Call it the end of day process, or front office night audit process, hotel night audit is a significant part of a hotel’s accounting section. This process captures, reviews and collates all financial activities of the hotel that has taken place in one day and posts them on appropriate account heads.
What is night audit in a hotel?
In a hotel’s 24/7 business environment, guests check-in and checkout at all hours and pay their bills either through cash or cards. At the end of the business day, hotels need to properly record and reconcile guest folios and their transactions. Purpose of the night audit process is to do the same by collating revenue against various revenue heads. To be precise, hotel night audit evaluates and closes daily cash flow into and out of the hotel’s account. Also referred to as the end-of-day process, it ensures the rollover from one business day to the next day.
Here are some of the major functions of night audit
- Ensures rollover from one business day to the next day
- Reconciles all front office cash counters/accounts
- Verifies posted entries to guest/non-guest accounts
- Resolves room status and rate discrepancies
- Most importantly, generates several MIS reports called night audit reports
How to do night audit in a hotel?
Night audit is a mandatory process for hotels of all sizes, categories and services. The most convenient time to perform night audit is between the late evening and early morning – just after the business day closes. This is the time when most revenue centers and POS outlets at a hotel are closed, making it the ideal time to perform night audit. This helps the front office personnel, also called night auditor to initiate and finish the night audit process with minimal interruption.
For the night auditor, some of the steps in the night audit process are –
Total outstanding charge posting
Hotel night auditor needs to ensure that all guest transaction happened in a day are correctly captured, charged and posted to guest accounts.
Reconcile room status
The night auditor must evaluate and analyze a particular day’s occupancy report and the housekeeping room status report to find out the correct occupancy status of a hotel.
Verify room rates
It is mandatory to compare guest registration records with room reports to ensure rack rate and actual rates are the same.
Verify no-shows of the day
By verifying no-shows of the day in the front office console, the night auditor ensures that the no-show bills are duly charged, and the rooms are marked as ‘available’ for future dates.
Balance all departmental accounts
This process of balancing all revenue center accounts is called ‘Trial Balance’ that helps in accurately posting the day’s room and tax charges.
The night audit process can be done manually – by pen and paper, or by using a hotel property management system (Hotel PMS). While doing the same by pen and paper is a time-consuming and tedious process that leads to multiple errors, a Hotel PMS efficiently automates the whole process. Take Hotelogix cloud-based Hotel PMS for example that helps you with an efficient night audit so that you can establish 100% accuracy of the process while cutting down heavily on manual intervention that may lead to errors.
Hotel night audit procedure with Hotelogix cloud Hotel PMS
Hotelogix PMS users can perform night audit with just a few clicks. This works in 2 ways –
- Click on the drop-down button ‘Frontdesk’ on the top left corner and then click on ‘Perform Night Audit’. The system will finish the process in no time.
- If you have missed the night audit for the last business day, the Hotel PMS will prompt you to do so with a pop-up box. You just need to click on ‘Perform Night Audit’ and the system will do it for you.
Moreover, with Hotelogix PMS in place, you can also automate the whole process. You can run auto night audit without even logging into your Hotelogix account. In this, Hotelogix PMS will do the automatic check-in and no-shows to the reservations, based on the setup in the Admin Console.
Now let’s look at some of the important reports, known as Night Audit Reports
The Hotelogix PMS helps generate several insightful reports on hotel business via the night audit process. Known as Night Audit Reports, these insights help you review your hotel’s operational effectiveness so that you can keep costs under control while making profit.
Night audit room details report
This report captures the total number of rooms and their total guests under each category such as occupied rooms, available rooms, day use rooms, etc. for the day. It helps you to understand a particular day’s occupied rooms, available rooms, check-ins, checkouts, no-shows, cancellations, complimentary rooms, day use rooms, etc.
To access this report: Go to Report Console >> Night Audit Reports >> Night Audit Room Details
Night audit counter report
This report captures the revenue details of each counter for the day. This also shows each counter with details of revenue received and withdrawal by the counter for the selected day. By selecting the ‘View Counter Details’ checkbox, you can track all the changes occurred in each counter before night audit.
To access this report: Go to Report Console >> Night Audit Reports >> Night Audit Counter Report
Night audit revenue report
This report captures income generated from Rooms and all other POS outlets for the day. The report also shows room inclusion details (if available) along with the source of revenue collected. It also shows booking revenue amount generated via walk-ins, corporates, travel agents, website, etc.
To access this report: Go to Report Console >> Night Audit Reports >> Night Audit Revenue Report
Night audit tax report
This report captures shows the total amount of tax collected from room taxes and POS taxes for the day.
To access this report: Go to Report Console >>Night Audit Reports >> Night Audit Tax Report
MTD & YTD reportt
These two important hotel reports for management show the month-wise and year-wise data for a selected day, for which night audit has been performed. They help you understand the percentage of rooms occupied, the percentage of rooms occupied minus complementary and house use, average daily rate and total revenue of your hotel including POS, other charges, etc.
To access this report: Go to Report Console >> Night Audit Reports >> MTD & YTD Report
Rooms on book report
This report helps you with a snapshot of room revenue, room nights and ARR for a specific search date. Plus, it also provides you with information on rooms per day (RPD) and occupancy percentage for the past 10 days and its forecast for the next 30 days.
To view this report, go to Report Console >> Night Audit Reports >> Rooms On Book Report
Hotel trial balance report
As one of the most important hotel management system reports, it offers you insights into your hotel’s financial status for a specific date. This includes all transactions posted, and then a breakdown of business within each of 3 ledgers – guest, accounts receivable and deposits.
You can generate this report by following this step – go to Report Console >> Night Audit Reports >> Hotel Trial Balance Report
When performed with a smart Hotel PMS like Hotelogix, night audit process offers a massive amount of feedback on your hotel’s operational and financial aspects. You should consider leveraging a cloud-based hotel property management system to perform daily night audit at your hotel to reduce your workload while ensuring accuracy of the whole process that is critical to your daily operations.