Auditing is nothing but conducting financial inspection of the organization. The front office is where a hotel’s financial management process begins. The front office initiates the accurate posting of transactions on the guest folios, which is then passed to the back office accounting department. Daily counterchecks of the guest accounts are performed during auditing.
The night after the auditing process for the day is typically completed is how the term “Night Audit” came to be used. It can be done using the traditional method of using paperwork, vouchers, files, and receipts. However, conducting an audit using modern PMS systems is simple, quick, and effective.
What is Night Auditor at Hotel – Salary, Job Description, Duties, Night Audit Process (Tutorial 33)
Why are night audits important?
A daily summary of the cash flow at the front desk is provided to hotel managers by night audits, which can give them information about the occupancy and financial performance of their properties. The following are some advantages of performing a night audit each day for hotels:
What is a night audit in hotel management?
A night audit is a review of all the financial transactions made at the front desk in a single day in the hotel industry. Understanding the daily cash flow into and out of the hotel is made easier for hotel managers by this accounting procedure. In many hotels, a night auditor, who is typically a senior front desk employee or manager, is in charge of the night audit process. Because most visitors have already checked out for the day, the night auditor typically completes this process in the late evening or early morning hours, hence the name “night audit.”
The night auditor wraps up their daily review by looking over the front desk’s financial records and adding up all of the cash and credit payments that visitors have made. They write summaries of the day’s financial activities and send them to other front desk supervisors, general supervisors, and accountants. When conducting this review, the night auditor may also be responsible for the following duties:
Types of night audits
A night auditor may create a variety of reports based on the previous day’s financial activities, depending on the size of the hotel. Some common types of night audits are:
Night audit report
This report provides details about hotel visitors, including the number of occupied rooms and overall sales. The days’ check-ins, check-outs, no-shows, and cancellations are all mentioned. This report includes information about any reservations made through travel agencies, businesses, or websites. The night audit report also contains information on the hotel’s additional earnings, such as sales of food and beverages. The review of the hotel occupancy rate and daily revenue by general managers is aided by this report. The night auditor frequently provides departmental managers with copies of this report to aid in their planning for the following day, such as restaurant managers.
To assist hotel managers, including general managers, in reviewing the total revenue for the hotel, the night auditor creates a report just for them. The hotel’s number of guests, the number of rooms that are available and occupied, and the amount of money that guests have paid are typically included in the manager’s report. Daily sales reports from each department are also compiled by the front desk in many hotels, and the night auditor may include them in the managers report. This report enables managers to assess the success of sales or marketing plans by comparing the targeted revenue with actual sales.
Room rate report
The room rate report gives more information about the hotels’ daytime lodgings. This report compares the rates for each hotel room to the rack rate, which is the regular cost of a hotel room without any discounts. Additionally, it provides details about the various classifications of each hotel room, such as those that are occupied, no-shows, under maintenance, and anticipated check-outs. The hotel managers and reservations department typically receive this report from the night auditor to help them decide whether to adjust room rates.
Typically, the type of night audit report gives more specific information regarding the hotel revenue that day. It provides details on the room rate, taxes, and additional guest expenses like meals to describe the total revenue generated per room in the hotel. This data aids managers in calculating the daily average room rate, a key performance indicator (KPI) for many hotels. Information about the cash and credit card transactions at the front desk is also included in the revenue report. Managers can use this information to comprehend the hotels’ daily net income.
How to perform a night audit
The actions you can take to carry out a hotel night audit are listed below:
1. Verify reservations
Start the night audit by going over each reservation made during the day. Keep a record of all guest arrivals, departures, and any no-shows. See if there are any hotel rooms that are not available for booking because they are undergoing maintenance. Keep track of any reservation-related differences you find so you can reconcile them in your audit, such as differences in the number of guests staying in a room or their length of stay.
2. Adjust room status
After reviewing the daily reservations, you can change the hotel’s room status, which displays the number of available and occupied rooms. Review the occupancy and housekeeping reports to resolve any discrepancies you found with the reservations. For instance, you could verify any no-shows and change the hotel occupancy rate appropriately. Using this information, you can include specifics about the occupied rooms for the following business day in the night audit report. Housekeepers in particular may find this information useful in order to properly clean and prepare rooms.
3. Record room rates
You can proceed with recording room charges and taxes on registered guests billing receipts, known as folios, after changing the room status. Examine the guest folios to confirm that the room rate corresponds to the reservation rate and to address any discrepancies. As an illustration, a visitor might have reserved a room at the published rate and shown a corporate discount when checking in. Check to see if the front desk manager for the day left any details about irregularities, like visitors who decide to extend their stays. Make any necessary modifications and add the room and tax charges to the guests’ folios.
4. Balance other charges
Balance any additional guest charges and add those purchases to their folios in addition to the room rates. Depending on the hotel, additional fees could apply for a variety of things like parking, laundry, or room service. Post each of those transactions to guest folios. When guests check out at the end of their stays, front desk staff can use this information to collect those payments, which hotels refer to as a trial balance.
5. Prepare reports
Prepare the required reports for general managers and other hotel staff after completing these steps. It’s beneficial to create a number of report templates that you can update daily with fresh data. A property management system (PMS), which is software that can automate these reports, may be present in some hotels. Distribute the reports to hotel managers and other stakeholders for review after you’ve completed them, including the food and beverage and reservations departments. In order to speed up check-out procedures at the front desk, you can also complete guest folios for any guests checking out the following day during this phase.
What do you mean by night audit?
By definition, the night audit is a daily comparison of revenue transactions with guest account transactions recorded at the front desk. This accounting procedure ensures that the hotel’s various departments operate in unison. It also ensures reliability and thoroughness of front office accounting.
What does a night audit person do?
A night auditor’s duties include reconciling accounts in great detail, making sure all revenue and expenses were reported, and preparing reports for the following day’s work. Before reporting room rates on opening night, they’ll double-check their accuracy.
What does night audit do at a hotel?
Even though business slows down in the evenings, hotels are a 24/7 operation, so what is a night auditor? Night auditors work overnight at hotels to review and reconcile transactions to ensure that everything has been accurately recorded during the day and accounting records are properly balanced.
Is night audit hard?
Stressful and yet relaxed. However, working for a hotel can be relaxing because you get to meet interesting people. They and sometimes the other workers can make it stressful. Finding where others have made mistakes is the hardest part of the night audit’s job. It can give you a headache.