ird 'e!ort because it is the 7rst thing the G+ gets to see on his table before the orning eetingE6 is a listing of occupancy statistics from the previous day, such as occupancy percentageF yield percentage, average daily rate, and numer of  guests. Such data is necessary for monitoring the operation of a usiness. ="orat6 

De!artental Daily %ales 'e!orts that indicate, in one report, the total sales of every department and in many hotels, will also contain details of accounts receivales, ank deposits, cashiers report and room statistics, and so on. ="orat6

. De!osit cash" Since account and departmental alancing often involves cash transactions, cash depositing may depend on a successful audit. 

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?f front oce cash receipts have not yet een deposited, the auditor compares the postings of cash payments and paid outs with actual cash in hand.

 The cash, credit card vouchers, and charges received during the usiness day from cash, charges, and accounts receivale transactions must e deposited in the hotel’s ank accounts or transferred to hotel’s internal accounts receivale.  The credit card totals are added here ecause, in some circumstances, the credit card voucher is considered cash at the time of deposit.  The night auditor will provide a summary of the components of the ank deposit.

 The cash and various credit card totals that have een deposited must match the total cash sales !lus the cash received and a!!lied to outstanding accounts receivable inus total !aid outs0 

 The total cash and credit card payments received, which are reported on the cashier’s report, will match the total ank deposit !gure.

5. ac. u! the syste" This step applies only to computerised front oce systems. Since such a system does away with the need for a room rack, reservation cards, etc., it ecomes very dependent on the proper functioning of  the computer systems. 

$ack up reports must e run in a timely manner to enale smooth operation in the event of a systems failure. 

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nd of day reports are developed and printed y the computer which include guest lists, room status report, guest ledger report7 showing the ending account alances of all registered guests, activity report7 containing e;pected arrival and departure information for the ne;t several days.

0omputer output should also e recorded onto disks.  A system back up is made after each audit and stored in a safe place for reference.

+6. Distribute re!orts" The night auditor must take care to deliver a!!ro!riate re!orts in a  eaningful forat and a tiely anner. ?f all of  the reports are completed accurately and delivered in a timely manner, more informed operational decisions could e made.

AUT$+AT&D %%T&+% U*DAT&- co!uterised ode) 

System updates are run daily.

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Since computer systems perform continuous audits on transactional postings as they occur, there may e little need for the night auditor to actually post account entries. 9 front oce accounting system may interface with the 'S devices for automatic postings from call accounting systems, in7room movies and ars, and the like.

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ven a skipper room comes to light faster resulting in its resale without further loss of revenue. 9udit alancing is maintained continuously.

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%oom status discrepancies are unusual in a fully automated system, since the room rack is eliminated, and registration and check out functions are internally connected to room status functions.

 The housekeeping’s room status report is rapidly updated and this is automatically reconciled with the room status at reception. This results in a Discre!ancy 'e!ort that can e printed for further action. 

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?n the case of guaranteed reservations no7shows, postings may e programmed to *ow automatically to a illing !le.

9s a charge purchase is entered at the 'S, it is instantaneously posted to a guest folio and a departmental control folio. 9 control folio  is an accounting document used internally to support all account postings y departments.

 To alance the departments, the computer tests all control folios against the non7control folio entries. 9n imalance is Aust as likely to identify a prolem in automatic posting techni(ues as a shortcoming in accounting procedures.

&nd- of-day re!orts are developed and printed y the computer which includes guest lists, room status report, guest ledger report7 showing the ending account alances of all registered guests, activity report7 containing e;pected arrival and departure information for the ne;t several days. 0omputer output should also e recorded onto disks.

9 syste bac. u! is made after each audit and stored in a safe place. 

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Daily ack7up H copying of all information on disks, magnetic tape and storing them. Systems ack7up H eliminating account and other transaction information which is no longer of value, e.g. e;pired guest folios at least / days old are deleted from active storage !les and are archived or stored as tapes, etc.

0omputer systems can e programmed to produce a variety of reports of  various length and content. 'eservation con7rations, 'evenue #entre %uaries, &>!ected Arrival and De!arture (ists, "olios for guests e>!ected to de!art, a Daily 'e!ort of  $!erations, 'oo %tatus 'e!orts, and invoices f or non7guest accounts are common products of an automated system.

TH& NIGHT AUDIT *'$#&DU'& IN #$+*UT&'I%&D A##$UNTING %%T&+%- autoated ode) ?n such a system there is not only less labour involved, but also less chances for errors7 the transcription types, and also ecause the computer locks certain types of errors, like posting charges to a vacant room, etc. Cowever, some veri!cation is still re(uiredF for e;ample, cashiers can post a charge to another occupied room y mistake. 9 computerised auditing system can e customised to the need of the hotel and

can follow the general pattern elow"

*rint a D-sheet from the computer7 for departmental details of   charge !urchases = not paid y cash> of the day. ;erify cashiers work. 2. /. ?nstruct the computer to !ost roo charges and ta>es  to each guest folio. 4. 'erform one or more of the following steps" +.

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#erify that !urchases and advances   have een posted to the correct room

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#erify that the house.ee!ers re!orts and room reports were properly reconciled to each other and to the computerised room rack.

#erify transfers fro one folio to another0 ?t is easy for charges to IdisappearJ on a computer system as a result of such transfers. 

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#erify that all credit card vouchers  are on hand and reconciled to the day’s credit card sales.

 The night auditor might then instruct the computer to perform all the chores involved with closing out the current day and to egin a new day with the ne;t day’s date.

 The comple;ity of the computerised system re(uires etter7trained personnel to input the data correctly and also to interpret it correctly. The printouts of reports can e dicult to interpret, leading to oversights and errors due to IhiddenJ information or ImissingJ information.