The Importance of Night Auditing In TheFront Office Operations

INTRODUCTION Front Office: The Front Office Department comprise of the Reception, Guest ServiceOffices, Bell Services, Reservation, Operators, Executive Club, Health andRecreation Center and Business Center. The purpose of the Front OfficeDepartment is to provide guests assistance with luggage, transportation,information concerning the hotel and the city, and any other servicearrangements needed during their stay.Employees of the Front Office Department often provide the first and lastimpression of the hotel to our guests. It is therefore vitally important thatemployees display a prompt and courteous attitude to all guests anddemonstrate the excellence in service.The Front Office Manager who comes under the direct supervision of theDirector of Rooms and supervises the Front Office Department. Important of Front Office Department to the Hotel Hospitality, warm welcome Often provide first and last impression. Often have longest contact with guest. Continuity: Long term service, recognition of repeat guests, remember names, guest histories Acquaint guest with hotel. Sell hotel food and beverage outlets. Up sell: Suggest deluxe and suites. Smoother over disgruntled guests What is Night Audit? The hotels financial management starts in the front office. Thisresponsibility is shared with the controllers office; it begins with theaccurate and timely processing of guest accounts. This can be a time-consuming process for the night auditor; it provides a balance of debit andcredit entries to guest and departmental accounts, which includes incomeand expense-generating areas of the hotels, like restaurants, banquets. Night auditor is also known as the in house auditor who is

responsible for conducting audit and generating reports for management. In a five star hotel,night audit is very complicated and it requires basic accounting, computer and hotel management knowledge and background Night Audit (NA) is basically composed of following important jobs likesettling credit cards for the day with bank to ensure money transfer from theguest's account to the hotel account. After that, charging Room Tax from allthe guests automatically to make sure that all staying guests are beencharged to their agreed rates against the room rent. Arranging reports for management to reflect that day's business activities like revenue earned andexpenses done. Night Auditor also ensures that all phone calls and guests coming to frontdesk for different matters are properly addressed and taken care of properly.In short its one of the most responsible position in hotel managementconsidering its responsibilities. The night audit in the hotel, motel and bed and breakfast industry is a veryimportant part of the smooth running of a hotel or motel. In fact, next to the provision of excellentcustomer relationsthis is the most important aspect of the business side of the hotel, motel and bed and breakfast industry. Taxes isthe reason for this, the night audit is the determining factor for the amount of taxes owed by the hospitality facility ontax dayeach year. Under the heading Taxpayer Record of the facility are listed the Registrationcard, Room revenue balance sheet, Daily control report, Housekeeper'sreport, City ledger, Monthly Summary, Tax report room revenue sheet, and if the hotel is residential hotel then a Residential record sheet is also needed.The daily and monthly report and the room sale, daily and monthlyaccounting sheet must each balance with the daily and monthly tax sheet. Night audit follow the prescribe designed routines: to update the client folio, Perform account closing for the day, Prepare and distribute daily bill to the client. Prepare and distribute a range of report. One of such report to managementis perpetual inventory of account receivable, that tell, how many receivablewhere owed at the beginning of the day, how many were paid and how manywere charges during the day and at the last the closing balance of the day.At the end of the year all of the summaries must balance with the annual taxsheet and this is the amount of taxes owed to IRS for the hotel, motel or bread and breakfast facility. If, there is also a restaurant or other salesdepartments within the main facility this also must be recorded and reports prepared daily, monthly and annually. Importance Of Night Audit in a Hotel: The Night Audit is the control process whereby the financial activity of guests accounts is maintain and balanced. The process tracks charges and payments and the departmental receipts and charges on a daily basis. Thisworking definition encompasses not only the mechanical proofing of totalsof charges and payments but the further review of account activity bymanagement. The front office manager monitors the credit activity of guests, projects daily cash flow from room sales, and monitors projected and actualsales for the various department.Learning the process of the night audit can provide valuable information for someone who plans to continue in the hotel industry. It also gives thenecessary objective overview to evaluate the hotels financial activity. As thenight audit allows a review of all the financial activity that takes places in ahotel in

one day. Based on that reviews the general manager must determinehow the night audit should be adapted to meet the expenses and profit goalsfor the accounting period. The night audit provides insight into how eachdepartment must be monitored to produce an acceptable income statement. It pulls together the plans and operations of a hotel on a daily basis, not just atthe end of an accounting period. Ultimately, the night audit allows generalmanagers to make good financial decisions based on current and cumulativedata. Why I Selected This Topic: The night auditor has many responsibilities in addition to preparing the nightaudit report. This person also must check in and check out guests who arriveor depart after 11:00 P.M., process reservations, perform the duties of security guard, monitor fire safety system, act as cashier for banquetfunctions, and perform the work of manager on duty. The night auditor actsas a communication link between the guest and hotel operations during the11:00 P.M. to 7:00 A.M. shift.The night audit is not one of those reports that is put on the shelf andforgotten. Management uses it to verify the integrity of the guest accountsand to review operational effectiveness, which is the ability of a manager tocontrol costs and meet profit goals. There are five basic steps involved in preparing a night audit: Posting room and tax charges Reconciling departmental financial activities Reconciling the accounts receivable Running the trial balance Preparing the night audit report.Learning the mechanical or hand method of doing the night audit, however,will assist the front office manager in understanding the intricacies of following a paper trail of guest and departmental transaction. The modernmethod of performing the night audit on a PMS will be used, but one shouldalso be familiar with the components up close and personal. Posting Room and Tax Charges: After the night auditor has reviewed any messages from other frontofce staff, reviewed guests who checked out of the hotel, extendedany guest stays, reviewed all room rates, and printed a variancereport, his or her rst task is to post room and tax charges to allaccounts. The PMS can easily post room and tax charges to theelectronic folios, with the room and tax options. Assembling GuestCharges and Payments The various modules in a PMS (food and beverage, call accounting, gift shop, etc.) allow for ease inassembling guest charges and payments. The following is a typicallist of point-of-sale departments for which income will be reported: Restaurant 1 (breakfast) Restaurant 2 (lunch)