Tariq Ahmad Mir Ihm Rajbagh

Srinagar190008(mirtariq1980@red
iffmail.com) 10/14/2014
 It is the process of verifying and providing the
accuracy and completeness of guest and non
 guest account with departmental activity reports.
 the control process whereby the financial activity

 of guests’ accounts are maintained and balanced.

 The night audit will provide the necessary

“objective overview” to evaluate the hotel’s
 financial activity.
◦ Ability to monitor hotel revenues
◦ Effect of marketing plans on related goals
◦ Provides “day-to-day” monitoring, not just end of period
review
 Night auditor is actually the audit process of
taking inventory of days work .in other words
it is the activity of checking and confirming
that whatever transaction have been done
 during the day are correct and complete.
 Any mistake made during the day of
transaction posting and the guest accounts
such as rooms ,food and beverage ,
phones and others are corrected and
account balanced.
 Since the hotel is round the clock business so the
auditing is done during the night and hence called night
 auditing.
 In hotels operating manually or mechanically the best
suited time for the process is midnight as the activities
are minimum during this time .
 In hotels operating on computer i.e. fully automatic
system , the audit and postings can be done without
disturbing the night auditing process and hence the
 work of auditing can be done at any time.
 This work in an automatic system mainly creating
and distribution reports, called as Early Birds or flash
information about previous day.
  Audit is concerned with
1. Verification of postings .
2. Balancing of accounts.
3. Resolving room status discrepancies.
4. Monitoring credit limitations.
5. Producing operational reports.
 It is mainly to inform the management about the
total amount of revenue generated on a day, and
how much the hotel is owed by the guests both
in house and checked out , and producing
 operational and management reports.
 The flash report helps accounting department to
compile a more extensive daily report for posting
 the general ledger.
 Night audit process increases the probability
of correct account settlement and avoids
disputes with the checking out guests.
 Night auditing verifies entries to non guest
accounts also ,monitors guest credit limit ,
balances all front office accounts and
sorts out any room status discrepancies.
 The basic function of night auditor is the
responsibility of overall operations of the
 hotel as per policy and procedures laid down.
 Also the closing and balancing of the
front office and accounts recoverable.
 Duties of the night auditor.
◦ Checking in late check-ins
◦ Checking out early check outs
◦ Processing reservations
◦ Performing the duties of security guard
◦ Monitoring fire safety systems
◦ Performing cashier duties for banquet functions
◦ Acting as manager on duty
- credit control
 Occupancy reports and percentage
 percentage.
 Summary of cash , check ,credit card.


 Reports to the management.


 Posting all pending entries

 Verifying correctness of entries.



 Balancing and totaling of all accounts .



 Monitors guest credit limit.

 Verify no shows.
 THERE ARE THREE OPERATING MODES
OF AUDIT PROCEDURES
1. NON AUTOMATED
 It means that the front office accounts are
audited manually by the night auditor to find
 out the discrepancies.
 In this system four audit forms (I)Daily and
Supplementary transcripts (II)guest and non
guest folio (III) front office cash sheet (Iv)audit
recapitulation voucher produced by hotels
revenue centre are sent to front desk.
 The auditor manually checks all guest
 and non guest accounts .
 It involves a lot of time and is practically
not possible to physically check each and
 every voucher .
 The night auditor checks at random
some vouchers but he checks all totals
both horizontally and vertically.
 2. semi – automated .
 Electro mechanical posting machines and
their improvement such as fully electronic
posting machines are used for front
 office accounts posting.
 These machines are only capable of
producing a limited number of
 departmental totals.
 They don’t interface with POS systems
and don’t retain folio balances.
 Though some new electronic systems
 are capable.
 In this semi automated system, simultaneous
to the postings of accounts folio , the
voucher used to indicate the posting is
imprinted with the same information posted
to accounts folio, and also same information
is printed to a paper tape to save as a
permanent journal records, and also as a part
of hotels internal audit trial.
 Amount of each posted charge charge
is added to the running departmental
 for department originating the posting.
 Departmental totals are helpful in end

 of work shift end of day reporting.

 Forms produced in semi
automated systems are;
 Front office cash report
 Night auditor summary report (D card )
This card shows the opening balance of
the system , provides a running record of
all charges and credit postings through
the machine and shows a final balance.
 It is a simple , quick and very accurate system in which
automatic posting to the guest and non guest folios can
 be done.
 It is very fast and various audit functions can be
 performed .
 It can be interfaced with POS equipment , telephone
switches , and call accounting systems for automatic
posting from these devices directly to guest and non
 guest folios .
 Monitoring account balances and verifying posting
is done simply by comparing guest and non guest
ledger audit data to front office daily report for
balancing.
 This system offers immediate reach to
information , and hence management
can more effectively manage operation.
 The night audit process
 The night audit process is a series of financial checks and
balances that need to be performed on the various
 departments and front office staff.
 The process to post room and tax charges.
The process of assembling guest charges and
payments Reconciling departmental financial
activities.
 The importance of this process as a necessity
to insure that all posted guest charges and
reported departmental balance.
 The origin of departmental balances.
 Procedure
 to reconcile account receivable.
 City Ledger is an accounts receivable - a collection of
guest accounts of persons who are not registered with
 the hotel
  Contents of accounts receivable:
 direct billings
  master credit card accounts (Visa, MasterCard, JCB)
 Verification of these totals against departmental totals
  Run trial balance
 The first step in determining if posted guest charges and
 reported departmental charges balance
 Importance of training front desk clerks in the posting
 process
 Preparation of the night audit report
 The goal of preparing the night audit is to provide
financial feedback for an immediate opportunity for
managers to react and respond to variances as well as
 accurate guest folios and accurate city ledger folios.
  Importance of departmental totals
 Concept of bank deposit
 Concept of accounts receivable
  Cashier’s report – lists cashier activity of cash and
 credit cards and PMS totals
 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.
Operating Statistics–these figures provide a quick
summary of the activities of the day and the
succession meeting financial budget targets.
Management will be able to take quick action to
catch unprofitable trends.
 Rooms Available – these are the number of rooms in
the hotel which were operable for sale; if a room was
out of order because of redecorating, plumbing, etc.,
then it is not to be included in this figure; sometimes
students think if a room was occupied by a stay-over,
it was not available for sale.
 Rooms sold, rooms Vacant, and Rooms Out-Of-Order
– these numbers are cross referenced by assessing the
housekeepers module .
 Rooms Comp – this figure is reflected in the guest
registration card and folios.
 Occupancy Percentage– this figure is determined by
dividing the number of rooms sold by the number of
rooms available and then multiplying that figure by
100.

  Double occupancy percentage – this figure is
determined by dividing the number of guest minus the
number of rooms sold by the number of rooms sold,
 then multiplying that figure by 100.
 Yield Percentage – this figure is determined by
multiplying the number of rooms sold by ADR and
dividing that figure by the number of rooms available
 times the rack rate and multiplying that figure by 100.
 RevPAR – this figure is determined by multiplying the
 times occupancy percentage by the average daily rate.
 Room Income – this figure is obtained from the
total room rate postings.
  Number of Guests – this figure corresponds to the
 registration module.
 Average Daily Rate – this figure is computed by
dividing the room income by the number of rooms
 sold.
 No-shows – this figure is complied by tallying the
number of reservations with a confirmed status that
did not show; guaranteed reservations are not included
in this figure.