Chapter 5 III' The Night Audit

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Chapter 5III. The Night Audit
2
Night Audit

• A daily comparison of
• Guest and Non-guest Accounts with
• Revenue Center Transactions

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Functions Of The Night Audit

• 1. Verify posted account entries
• 2. Balance all front office accounts
• 3. Resolve room status discrepancies
• 4. Monitor guest credit restrictions
• 5. Produce reports

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Night Audit

• The night audit focuses on two areas
• 1. The discovery and correction of front office
  accounting Errors
• 2. The creation of accounting and management
  Reports

5
Night Audit

• Audit Work Time
• Time from beginning to end of night audit.
• End of Day is when the audit begins.
• Transactions received during this time are held
  and posted once the audit is completed.
• Audit Trail
• Flow of source documents which details each step
  in the processing of a transaction.
• Use cash register tapes as a cross-reference.

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Night Audit

• Bucket Check
• Cross check folios with housekeeping report and
  room rack.
• Make sure all occupied rooms are charged.
• Audit is complete when
• Totals for all guest non-guest and departmental
  accounts are in balance.
• If it is out of balance you have to find it!!

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Night Audit Process

• 1. Complete Outstanding Postings
• First step in the night audit process
• Post all transactions before End of Day
• 2. Reconcile Room Status Discrepancies
• Perform a Bucket Check
• Errors can lead to lost revenue
• Not a problem in fully-automated hotels

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Night Audit Process

• 3. Balance All Departments
• Trial Balance - Balance front office accounts
  with departmental transactions.
• 4. Verify Room Rates No-Shows
• Room Revenue Count Report
• Compares rack rate to actual rate
• No-shows
• Check Duplicates and Misspellings

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Night Audit Process

• 5. Post Room Tax
• Semi-automated system
• Post room tax separately for every room
• 6. Prepare Distribute Reports
• Distribution of reports is the final step in the
  night audit process.
• 7. Clear or Back-Up the System
• Clear Semi-automated system
• Back-Up Fully-automated system

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Night Audit Reports

• Department Detail Summary Report
• Verifies that all transactions were properly
  posted
• High Balance Report
• Identifies guest and non-guest accounts that are
  approaching the hotels credit limit.
• Daily Operations Report
• The most important outcome of the night audit.
• Summarizes the days business and provides hotel
  operating statistics.

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U.S. Lodging Statistics

• City Rooms Occ ADR
• Las Vegas 120294 88.1 67.03
• Orlando 94281 78.3 85.97
• LA/LB 80706 70.5 88.99
• Atlanta 75318 67.2 78.74
• Chicago 73424 70.9 107.16

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Common Errors Corrected During The Night Audit

• Balance Pickup Errors
• Incorrectly enter the folios previous balance
• Does not happen with fully automated systems
• Transposition Errors
• Transaction numbers are reversed
• Post 25 instead of 52
• Subtract numbers and divide by 9
• 52 - 25 27
• 27/ 9 3 (Whole number)