Role of Night Auditor
Importance of Night Audit
• Night audit - the control process whereby the financial
Preparation and Review of activity of guests’ accounts are maintained and
balanced.
Night Audit • The night audit will provide the necessary “objective
Module 7 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
The Night Audit Process The Night Audit Process
• The night audit process is a series of financial 3. Reconciling departmental financial activities.
checks and balances that need to be performed • The importance of this process as a necessity to insure
on the various departments and front office that all posted guest charges and reported departmental
balance.
staff.
The origin of departmental balances:
1. The process to post room and tax charges.  Departmental Totals.
2. The process of assembling guest charges  Cashier’s Report
and payments.
The Night Audit Process The Night Audit Process
4. Run trial balance 6. Preparation of the night audit report
• The first step in determining if posted guest The goal of preparing the night audit is to provide
charges and reported departmental charges are financial feedback for an immediate opportunity
balanced for managers to react and respond to variances as
• Importance of training the front desk clerks in well as accurate guest folios and accurate city
the posting process ledger folios.
• Duties of the night auditor.
1. Checking in late check-ins
2. Checking out early check outs
3. Processing reservations
4. Performing the duties of security guard
5. Monitoring fire safety systems
6. Performing cashier duties for banquet functions
7. Acting as manager on duty
The Night Audit Process
4. Procedure to reconcile accounts 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
The Night Audit Process
6. Preparation of the night audit report cont’d…
Reports that are included and their significance:
• Importance of departmental totals
Each department in the hotel is required to provide a daily
sales report to the front office. These figures are listed and
compared to the budget goal. General managers of hotels
use these figures to determine the profitability of income-
generating departments and the success of marketing
programs
 The Night Audit Process
6. Preparation of the night audit report cont’d…
Reports that are included and their significance:
• Concept of bank deposit
Bank deposits are also part of the night audit. In
large hotels, bank deposits are made several times
a day to satisfy security concerns. The bank
deposit includes both cash and credit card
deposits.
Components of the Night Audit Report
Components as well as origination of figures found in
Night Audit Report
• Columns titled actual, budget, and goal %.
• Room and tax – this figure originates as a total of
posted daily guest room charges; it is a
cumulative total from the PMS room total
feature.
Components of the Night Audit Report
• Room service – the origin of this figure is a total of sales
by meal period for room service.
• The dollar figure can be verified against the daily
sales reports with accompanying cash register tapes
or point-of-sale audit trail tapes from the room
service food facility outlet.
• This figure is reported separately from restaurant
sales to reflect marketing and merchandising
campaigns.
The Night Audit Process
6. Preparation of the night audit report cont’d…
Reports that are included and their significance:
• Concept of accounts receivable
The accounts receivable is an ongoing listing of
outstanding amounts owed to the hotel. These potential
sources of revenue are essential to positive cash flow.
Managing and updating these accounts by reviewing
them daily is a primary responsibility of the controller
and general manager
Components of the Night Audit Report
• Total restaurant sales and sales tax – the origin of
this total is by meal period in the various food
outlets in the hotel.
- The dollar figure can be verified against the daily
sales reports with accompanying cash register
tapes or point-of-sale audit trail tapes from each
of the food outlets.
- The corresponding tax total is obtained by the
sales tax figure on the daily sales reports
Components of the Night Audit Report
• Banquet sales – the origin of this figure is a total of guest
checks that tally the individual banquet charges per meal
category.
- The completeness of the total reported can be checked against daily
function sheet.
- The dollar figure can be verified against the daily sales report of the
banquet department.
- This figure is used to evaluate the effectiveness of the food and
beverage manager in controlling relate expenses.
- It is also used to evaluate the effectiveness of the director of marketing
and sales in generating business. Finally it is used to indicate cash flow.
The Night Audit Process
6. Preparation of the night audit report cont’d…
• 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.
Components of the Night Audit Report
• Tips for restaurant, room service, banquet, and
lounge employees – the origin of this figure is
service fees paid to food and beverage
employees.
The dollar figure can be verified against paid out
slips (tips paid immediately to service employees
from the desk clerk’s cash drawer) and room
service guest checks and credit card vouchers
(charged tips).
Components of the Night Audit Report
• Banquet Bar and Total Lounge Sales – the origin of this
figure is from the point-of-sale cash registers in these
areas.
- The dollar figure can be verified against the daily sales
report and cash register tapes or audit trail tapes.
- This figure is used to determine how well cost control
efforts have been maintained in this department.
- It is also used to determine the success of certain
marketing and merchandising campaigns.
Components of the Night Audit Report
• Room Rental – this figure originates from meeting and
function room rentals.
- The night auditor can verify the completeness of total
rentals by cross-referencing the function sheet listings.
- The dollar figure is verified against the room rental
departmental daily report.
- This figure is used to determine if room rentals have
been maximized during slow banquet sales by the
marketing and sales department.
Components of the Night Audit Report
• Gift Shop Sales and Tax – the origin of this figure
represents sales and tax from this department.
- The dollar figure can be verified from the gift shop
daily sales report and cash register tapes or point-of-
sale audit tapes.
- Management uses this information to examine
profitability of this area and to predict cash flow.
Components of the Night Audit Report
• Parking – the origin of this figure comes from sales
received in cash, business checks, debit cards, credit
cards, and transfers for guest parking.
- The dollar figure can be verified from departmental
parking garage daily report and transfer slips posted to
guest folios, parking tickets, cash register tapes, and
monthly parking permit renewals that accompany the
daily report.
Components of the Night Audit Report
• Valet – this figure must be closely monitored
because the hotel pays cash to the off-premises
dry cleaner of laundry service when clothing is
returned.
- This total represents costs plus mark-up posted
to guest folios from transfers.
- The dollar figure can be verified against the valet
or dry cleaning/laundry journal.
Components of the Night Audit Report
• Vending – the origin of this figure is from sales from
various vending machines in the hotel.
- The dollar figure can be verified from the
departmental vending daily report.
- Management compares inventory usage with cash
collected to monitor the integrity of cash collection and
reporting activities.
Components of the Night Audit Report
• Total Revenue and Total Write-offs – these figures
represent all the cash and charge transactions for the
day that reflect all the previously reported figures.
- Management will compare the actual and budgeted
figures to determine how well operations have met
financial goals.
Components of the Night Audit Report
• Telephone Charges – the origin of this figure is from
telephone charges reported for local and long distance
telephone calls that have been posted to the guest
account through the PMS interface with the call
accounting system.
- The dollar figure can be verified against the telephone
charges printout received through the call accounting
system.
- This figure allows management to determine the
profitability of this service.
Components of the Night Audit Report
• Spa – the origin of this figure is sales posted to guest
folios and cash sales in that department.
- The dollar figure can be verified from the
departmental spa daily report and vouchers posted to
the guest folios.
- Management needs this information to examine
profitability of this area, to predict cash flow, and to
determine the effectiveness of marketing and
merchandising campaigns.
Components of the Night Audit Report
• Cash Sales and Accounts Receivable Balance
 Explain the Total Cash Sales figure.
 Explain the Today’s Outstd A/R figure.
 Explain the Total Revenue figure.
 Explain the Yesterday’s Outstd A/R figure
 Explain TOTAL OUTSTD A/R
 Explain CREDIT CARD REC’D A/R figure
 Explain Cash Rec’d A/R
 Explain Bal A/R
Components of the Night Audit Report
• Credit Cards and Cash Applied to Accounts Receivable –
these figures represent payments that have been
received for application toward outstanding accounts
receivable (credit card companies, direct billing
accounts, and city ledger accounts).
- Management monitors this figure to determine cash
flow.
Components of the Night Audit Report
• Cashier’s Report – This figure provides a cumulative
total of the cash, credit card vouchers, and checks from
credit card companies (from outstanding accounts
receivable).
- This is the amount of cash the desk clerk or cashier is
responsible to produce in the deposit.
- It provides differences between actual and machine
total.
End of discussions for Module 9….. Thank
you for your attention
Components of the Night Audit Report
• Bank Deposit and Amount Transferred to Accounts Receivable –
• Analysis of Accounts Receivable – These figures are
maintained to determine the source of the account
receivable.
- Various sources will allow the controller to monitor
cash flow.
- The controller will be able to determine the effects of
various discount rates on the profit and loss statement.
- The controller will also use this information to age
accounts
Operating Statistics
• 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
 Rooms sold, rooms Vacant, and Rooms Out-Of-Order – these
numbers are cross referenced by assessing the housekeepers
module
 Rooms Comp (Complimentary Rooms)
 Occupancy Percentage
Components of the Night Audit Report
The total bank deposit figure represents cash, Visa, MasterCard,
and JCB.
- The analysis of bank deposit provides sources of bank deposit
(cash sales, credit cards and cash from accounts receivable).
- The total bank deposit figure must match the total cash sales plus
the cash received and applied to outstanding accounts receivable
(cash received on accounts receivable minus total paid-outs).
- The total of actual cash and credit card payments received (from
the cashier’s report) will match the total bank deposit figure.
- The amount transferred to accounts figure will match today’s
outstanding accounts receivable (today’s outstanding accounts
receivable).
Operating Statistics
 Double occupancy percentage
 Yield Percentage
 RevPAR
 Room Income